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Medicare Drug Program News
New York Times Examines Medicare Drug Benefit's
Doughnut Hole Coverage Gap
Some see a positive in the doughnut hole because it
steers senior citizens to lower-cost generic drugs
Nov. 26, 2007 - The New York Times on Saturday
published two articles examining the so-called "doughnut hole" coverage
gap of the Medicare prescription drug benefit. In 2008, the coverage gap
will take effect when beneficiaries' total drug costs reach $2,510.
Beneficiaries then will be responsible for paying 100% of drug costs
until total costs reach $5,726, when catastrophic coverage kicks in.
Summaries of the articles appear below.
● Gap coverage: Medicare beneficiaries
can purchase drug plans that include doughnut hole coverage, but in some
cases, the higher premiums for such plans might not be worth the cost to
seniors, according to the
Times.
Twenty-nine percent of Medicare drug plans now
offer coverage during the doughnut hole, compared with 15% of plans in
2006, according to
data
from the
Kaiser Family
Foundation.
Such plans typically cost about twice as much as
the $28 average premium for plans without doughnut hole coverage, and
most provide coverage only for generic drugs.
According to the Times,
the least-expensive approach "in the short run" for beneficiaries who
are able to "rely solely on generic drugs" might be to forgo enrolling
in a Medicare drug plan altogether and instead purchase drugs at
discount stores -- such as Wal-Mart, Costco and Target -- that offer
generic drugs for as little as $4 per prescription (Saul, New York
Times, 11/24).
● Generic drugs: Some experts "see a positive
public policy trend" in the doughnut hole because it is helping to steer
beneficiaries toward lower-cost generic drugs to avoid paying more than
$3,000 in out-of-pocket costs, the
Times
reports.
In addition, according to Tim Anderson, a physician and
pharmaceuticals analyst for
Sanford C.
Bernstein, because lower-cost generics generally work as well
as brand-name drugs, more beneficiaries are incorporating them into
their permanent drug regimens.
A
Wolters Kluwer
study found that 4.2 million beneficiaries reached the doughnut hole
last year, and many of them switched to generic drugs to keep
out-of-pocket costs low.
According to Medicare data, an estimated 59.6%
of Medicare drug benefit prescriptions in 2006 were filled with generic
drugs, and by the first quarter of 2007, 61.5% of Part D prescriptions
were filled with generic drugs. Acting
CMS
Administrator Kerry Weems said the drug benefit has made consumers more
price-conscious overall by allowing them to use the Medicare Web site to
compare costs of treatments (Saul, New York Times, 11/24).
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