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More patients fall into a hole in drug benefit USA Today (July 26, 2006)

Copyright USA Today 2006
More patients fall into a hole in drug benefit

Many on Medicare surprised by the costly gap in coverage
By Richard Wolf

WASHINGTON — Seniors and disabled people who have chronic health problems are increasingly entering a gap in Medicare’s prescription-drug coverage and finding that they could have to pay thousands of dollars out of pocket. That’s already creating a political issue for the fall elections.
An estimated 3.4 million people will have drug expenses that push them into the coverage gap, when they must pay the full cost of prescriptions. The gap, which Congress calls the “doughnut hole,” begins when drug expenses total $2,250, including the amount paid by insurance. It continues until a beneficiary has spent $3,600, an amount that will increase in future years.
David Madison, 67, of Lakewood, Colo., was diagnosed with pancreatic cancer in May and fell into the coverage gap this month. One prescription eats up 20% of his $34,000 annual income. “I really don’t know where the money’s going to come from,” he told a Democratic Senate panel last week.
Democrats, aiming to capitalize on the coverage gap, calculate that Medicare beneficiaries with average drug costs will reach it Sept. 22. Their “Doughnut Hole Day” is six weeks before fall elections, when control of Congress is at stake.
“People with diabetes, heart conditions, hypertension and mental disorders may all be hitting the doughnut hole starting now and heading into the election season,” says Lindsey Spindle of Avalere Health, a consulting firm.
The U.S. Chamber of Commerce is betting that despite the gap, the prescription-drug law is a winning political issue. It is running TV and radio ads starting today praising senators and House members, mostly Republicans, who voted for the law in 2003.
After a rough start caused by the chaotic transfer of 5.8 million low-income people from Medicaid to Medicare drug coverage, the program has rebounded. By May 15, the enrollment deadline for most people, more than 38 million people on Medicare had drug coverage through the program, employers or other government insurance.
Now Republicans who heralded the program risk bad publicity in the months before the November elections. Democrats have made proposals to eliminate the gap or alleviate its impact. “Some like to say that under the Medicare prescription plan, the pharmaceutical companies got the doughnut and seniors got the hole,” says Democratic Sen. Byron Dorgan of North Dakota.
A USA TODAY/Gallup Poll in April, however, found voters by 2-to-1 were more likely to back members of Congress who voted for the prescription-drug law. “If that’s what they’re running on, it’s going to fizzle on them,” says Republican Rep. E. Clay Shaw of Florida. Most seniors, he says, “are very satisfied and saving a lot of money.”
Mark McClellan, head of the Centers for Medicare and Medicaid Services, says the program is a big gain for most seniors, who had little or no drug coverage in the past. “The typical beneficiary is not going to have any doughnut hole” because typical drug costs aren’t high enough, he says. Those who do will have received at least $1,500 in government assistance first.
The coverage gap is hardest on people not poor enough to qualify for extra financial help under the program but who still cannot afford $3,600 or more for their drugs.
Drug manufacturers donated 35 million prescriptions worth $5.1 billion last year, but many companies stopped offering free drugs when the Medicare benefit became available. Medicare officials are trying to get those programs going again. In those cases, however, the value of the free drugs doesn’t count toward the $3,600 that beneficiaries must pay before Medicare offers 95% coverage.
The coverage gap was written into the law as a way to hold down costs to taxpayers. Because the prescription-drug program is complicated, many beneficiaries didn’t know about the gap.
A study by PricewaterhouseCoopers estimated that 3.4 million people would reach the gap this year. About 2.4 million people paid higher premiums for plans that offer coverage in the gap.
Many people with expensive medical conditions such as AIDS, cancer and multiple sclerosis have reached the gap already. Others, such as those with diabetes and mental illness, are entering it now or will soon. People who take several medications also are at risk.
Ray Brown, a 51-year-old Milwaukee resident who relies on expensive drugs because of a ruptured disc in his spine, was surprised last week when a Wal-Mart pharmacist said his bill was more than $400. Brown left with only his pain medicine, leaving behind a muscle relaxant and arthritis medication. “That was the only one I could afford,” he says.
The gap is particularly hard on people with costly conditions:

  • Many cancer patients who take expensive drugs such as Gleevec and Tarceva, which cost about $2,500 a month, didn’t understand the doughnut hole when they signed up, says Sarah Barber of the American Cancer Society. “People were overwhelmed with finding a plan that covered the drugs that they needed,” she says.
  • Some people with multiple sclerosis, whose drugs cost $1,300 to $2,000 a month, began reaching the gap in February. Many had received their drugs free from manufacturers and were “very shocked” when drug companies stopped or restricted those programs, says Kim Calder of the National Multiple Sclerosis Society.
  • People with HIV/AIDS, who often take 20 or more drugs a day, began hitting the gap several months ago. Most are struggling with the cost, says Nancy Ordover of Gay Men’s Health Crisis in New York City. Some are interrupting their drug regimens, at great risk, she says. “It’s starting to have a deterrent effect.”