Rebate aims to diminish Medicare 'doughnut hole'
by Michael Schroeder
The "doughnut hole" has snuck up on many a Medicare beneficiary since the prescription drug plan was added in 2006, but this year it was a $250 rebate check from the federal government that took Fran Campbell by surprise.
"I do take a lot of medicine, so I was halfway expecting it but I didn't know when," says Campbell, 73, of Boynton Beach, Fla., who got the check in July.
When Campbell is in the coverage gap known as the "doughnut hole," she says she spends more than $300 a month out of pocket for anti-seizure medications to control epilepsy. Under Medicare Part D, beneficiaries pay 25 percent of the first $2,830 in annual drug expenses but then must shoulder the next $3,610 completely on their own. The new health care law will change this.
"The goal with the Affordable Care Act is to close the doughnut hole by 2020," says Peter Ashkenaz, a spokesman for the Centers for Medicare and Medicaid Services.
The rebate checks, which are being sent to an estimated 4 million people who are expected to fall into the coverage gap this year, are the first step. Next year, Medicare beneficiaries will be able to get prescription drugs at half off when they're in the doughnut hole. And the coverage gap will continue to shrink each year thereafter.
"Certainly every bit helps," Campbell says.
She was happy to get the check, but others, like Franklin D. Nash, a retired physician in Indianapolis, say it's a drop in the bucket.
"It will make very little dent in my out-of-pocket costs for the year," says Nash, who has diabetes and, like Campbell, hit the gap in the first half of the year. He hadn't yet received his rebate when he spoke to Angie's List in August.
Last year alone, Nash spent $2,325 for insulin medications and other drugs — more than nine times the amount of the rebate. He calls the cost a burden but says others have it much worse.
"There are many people who do not have the income I have, who can't pay for insulin when they're in the gap. What do they do?" he says.
Derek Blau, a pharmacist at highly rated Hy-Vee, an in-store pharmacy in Overland Park, Kan., says in the most severe cases people are making choices between buying food and pills. While he believes rebate checks are a step in the right direction, he doesn't expect it'll have a major impact on whether people buy drugs.
But Nick Delgandio, pharmacy manager at highly rated Partell Specialty Pharmacy in Las Vegas, says $250 could go a long way for some people covered by Medicare: "They may be able to get four or five months [supply of a] medication on that rebate."
And when the coverage gap closes for good?
"I think it'll potentially save some people's lives," Delgandio says.