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May 2006

IN AND OUT THE MEDICARE PART D DONUT HOLE & DONUT HOLES TO COME
by E.M. Prentiss



I fell into the dreaded Donut Hole on February 3rd, when my pharmacyís computer printed out a receipt with a $61 co-payment instead of $28. The next day, my insurance provider said something was wrong and I should call back in four days. When I did, they still didnít know why Iíd been charged $61. I asked, "Could I be in the donut hole?" "Oh no, itís too early," was the response. After checking another computer she said, "Oh yes, you are. Have a nice day."

You donít know youíre in the Donut Hole because it is based on the planís payments. By mid March when the insurance company sent EOBís (Explanation of Benefits), I was rapidly exiting the Donut Hole for catastrophic coverage. I was out of the Donut Hole on March 27th.

Since you must be 65 to be eligible for EPIC (New York Stateís Elderly Pharmacy Assistance Coverage), I will be facing eleven Donut Holes before I am 65. EPIC participants are protected from paying into the Donut Hole. I was thankful my fatherís estate had finally been settled. I was thankful my fatherís estate had finally been settled so I can pay the Donut Holes. In todayís money we calculated it was over $40,000!

Did the President and Congress really think beneficiaries would have $3,600 or more available to fill the annual Donut Hole and move over to the other side of the Donut for catastrophic coverage? It seems as if there are article daily about seniors, often cancer patients, who had received their medication on Pharmaceutical Assistance Programs but now being forced into Part D and dreading the Donut Hole. In New York State, financially eligible seniors are protected by EPIC, but people who are on Medicare but who are not seniors are not eligible for EPIC.

In 2007, Part Dís costs are all increasing: The initial deductible from $250 to $265; Out of pocket expense from $3,600 to $3,850. Co-payments are increasing: those who qualify for Extra Help (Low Income Subsidy): full benefit from $1/3. $1/3.10 to $2/$5; partial subsidy from $2/$5 to $2.15/$5.35; catastrophic coverage (beyond the Donut Hole) from $2 to $2.15 (generics) and from $5 to $5.35 (brands). These may seem like small and inconsequential increases but they add up, particularly for those who take numerous medications.

So, recalculating, I can look forward to probably over $50,000. But many Medicare beneficiaries do not have the means to pay even one Donut Hole much less eleven. Unfortunately, there are no estates pending as I slog through future Donut Holes to EPIC when I finally reach 65.

The cost to expand EPIC to younger Medicare beneficiaries would be $15 million in the first year. In this yearís proposed $110 billion state budget, the legislature and governor are fighting over a much greater amount for member items. The Manhattan Institute's Empire Center for New York State Policy has calculated that over the past three years member items have cost just over $479 million.

This year, could the Mets and Yankees get only $135 instead of 150 million in member items, so younger Medicare beneficiaries can have EPIC and be protected from the financial ravages of the Donut Hole?