According to the Chicago Tribune’s Sunday edition (page 27, Section 1), the Doughnut Hole is a coverage gap in the Medicare Part D drug plan that forced enrollees to pay 100% of the cost of their prescription drugs after they used up a certain annual amount but before their costs reached the catastrophic coverage limit. Here is a link to their online story – How Health Care Bill Affects You. [Sunday paper version spelled it Doughnut. Online version spells it Donut. American Heritage College Dictionary says it can go both ways.]
For instance, according to the Tribune, under this year’s Medicare Part D a senior pays 25% of the drug costs and the Plan pays the balance, up to a total annual expenditure of $2,830. After that amount has been reached for the year, the senior pays 100% for their prescriptions (after a rebate of $250) until a total annual expenditure of $4,550 has been reached. After that amount has been reached, the Plan pays 95% of the costs and the senior pays the balance.
Under the plan just passed in the U.S. Congress and starting in 2011, discounts are built in on brand-name and generic drug costs within the gap range. These discounts rise through 2020, at which time the gap disappears.
As of 2020, under the new plan, the senior is responsible for 25% of drug costs up to the catastrophic limit of $4,550, and 5% of drug costs over that limit.
This seems to be a decent solution. What do you think?