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As many as 7 million may be in the Medicare doughnut hole

ASK THIS | August 10, 2006

The hole could be eliminated through savings if the government negotiated lower prices with drug firms. Would Bush go along with that?

By Saul Friedman

Q. Is the president aware that as many as 7 million elderly or disabled Americans are encountering the coverage gap, or "doughnut hole" in the Part D Medicare drug benefit and are having to pay up to $2,850 out of their own pockets for their drugs?

Q. Experts say the doughnut hole could be eliminated by savings to the program if the government is permitted to negotiate lower prices with the drug companies. Does the president favor this?

Q. Will the president support legislation to eliminate or reduce the size of the doughnut hole?

Since early May, when the president last touted Part D, (with wrong information) weeks before the enrollment deadline, the drug benefit has run into considerable problems. As many as 5 million of the 43 million Medicare beneficiaries have not signed up. And while many who have enrolled say they are satisfied, that changes as hey fall into the notorious coverage gap, or doughnut hole.

Briefly, the initial benefit, which includes co-payments, deductibles plus what the insurance pays for the drugs, is $2,250. Once that is reached the beneficiary pays the full price for the next $2,850 (while still paying premiums) until he/she reaches $5,100. After that Medicare pays for "catastrophic coverage," or 95 percent.

But meanwhile as many as seven million Medicare recipients are falling into the hole and crying foul. It has the potential to become the single most important domestic issue in the fall campaign, along with other Part D problems. But as far as I can tell from the transcripts, White House reporters, who are mostly young and may not understand the program, have not raised the issue.


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