The doughnut hole—besides being a tasty treat—is what many people call the gap in Medicare Part D prescription drug coverage. Seniors who reach this gap must pay for the entire cost of their prescriptions out of pocket. Some retirees who can't afford their medicines actually stop treatment as a result, according to a recent study.
The standard Part D benefit has a $275 deductible and 25 percent coinsurance up to $2,510 in total drug costs in 2008. Then comes the doughnut hole where enrollees pay all of the next $3,216 in prescription costs. After that, catastrophic coverage kicks in, and beneficiaries pay 5 percent of any additional medicine costs.
About 26 percent of Part D enrollees who filled prescriptions in 2007 but did not receive low-income subsidies reached the coverage gap, according to research conducted by Georgetown University, the National Opinion Research Center at the University of Chicago, and the Kaiser Family Foundation. Most (22 percent) remained in the gap for the rest of the year and saw their average out-of-pocket costs nearly double, from $104 to $196 monthly. Kaiser estimates that 3.4 million beneficiaries reached the coverage gap and faced the full cost of their prescriptions in 2007.
Only 4 percent of part D enrollees who filled prescriptions ultimately received catastrophic coverage. Most of these seniors paid the full cost of their medications for an average of just over four months and received catastrophic coverage for less than one month.
Senior Part D enrollees treating chronic conditions like Alzheimer's (64 percent), diabetes (51 percent), and depression (45 percent) were most likely to face the full cost of their prescriptions in 2007. Once they reached the gap, 15 percent of enrollees stopped their drug therapy for that condition, 5 percent switched to another medication in the class, and 1 percent reduced the number of drugs they were taking in the class.
Among Part D enrollees taking medications for specific conditions who reached the gap:
- 10 percent stopped taking oral antidiabetic drugs
- 18 percent gave up osteoporosis medications
- 20 percent discontinued the use of proton pump inhibitors