Short Takes On News & Events

Seniors Falling Into Doughnut Hole Buy Fewer Drugs

By Phil Galewitz

September 7th, 2011, 9:03 AM

About 12 percent of people receiving the Medicare prescription drug benefit in 2009 fell into the gap in coverage — the much maligned “doughnut hole” — according to a study released today.

Photo by Edward Kimber via Flicrk

While in the doughnut hole beneficiaries bought fewer drugs, including about 11 percent fewer monthly prescriptions in 2009, compared to when they’re still getting prescriptions subsidized, said the study by the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation). Other studies have shown a similar effect.

Excluding low-income Medicare enrollees who qualify for financial assistance and are not subject to the doughnut hole, there were 19 percent of beneficiaries in the coverage gap in 2009, the study said. That percentage has been shrinking, most likely due to the increase in cheaper generic drugs being offered, the study said.

The doughnut hole in 2009, the latest data in this study, started after the plan and the beneficiary paid a total of $2,700. Then, an individual was responsible for all of their medication costs until he or she had paid $4,350 in out-of-pocket costs.

After they come out of the “hole,”  Medicare picks up about 95 percent of the costs. Less than 3 percent of Medicare drug beneficiaries, excluding low-income beneficiaries, reach that catastrophic-coverage level, the study found.

This year, because of the federal health law, beneficiaries are getting a 50 percent discount off brand name drugs while in the doughnut hole. The benefit is important because few Medicare drug plans provide any gap coverage, and those who do charge much higher rates, according to a separate study released by the Kaiser Foundation.  This year, beneficiaries also get a 7 percent discount off generic drugs.

In 2012, the 50 percent brand discount remains and the generic drug discount doubles from 7 percent to 14 percent.

2 Responses to “Seniors Falling Into Doughnut Hole Buy Fewer Drugs”

  1. Sam Claflin says:

    My husband is new to Medicare and is wrestling with choosing the correct Part D plan. He takes one drug that is extremely expensive at regular retail in the US, over $800 per month. This drug, though not life essential helps to keep a condition in control that leads to life threatening infections. In Canada this drug is available at between $100-$200 per month. WHY?

  2. Harriette Seiler says:

    Under Canada’s Medicare, a single payer system, drugs are purchased in bulk by the government. Our VA system does the same. They can then negotiate the prices. Unfortunately, the US Congress–influenced by pharma lobbyists, has prevented our Medicare from doing that.

    We are being royally ripped off–but many voters think the for-profit US way is the only way. Sadly, seniors (and non-seniors) who must purchase high-cost medication are suffering. The donut-hole is a travesty.

    Let’s improve our Medicare–add pharmacare to it, expand it and give it to everybody. Call your reps in Congress. Tell them you want to see HR676 enacted.
    Read the bill at