Americans United Releases New Report on Part D Doughnut Hole Trap
Pennsylvania Action Releases New Report from Institute for America's Future Showing That Thousands of Senior and Disabled Pennsylvanians Face Dire Health Consequences as They Fall Into the Part D ‘Doughnut Hole' Trap
Pennsylvania Action and Americans United Release IAF's Report As Part of an Ongoing Effort to Convince Senator Santorum to Fix Part D so that it is Simple, Affordable and Guaranteed
July 12, 2006 (PHILADELPHIA, PA) - Pennsylvania Action, affiliate of USAction and the state partner of Americans United, released a new report today prepared by the Institute for America's Future that shows that the costly, confusing and corrupt Bush Part D plan has dire health and financial consequences for the 7 million Americans who will soon fall into the program's ‘doughnut hole' -- a massive gap in coverage for those covered by the program whose annual drug costs are between $2,250 and $5,100. Pennsylvanians who fall into the ‘doughnut hole' are forced to pay the full cost of their prescription drugs on top of their costly monthly premiums. The report -- entitled ‘Falling into the Doughnut Hole: How Congress and the Drug Industry Created a Trap for American Seniors and People with Disabilities' - reveals that September 22nd is the date when the average Medicare-eligible American will fall into the ‘doughnut hole;' it also details how the gap will actually grow over time and the grim realities for the vast majority who can not escape it.
"September 22nd will mark an unsettling milestone for most of the 7 million seniors and disabled Americans will soon fall into the Bush Part D ‘doughnut hole' trap," said Jeff Garis, spokesperson for Pennsylvania Action. "Many Pennsylvanians who managed to navigate this incredibly confusing and corrupt prescription drug program will soon be rewarded with no coverage whatsoever, yet will still be forced to pay their costly monthly premiums. Next year, even more seniors will fall and fall harder into the ‘doughnut hole' as the coverage gap continues to grow. But the most troubling reality for Part D enrollees in Pennsylvania is that few will escape the massive coverage gap, putting them at significant health risk when they simply decide to take their chances without their medicines."
Among the study's key findings of ‘Falling into the Doughnut Hole':
- Seven million Americans will fall into the Part D ‘doughnut hole.' According to the conservative estimates of the Kaiser Family Foundation, it is predicted that out of the 11.8 million Medicare enrollees whose plans include a coverage gap, nearly 7 million of these individuals will fall into the doughnut hole. This doesn't include the 4.2 million who didn't sign up for the benefit because it was so costly and confusing.
- Part D ‘doughnut hole' will actually grow and increase over time. Reaching the catastrophic coverage threshold in 2006 requires $5,100 in total drug spending, but this rises to $5,596 in 2007 and $6,158 in 2008. While the level of spending in the 25% coinsurance range will also increase, it does not increase at the same rapid rate as the catastrophic level increases. As a result, the total size of the doughnut hole will rapidly increase over time and engulf more and more Americans.
- September 22nd marks national ‘Doughnut Hole Day.' The millions of Americans with Part D coverage have different spending patterns and prescription drug needs, but the average Medicare enrollee's total drug spending for 2006 is estimated to be $3,081. Accordingly, this means that an average Medicare beneficiary who enrolled in a stand-alone drug plan on Jan. 1st would be paying $257 dollars a month and would fall into the doughnut hole on Sept. 22nd.
- Part D ‘doughnut hole' has fatal health consequences. 55 percent of Americans who enter the doughnut hole will be unable to escape it. A study in the New England Journal of Medicine examined the effects that capping prescription drug benefits had on seniors in the Medicare +Choice plan in 2003 and found that seniors who reached this cap, which would be very similar to falling into the doughnut hole, were more likely to skip doses of treatments, less likely to visit hospital emergency departments, and, sadly, died sooner. It was discovered that their annual mortality rate was 22% higher than those without such a cap on benefits. Additionally, the increase in frequency and length of hospital visits caused by the deteriorating health actually increased costs overall for the insurance companies.
The full report from Institute for America's Future can be found here: http://home.ourfuture.org/reports/medicare/0607-DoughnutHole.pdf
"Part D was written by and for the big drug and insurance companies: there's no other reason why the ‘doughnut hole' exists for thousands of Pennsylvania seniors and the disabled, and there's no excuse for Senator Santorum to stand by this fatally flawed program any longer," stated Eddie Murray of SEIU 1199P. "Senator Santorum needs to support meaningful legislation to fix Part D so that it is simple, affordable and guaranteed. There's no better way to achieve that than to require Medicare to negotiate lower prices from drug companies, just as the Veterans Administration does for veterans."
Americans United Plan to Fix Part D:
- Reduce the cost of prescription drugs by requiring Medicare to negotiate lower prices from drug companies,
- Close the "doughnut hole" referring to the gap in coverage for annual costs between two thousand two hundred fifty dollars and five thousand one hundred dollars which will result in millions of seniors being denied coverage each year while they still pay monthly premiums
- Allow seniors the choice of obtaining their prescription drug plan directly from Medicare--instead of from a private insurance company.
- Prohibit insurance companies from dropping drugs after a plan starts for people who are prohibited from switching plans.
- Re-open Part D enrollment and waive the late enrollment penalty until Part D is fixed.
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