Making the “Donut Hole” Smaller

According to a Department of Health and Human Services press release issued this week, nearly 4 million Medicare beneficiaries have received help with their prescription drug costs through the Affordable Care Act (ACA).

In 2010, CMS issued seniors who reached the Part D donut hole a one-time, tax-free $250 rebate check, providing nearly $1 billion in out-of-pocket relief.

Beginning in 2011, biopharmaceutical research companies will provide Medicare Part D beneficiaries that reach the donut hole a 50 percent discount on their brand-name drugs. According to CMS, this will provide a cumulative $2 billion savings for enrollees this year.

In a statement today, Secretary Sebelius, announced that a similar number of Medicare beneficiaries are likely to enter the coverage gap in 2011 and will benefit from these ACA provisions that work to reduce and close the donut hole by 2020.

As I have said many times in this space, HLC has learned through its Medicare Today efforts that Part D has shown us that a public-private partnership can achieve a program that earns high approval among beneficiaries and continues to be a success story.