What happens when beneficiaries in Medicare Part D prescription drug plans reach the coverage gap commonly known as the “donut hole”? According to a new study from the University of Pittsburgh Graduate School of Public Health, 14 percent of them stop taking some of their medications. The Pittsburgh Post-Gazette reports:
Under the plan, beneficiaries have an initial…deductible for prescriptions, then a…co-payment until they reach $2,250 in payments.
After that the coverage gap, or doughnut hole, goes into effect and seniors pay 100 percent of their drug costs until costs reached $5,100, after which about 95 percent of the costs are covered.
The study looked at medication purchase practices of more than 11,000 Part D members and found that about 25 percent of Part D participants hit the doughnut hole coverage gap. About 4 percent progressed to become eligible for the catastrophic coverage.
Typically, those reaching the doughnut hole coverage gap were seniors with chronic conditions such as diabetes or hypertension who filled an average of five prescriptions per month.
Once they hit the doughnut hole, though, their medication use dropped 14 percent, dropping on average nearly one of the five prescriptions.
And what happens when old people don’t take their prescribed drugs? They tend to get sick. “One can assume,” the study concluded, “not only that the lack of coverage in the doughnut hole had adverse health consequences but also that it could have increased costs for hospital and physician services.”
Unsurprisingly, the study authors found that seniors who subscribed to plans with generic drug coverage in the gap–which happen to be considerably more expensive–were much less likely to cut back once they reached it. Accordingly, the study
suggests that a better approach might be adding coverage for generic medication–for about one-fourth the cost of a brand name drug — during the coverage gap. Then, to offset the added expense for the program, a beneficiary’s contribution in the first phase would be slightly increased.
I’ve got an even better approach to suggest. Kick the insurance companies out of the mix, negotiate lower prices with the pharmaceutical companies, and save a boatload of money. Then say goodbye to the donut hole forever.