FixHealthCarePolicy

Side Effects: Donut Hole Hold-Up

Last Thursday, the White House trumpeted Obamacare’s first step in closing the Medicare “donut hole.” Checks in the amount of $250 were sent to 80,000 seniors in the “hole”—a gap in Medicare’s coverage of prescription drug benefits for seniors. Ultimately, Washington will cut 4 million of these checks, totaling $1 billion, to help paper over the coverage gap.

The gap was no accident, mind you. Congress crafted it deliberately in 2003. It enabled them to claim, with the Congressional Budget Office’s blessing, that the new entitlement to drug coverage under Medicare would cost no more than $400 billion over 10 years.

Under the “donut hole” provision, drug benefits run out for some seniors, who must then pick up the total cost of their prescriptions. However, once they pay $3,610 out of pocket, the coverage kicks back in again.

The $250 rebate checks are intended to offset a portion of those out-of-pocket expenses.

But Politico reports that, “No sooner than the Administration dropped the first batch of $250 Medicare rebate checks in the mail, they have already run into their first snafu.” (more…)

Tags: "donut hole", coverage gap, Medicare drug coverage, rebate checks, Vermont, VPharm

There’s No Such Thing as a Free Donut

President Obama, joined by HHS Secretary Kathleen Sibelius, is holding a televised Town Hall Meeting today on the benefits of his big health care law with senior citizens in Wheaton, Maryland. The President’s public relations offensive will be coordinated with unions and a bevy of liberal interest groups, ranging from the AARP to the National Gay and Lesbian Task Force. The President’s appearance is specifically designed to put the national spotlight on a “ milestone” provision of the unpopular national health law: A $250 rebate to help senior citizens pay for prescription drugs if they should find themselves in the so-called “donut hole”. The “donut hole” refers to the gap in prescription drug coverage where seniors, after reaching a certain spending limit, are required to pick up 100 percent of the drug costs, until they reach a catastrophic threshold and then regain full coverage.

Curiously, the “Donut Hole” that the new rebate is starting to “fill up” is the federal government’s creation in the first place. There was nothing quite like it in “nature.” Instead, it was designed by Congress in 2003 to shave the cost of the newly created universal Medicare drug entitlement, and thus help the Congressional Budget Office numbers come out right. Sound familiar? (more…)

Tags: "donut hole", $250 rebate check, access problems, Medicare Advantage cuts, ObamaCare, prescription drug benefit

Side Effects: Obamacare’s “Donut Hole” for Young Adults

College seniors are eagerly ordering caps and gowns for May graduation ceremonies. But graduation day often brings loss as well as gain. Many graduates will lose coverage under their parents’ health plans as soon as they get their diplomas.

It wasn’t supposed to be that way. Obamacare promised to let “children” remain on their parents’ health plan until the age of 26. It was one of the few provisions in the law to attract bipartisan support. Yet the hastily drafted legislation managed to botch even this seemingly simple reform.

Young adults constitute “one of the biggest groups of the uninsured,” according to the Fiscal Times. The paper cites a Commonwealth Fund survey of 2,002 young adults that found that nearly half (45 percent) of those aged 19 – 29 lacked coverage for at least part of 2009. (more…)

Tags: "child coverage", "donut hole", Commonwealth Fund, Fiscal Times, ObamaCare, parents' health plan, pre-existing conditions, Side Effects, young adults