Seniors saved $40M in doughnut hole, administration says

Seniors have saved nearly $40 million in brand-name drug costs through a Medicare provision of the healthcare reform law, the Obama administration announced Tuesday morning.

About 48,000 Medicare enrollees saved a combined $38 million on brand-name drugs thanks to a new 50 percent discount on meds that fall in the so-called doughnut hole, the Department of Health and Human Services said. Further, about 4 million seniors who fell in the Medicare drug coverage gap last year received a one-time check of $250.

The doughnut hole has been one of the most controversial elements of Medicare prescription coverage since it launched in 2006. In 2010, beneficiaries paid 25 percent of their drugs costs until they reached $2,830. Seniors were then responsible for the next $3,610 worth of drugs, and the government picked up 95 percent of the tab for anything over $6,440.

Seniors in 2011 started receiving a 50 percent discount on drugs that fell into the doughnut hole, and the discount will be ratcheted up to 75 percent within 10 years.

The announcement comes on a day when the administration plans to highlight healthcare reform’s benefits for seniors. HHS Secretary Kathleen Sebelius and Administration on Aging chief Kathy Greenlee are meeting with seniors in Pittsburgh and Missouri, respectively.

“For too long, many seniors and people with disabilities have struggled to choose between paying for needed prescription medication and other necessities, like food, rent and utilities,” Sebelius said in a statement. “The Affordable Care Act is delivering more affordable prescription drugs to seniors and giving everyone on Medicare better benefits.”