By Jane Norman, CQ HealthBeat Associate Editor
May 27, 2010 -- Checks for $250 each will be distributed beginning June 1 to seniors who have fallen into the "doughnut hole" when it comes to their prescription drug plans, Health and Human Services Secretary Kathleen Sebelius said Thursday.
Sebelius said in a briefing with reporters on implementation of the new health care law that about 80,000 seniors initially will see the checks in their mailboxes. Some 4 million seniors should qualify by the end of the year, HHS officials said. They don't have to sign up or apply because their drug billing activity will be automatically monitored by Medicare.
The money will got to those with Medicare Part D prescription drug plans who exhaust their regular drug benefits and have to pay all of their drug costs until they qualify for catastrophic care.
Eventually the doughnut hole will be eliminated under the law, but the $250 checks are a first step.
Sebelius' comments came as administration officials continue to stress the portions of the law that are going into effect right away, or even earlier than planned.
She said that a new brochure on closing the doughnut hole has been sent out to Medicare recipients. A similar brochure sent to Medicare enrollees earlier this week stirred a storm of protest from Republicans who said it contained "propaganda" about the new law and information irrelevant to seniors.
Sebelius also said she met Thursday with several insurance company CEOs to discuss plans for putting in place a "patient's bill of rights" for consumers when dealing with insurance companies.
She said she reminded the CEOs that the law gives HHS new tools to monitor premium increases — although not block them — including review of rate hikes.
"As we proceed, we'll continue to look for opportunities to work with insurance companies but also keep a close watch to make sure they treat their customers fairly," she said.
She did acknowledge that the insurers told her that rates are now at a "crisis point," with people dropping coverage due to rising premiums. The new law, which is supposed to extend access to insurance for all Americans, does not go fully into effect until 2014, and it does not have a mechanism to directly curb premium increases.
"I think the insurers seem very aware of the fact that cost control, all of us working together on it, is something that's going to be very important in these intervening years," Sebelius said. The government also is interested in strategies on cost control implemented by the private firms, she said.
"We're going to be looking very carefully at what's happening in those marketplaces going forward," she said. "The worst of all worlds is to have more Americans driven out of the market in the next couple of years and end up with an actually sicker population, if you will . . . when we hit 2014."