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Administration Touts Medicare 'Doughnut Hole' Savings

By Dena Bunis, CQ HealthBeat Managing Editor

March 19, 2012 -- In their continuing effort to highlight the most popular aspects of the health law, Health and Human Services officials Monday said more than 5.1 million Medicare beneficiaries have been helped by the measure’s effort to close the so-called Part D prescription drug “doughnut hole.”

A Centers for Medicare and Medicaid (CMS) analysis of 2010 and 2011 data shows that the initial $250 rebate check and the 2011 brand-name drug discount have helped seniors who need medicine to treat chronic illnesses as well as those beneficiaries who fell into the coverage gap in one year only because of an episodic illness. This data shows, said CMS Deputy Director Joe Blum, that the Part D benefit of the health law “serves as an important safety-net program who may fall into doughnut hole one year but not the next.”

Federal officials pointed out that the second anniversary of the health overhaul law (PL 111-148, PL 111-152) is approaching and they are expected to bring out more ways that the measure has been successful. The challenge to the constitutionality of the measure will be the subject of three days of oral arguments next week before the Supreme Court.

CMS reports that the 5.1 million people who benefitted from the doughnut hole provisions thus far saved more than $3.2 billion. In 2011, Blum said, those who fell into the coverage gap saved an average of $610 in prescription drug costs. Also in that year the most common drug classes that beneficiaries needed were medicines for blood sugar, cholesterol, and to treat asthma and other lung conditions.

CMS also released data Monday showing that through the first two months of 2012, about 103,000 seniors and people with disabilities saved $93 million that otherwise would have fallen into the doughnut hole.

A fundamental strategy of the health law is to promote wellness and prevent illness. When Medicare beneficiaries adhere to their drug regiment, Blum said, that help “reduce hospitalization and other high health care costs. There is growing evidence that it works to keep beneficiaries healthier and avoid costly hospital stays,’’ he added, noting that one of the barriers to get seniors to take their medicine faithfully is high out-of-pocket costs.

Dena Bunis can be reached at [email protected].  

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