Political Animal


November 29, 2011 9:25 AM ACA shrinks ‘doughnut hole’ for seniors

By Steve Benen

Most of the Affordable Care Act won’t take effect for a few years — and if court rulings and the 2012 elections go a certain way, it may not take effect at all — but there’s already evidence that the reform law is having a positive effect.

Access to coverage for young adults between 19 and 25, for example, is quickly improving, and the law is also having a positive impact on slowing the growth in Medicare spending — a priority Republicans pretend to care about — as hospitals transition to a greater focus on value and efficiency, required under the ACA.

And this week, we’re learning that seniors are now better able to afford their prescription medications. (thanks to reader N.G. for the tip)

Medicare’s prescription coverage gap is getting noticeably smaller and easier to manage this year for millions of older and disabled people with high drug costs.

The “doughnut hole,” an anxiety-inducing catch in an otherwise popular benefit, will shrink about 40 percent for those unlucky enough to land in it, according to new Medicare figures provided in response to a request from The Associated Press.

The average beneficiary who falls into the coverage gap would have spent $1,504 this year on prescriptions. But thanks to discounts and other provisions in President Barack Obama’s health care overhaul law, that cost fell to $901, according to Medicare’s Office of the Actuary, which handles economic estimates.

A 50 percent discount that the law secured from pharmaceutical companies on brand name drugs yielded an average savings of $581. Medicare also picked up more of the cost of generic drugs, saving an additional $22.

This isn’t just some fluke — the reduced costs for seniors are deliberate consequence of the Affordable Care Act. It’s one of the reasons the AARP supported the law so enthusiastically.

It’s worth noting, of course, that if Republicans repeal the law, seniors will go back to paying more for their medicine, among the many other drastic punishments American families will face. Whether older voters will be aware of this, and whether they might base their votes accordingly, remains unclear.

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.


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  • c u n d gulag on November 29, 2011 9:35 AM:

    Since most of the audience for FOX News and Reich-wing talk radio is somewhere between 49 and Methuselah, my guess it that they'll be told that Obama's increasing the costs, and sharpening up his Death Panels knives, and vote against their own best interests. Again...

    And I'm waiting for them to release "Tea Party II - Motorized Medicare Scooters at Protests, Boogaloo!"

    I think early summer we'll see the Koch Brothers turfing their 'asstro's' for all they're worth.
    Well, not ALL they're worth, but ALL they're willing to spend - which will still be a lot!

  • Ron Byers on November 29, 2011 10:32 AM:

    Facts don't matter. Just remember all Americans hear is death panels and America is broke. Reality is of no importance to the media.

    By the way I have a 23 year old who has health insurance because she is included on my policy. Yep I pay a litte for her every month, but that is better than her going bare.

  • iyoumeweus on November 29, 2011 10:35 AM:

    A. Raise the Medicare entitlement fee to 2% of total income including wages, salaries, bonuses, interest, dividends, capital gains and other forms of income. Those paying more than $2,000.00 will receive a tax deduction.
    B. Allow Federal government to negotiate with PHARMA industry to lower drug prices.
    C. Allow VA Hospitals to care for low income non-veterans.
    D. Carry out the Medicare/Medicaid cost reductions mandated by the Affordable health Care Act so that the growth can be slowed. Putting these provisions into action fully and as soon as possible is the best way to reign in spending.
    E. Allow Medicare to bundle payments for several standard procedures nationwide phase in over the next four years payments for all procedures and primary care completely replacing ‘fee-for-service’.
    F. Implement competitive bidding for durable medical equipment, prosthetics, orthotics, laboratory tests, pharmaceutical and other medical supplies.
    G. Require electronic eligibility, claims processing and payment as well as centralized physician credentialing.
    H. Do not pay extra for technologies that are more expensive but no more effective than other available technologies.
    I. Allow all citizens a under the age of 60 a choice between a Medicare Public Option or private health insurance. All over 60 would receive Medicare.

  • Jerry Wechsler on November 29, 2011 12:11 PM:

    Rein in = restrain
    Reign in = Rule the domain of

  • bloomingpol on November 29, 2011 12:44 PM:

    I want to note that my former (and soon to be current, again) congresswoman, the wonderful Carol Shea Porter, was the driving force behind getting a closing of the donut hole into the ACA. I will be forever grateful, my husband has some chronic conditions that require medications, some of them brand name, and we have saved a considerable sum this year, our first year on Medicare, because of what Carol did for us. Thank you, Carol, and I will work hard to get you back where you belong, representing NH in DC. You can help Carol get re-elected by contributing to her campaign - http://www.sheaporter.com/

  • pea on November 29, 2011 5:29 PM:

    My dear-departed mom fell into the doughnut hole once a couple years ago at age 99 and her meds went from about $100 to nearly $800 a month! Fortunately my mom had me to help pay for this & figure out what to do. What happens to the elderly who don't have family to help? Her doctor wanted to make some changes, so I asked the dr and the pharmacy what the costs of these new meds would be. They COULD NOT TELL ME!!! I would have to take time out of my work day to call her Medicare Advantage plan and be on hold, disconnected, etc etc for hours to find out. Something's very wrong when no one but the insurance company can even estimate what a medicine will cost so you can make an informed decision about what to do. The cost differential can be enormous. TOTALLY CRAZY-CATCH 22 SYSTEM. And by the way, does the govt pay Pharma the difference when the patient pays only $30 instead of $300 before the donut hole -- or does Pharma just earn less? (hard to believe) More power to the ACA!!!

  • exlibra on November 29, 2011 6:28 PM:

    Yup. My pill-popping, 87yr-old husband just noticed the difference, about a week ago. Around this time of year, he'd start rationing some of the meds, so as to have more money for X-mas gifts. Drove me nuts, because all of us would much rather have him than gifts. This year though, I'm hearing much less of the "but it's so expensive", when I remind him to take this or that pill.

  • Swift Loris on November 29, 2011 7:56 PM:

    The average figures cited for the doughnut hole change are reflected almost exactly in my medication costs. My doughnut-hole Rx this year (my only one, thank goodness) cost $900-something rather than the $1,500-something it's cost previously.

  • Doug on November 29, 2011 8:45 PM:

    I'd suggest WE spread this bit of news, because I doubt it'll be given much attention by the MSM...

  • Larry N. Totton on December 01, 2011 12:22 PM:

    Sorry, I don't agree that the reduction in cost to Seniors, like me, can be attributed to the New Health Care program. The shrinking of the "doughnut hole" has no effect on those of us who have a number of perscriptions but do not buy enough to fit into that category. The real evaluation should be made as to WHO even came up with the doughnut hole concept in the first place as it only put an undue burden on those that can least afford it. The public medical programs do not even have something as stupid as that.

    Lets say that instead of applauding a direction that is doing the Seniors so much good, lets tell it like it is in that it is nothing more than damage control for "thinking out of control" that now is being made right!