Don't Swallow The Doughnut Hole

[ProSense]

Don't Swallow The Doughnut Hole

Jeff Cruz
September 15, 2006

Jeff Cruz is a senior policy analyst for Medicare and Social Security at Campaign for America’s Future.

If there ever was a symbol of the GOP culture of corruption, of their K-Street-Project way of doing business, of favoring special interests over the American people and of their blind adherence to a failed ideology that unconditionally favors shrinking government over public service, then that symbol might just be a doughnut hole.

While the examples of the GOP culture of corruption are numerous—energy bill handouts to oil companies enjoying record profits while consumers are gouged at the pump or increasing the cost of college student loans for the profit of Sallie Mae—the creation of an unnecessary gap in coverage of the Medicare Part D prescription drug benefit offers a crystal clear indictment of the failure of conservatism and its resultant culture of corruption. Seniors on Part D are only covered for their first $2,000 or so in drug costs. After that, drug coverage in Part D stops completely and they are forced to pay monthly premiums while getting no coverage at all, until spending nearly $3,000—completely out of pocket—when coverage resumes.

The gap, which has become known as “the doughnut hole,” demonstrates how a party that doesn’t believe in government cannot govern effectively.

The inefficient design of Part D resulted from the GOP modus operandi. The only reason the doughnut hole exists is because Part D was designed more for insurance and pharmaceutical companies than for enrollees. If the government was allowed to negotiate with big pharmaceutical companies for lower drug prices, there would be more than enough savings to eliminate the doughnut hole.

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Paying prices set by the drug companies results in 61 percent of the federal Medicare drug expenditures remaining with drug makers as added profits. And seniors are left in the hole, which forces many to choose between buying their needed prescription drugs and having food on the table. Remember, the average annual income for American seniors is only around $17,000. One study has found that, when faced with such a gap in coverage, seniors cut back on the prescription drugs, their health deteriorates and they end up costing more money in increased hospital visits. Tragically, fatality rates increased 22 percent for seniors with a gap in prescription drug coverage.

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http://www.tompaine.com/articles/2006/09/15/dont_swallow_the_doughnut_hole.php