Critics Say Medicare “Donut Hole” Closure Will Cost Seniors More

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A group of Central Ohio Seniors got good news from their Washington representatives Monday – news about changes in Medicare. But some say those changes will not benefit them in the long run.

Democratic U.S. Senator Sherrod Brown and 15th District U.S. Representative Mary Jo Kilroy visited St. Stephens Community House to talk with seniors about upcoming changes to Medicare. The changes are part of the Health Care Reform bill that President Obama signed earlier this year.

One significant change to Medicare will be the closure of the so-called “donut hole” – a period of time when Medicare insurance stops covering prescription drugs after covered medicines reach a certain cost. At that point, seniors start to pay for drugs out of pocket. Senator Brown told seniors who are in the coverage gap what they soon can expect in their mailboxes.

“You get a $250 check from the Federal Government. You don’t have to ask for the help. As long as you’re in the “donut hole” you get the help,” Brown said.

Next year, Medicare recipients in the “donut hole” will get a 50 percent discount on prescription drugs. The following year there will be a 55 percent discount on medications, and 60 percent after that until the coverage gap is closed in 2020.

Brown recognized a $250 one-time check is a mere drop in the bucket for some Medicare patients who pay thousands of dollars a year for prescription drugs. The senator said legislators wanted to close the gap right away, but it was not fiscally possible.

“The cost of it was too great to keep, to have the health care bill be balanced fiscally so it actually paid for itself. That’s why we didn’t close it immediately, but it does take a big bite next year, the $250 will help this year. Next year it will cut prescription drug costs significantly,” he said. The new law also expands coverage to Medicare patients. Seniors will get a free physical every year and other preventive medicine like colonoscopies will be free or low-cost.

Medicare recipient Annie Birdsong will not benefit from the rebate check because she is not in the Part D “donut hole.” Birdsong is excited about getting free physicals.

“It would help me quite a bit because I don’t get free physicals. I always went through Well Care or somewhere and I had to pay the balance,” Birdsong said.

Congresswoman Kilroy said this kind of coverage expansion will have positive effects on health care costs and the federal deficit.

“And having those checkups, having those diagnostic tests, getting information from your doctors about what you need to do to manage your own health care. That’s also an important thing for our health and for our bottom line,” Kilroy said.

Some argue, though, the new health care bill will increase the national debt and further burden Medicare recipients. Ed Haislmaier is a research fellow with the Center for Health Policy Studies at the Heritage Foundation in Washington D.C. He said few seniors – five to 10 percent – will benefit from closing the Medicare coverage gap. And closing it, Haislmaier said, will increase premiums over time for Part D recipients. And he added offering free and low-cost preventive services will not lower health care costs like some legislators suggest.

“With more screening or testing you find more people who need treatment. You also find a lot of people who are perfectly fine, but you had the expense of testing them anyway. So, in the end, the research that’s been done shows that doing more of this may improve health, may catch some disease earlier for some people, but you can’t really claim that it’s going to lower aggregate health care spending in Medicare as a program,” Haislmaier said. Haislmaier said there are other limitations not addressed in the new health care legislation that effect more seniors than the Part D coverage cap. He said more senior citizens would benefit from caps on hospital and physician co-pays.