The federal health reform law reduced prescription drug costs by $2.1 billion for 3.6 million Medicare beneficiaries in the "doughnut hole" in 2011, the Obama administration announced on Thursday, the Los Angeles Times reports. The savings amounted to about $604 per beneficiary (Levey, Los Angeles Times, 2/2).
Background on Doughnut Hole
Prior to the health reform law, Medicare Part D beneficiaries paid 25% of the cost of their drugs until the total bill reached $2,830. Beneficiaries then paid the full cost of drugs until their total out-of-pocket spending reached $4,550, a gap in coverage known as the "doughnut hole."
The health reform law called for Medicare beneficiaries in 2010 to receive one-time, $250 rebates when they reached the doughnut hole (California Healthline, 8/5/11).
In 2011, the rebate was replaced by a 50% discount on brand-name drugs and a 7% discount for generic drugs. The overhaul will increase that discount gradually until 2020, at which time the coverage gap will be closed.
Overhaul To Result in More Savings for Beneficiaries
The announcement on prescription drug savings came in conjunction with the release of another HHS report, which found that the overhaul will help Medicare beneficiaries between 2011 and 2021 save about $4,200 each.
HHS officials said beneficiaries' spending will be reduced through drug discounts, subsidies, no-cost preventive services, slower growth in Medicare Part B premiums and slower growth in cost sharing for parts A and B (Norman, CQ HealthBeat, 2/2).
Part of the Plan
The announcement is part of a strategy by the Obama administration to spread positive news about the overhaul ahead of the November election, The Hill's "Healthwatch" reports.
The plan aims to increase the overhaul's popularity among voters and cast GOP presidential candidates in a negative light for pledging to repeal it (Pecquet, "Healthwatch," The Hill, 2/2).