With all the publicity over the Medicare Part D gap you would think that most of us on Medicare were hit with this financial hardship. In fact, only about 6% of those on Medicare are affected by the donut hole and most of those never see the full impact by reaching the 95% point of reimbursement. In addition, according to the 2012 Medicare Trustees Report, “The majority of beneficiaries have not enrolled in the standard benefit design but rather in plans with low or no deductibles, flat co payments for covered drugs, and, in some cases, partial coverage in the coverage gap.”
Those retirees with employer-provided prescription coverage are not so lucky. The Medicare Actuaries assume that as a result of changes made by Obamacare, the percentage of seniors with such coverage will drop from 12.7% in 2011 to just 1.4% in 2021 as employers are forced to drop the coverage and transfer retirees to Part D.
The reason for the low impact of the so-called coverage gap is that lower-income people with both Medicaid and Medicare are not affected by higher out-of-pocket costs (plus in several states there are low-income prescription benefits in addition to Medicare), there is still the group that has coverage through their former employer that covers the gap and many on Medicare do not take enough drugs to reach the donut in the first place.
In addition, even before Obamacare, the number of people reaching the dollar limit at the donut hole was declining due to a greater use of generic drugs and more prudent use of brand drugs. According to the Medicare Trustees, generic drugs make up 80% of all Part D drugs up from 75% in 2009.
So, I guess not having a large out-of-pocket cost if you are one of those who were affected by the so-called coverage gap is good for you, but the reality of this political football is a bit different from what the press and politician would have us believe.
NOTE that the chart below excludes those with dual coverage and non users.
Related articles
- 90 Percent Of Seniors Are Satisfied With Medicare Part D (thinkprogress.org)
- How does this Donut Hole really work? (getlifebenefits.wordpress.com)
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