There’s No Such Thing as a Free Donut

Robert Moffit / June 08, 2010

President Obama, joined by HHS Secretary Kathleen Sebelius, is holding a televised Town Hall Meeting today on the benefits of his big health care law with senior citizens in Wheaton, Maryland. The President’s public relations offensive will be coordinated with unions and a bevy of liberal interest groups, ranging from the AARP to the National Gay and Lesbian Task Force. The President’s appearance is specifically designed to put the national spotlight on a “ milestone”  provision of the unpopular national health law: A $250 rebate to help senior citizens pay for prescription drugs if they should find themselves in the so-called “donut hole”. The “donut hole” refers to the gap in prescription drug coverage where seniors, after reaching a certain spending limit, are required to pick up 100 percent of the drug costs, until they  reach a catastrophic threshold and then regain full coverage.

Curiously, the “Donut Hole” that the new rebate is starting to “fill up” is the federal government’s creation in the first place. There was nothing quite like it in “nature.” Instead, it was designed by Congress in 2003 to shave the cost of the newly created universal Medicare drug entitlement, and thus help the Congressional Budget Office numbers come out right. Sound familiar? (more…)