Side Effects: Doughnut Hole Deal Not so Sweet

Kathryn Nix / September 28, 2010

Currently 3.4 million Americans seniors covered by Medicare find themselves in a giant “doughnut hole,” but despite the tasty terminology, there’s nothing sweet about it.

The doughnut hole refers to a gap in prescription drug coverage under Medicare Part D.  As David Hilzenrath explains, “…beneficiaries enter the coverage gap when their prescription tab hits $2,830, including both their share and the amounts paid by insurance. Once in the gap, they are responsible for 100 percent of the cost and must spend $3,610 of their money before qualifying for catastrophic coverage, which typically pays 95 percent of the cost.”

President Obama has pledged that the Patient Protection and Affordable Care Act will, “in the coming years… close the doughnut hole completely once and for all,” while also conceding that “it’s very expensive to close this doughnut hole…[, and] for us to close that right away would have blown a hole in the budget.” (more…)