Health reform moves to close U.S. Medicare drug gap

Democratic leaders moved on Friday to build support among the elderly for a massive overhaul of the U.S. healthcare system, saying the measure would immediately start closing a gap in Medicare prescription drug coverage.

The coverage gap, the so-called doughnut hole, occurs after a certain amount of money is spent. This year that level is $2,700 of which $896 is out of pocket expenses by the beneficiary. Coverage begins again once drug costs reach $6,154.

Speaker Nancy Pelosi said the healthcare reform bill being considered by the House of Representatives would reduce the that doughnut hole and lower the cost of medicine for as many as 4 million elderly next year.

As of January 1, 2010, our legislation will give a 50 percent discount for brand-name drugs to recipients in the doughnut hole, and it will reduce the size of the doughnut hole by $500, Pelosi said.

An earlier version of the bill would have started closing the doughnut hole beginning in January 2011.

House Democratic leaders are working to merge three healthcare reform bills approved by committees into a single bill that can pass the House and give President Barack Obama a major victory on a top domestic priority.

The emerging bill would also gradually eliminate the gap in prescription drug coverage in 10 years. The earlier version of the bill would have eliminated the gap in 15 years.

SKEPTICAL SENIORS

Medicare is a popular government health program for the elderly and many are worried that the sweeping healthcare overhaul, which includes some spending cuts in Medicare, would hurt benefits. Recent polls show the elderly are more skeptical than others about healthcare reform.

Support from the elderly, who are more likely to vote in elections than other demographic groups, is crucial to enacting healthcare reform. Closing the doughnut hole could go a long way toward winning their support and is a top priority for the AARP, an influential advocacy group for the elderly.

Republicans argue that the proposed spending cuts, mostly to the Medicare Advantage programs run by private companies, would lower benefits in those programs.

Democrats say the proposed cuts may affect some extras in those programs, like paid gym fees, but would not reduce basic benefits.

Millions and millions of dollars in ads and lobbying are being pumped out to scare and confuse the public about health reform, all designed to stop the legislation, said House Democratic Whip James Clyburn. Their top target: seniors and their beloved Medicare program.

Seniors fall into the doughnut hole once $2,700 is spent on prescription drugs, including $896 out-of-pocket costs. After that, beneficiaries have to pay 100 percent of drug costs until a total $6,154 is spent. Once that level is reached, catastrophic coverage kicks in and almost all of the cost of drugs are covered.

Healthcare reform legislation working its way through the Senate also includes provisions aimed at reducing the Medicare prescription drug coverage gap.