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Little Known Federal Health Provision Saves Seniors on Drug Costs

By Bryan Thompson, Kansas Public Radio

http://stream.publicbroadcasting.net/production/mp3/kcur/local-kcur-975376.mp3

LAWRENCE, Ks. – A little-known provision in the new federal healthcare law is starting to save senior citizens a lot of money. The provision, contained in the Affordable Care Act, took effect at the beginning of this year and now, senior citizens are starting to take notice. As Kansas Public Radio Bryan Thompson reports, that could translate into stronger support for the embattled law.

Joe Collins, of Lawrence, got a surprise during a recent visit to his local pharmacy. Collins, who is retired from the museum of natural history at the University of Kansas, is diabetic. He takes two forms of insulin. His co-pays can get expensive even though he's covered by Medicare Part D and has good supplemental insurance.

"I thought that Obamacare started sooner, but I really hadn't seen any affects until I went to pay my pharmacy bill," says Collins. "I usually pay $100 a month for a particular kind of insulin. And I went in to get my normal allotment of insulin, it was only $50 a month."

Collins thought someone had made a mistake.

"I tossed it up to him. I said while I was standing there at the counter, 'My, that's substantially less than what I paid the last time.' And they looked it up on the computer, and they said, 'Yes it is.' And I said, 'Do you have any explanation for that?' And they 'no, but congratulations.' So, I took it and ran like mad.

Collins went home and began checking around. He eventually found out that he had benefited from a new provision of the Affordable Care Act. It's designed to gradually eliminate the coverage gap in the Medicare Part D prescription drug program.

The coverage gap, or "donut hole," kicks in when seniors on the program have purchased $2800 worth of drugs in a given year. At that point, Medicare stops paying for drugs, and the customer has to pay the entire cost -- out-of-pocket. But once a person's total drug costs reach $6400, Medicare's catastrophic coverage begins, and picks up nearly all of the expense. At the end of the year, it all starts over again.

But here's what's new this year: The new federal health law now requires drug companies to cut in half the out-of-pocket amount seniors pay for name-brand drugs when they're in the donut hole.

Joe Collins and his pharmacist weren't the only ones caught off guard by this new benefit. Pat Hubbell is a pharmacist at Sigler Pharmacy in Lawrence. When asked about that new provision, he'd never heard of it either.

"I guess maybe I don't realize what they changed for this year," says Hubbell."As far as 50 percent, I don't recall that."

Hubbell pulled out a notebook, and began reading a document sent out by Medicare.

"I'm reading this information stating this can be true, but it is," says Hubbell."So it's unusually that we havn't heard a lot of information about this because that's significant for folks that they move through Medicare and the gap. So that's very important information that we all need to be aware of."

Jonathan Blum oversees the Medicare program for the federal government. He says his agency has tried to get the word out about changes in the drug benefit under the Affordable Care Act.

"Through our beneficiary notification materials, through our outreach efforts, we've worked hard to help promote this benefit," says Blum.

Yet it's obvious that many people have somehow missed that message. Blum says one reason people aren't more aware of the new benefit is that it's designed to work automatically.

"The discounts get applied at the pharmacy point of sale. They don't have to submit any extra paperwork," says Blum. "We built this program to be seemless with the underlying working program. And our goal is to make it as simple for our beneficiaries, and they will see real savings when they go to the pharmacy."

That's what happened with Joe Collins, and more than 270,000 other Americans. They've already saved about $600 each.

In Kansas alone, nearly 3000 people have benefited -- saving a combined total of $1.6 million in the six months since the new provision took effect.

Those numbers will grow as the year progresses because most seniors don't spend enough on drugs to fall into the donut hole until the latter part of the year. Blum says approximately 4 million American seniors will spend enough on drugs to benefit from the new law. And, he says the new law will actually save money for the Medicare Trust Fund because of the way the new benefit is financed.

"It requires all brand-name manufacturers to offer a 50 percent discount on the cost of drugs provided in the donut hole. And over the next ten years, the benefit will continue to get richer until the donut hole is phased out by the year 2020," Blum says.

That's welcome news for senior citizens who struggle to pay for the drugs they need, according to pharmacist Pat Hubbell.

"As one of my favorite cartoon states, it shows an individual at the pharmacy. The pharmacist is telling them to take the medicine with food, and the customer's response is, 'Well, if you'd like me to take that with food, you gotta give me some of my money back," says Hubbell.

All kidding aside, Joe Collins expects the savings for him and his wife to be Substantial.

"Even if it's only for half a year or however how long - it happened to kick in on June 1. Maybe I'd get six months benefit there," says Collins. "This is good. It's a very, very quiet gift to all of us."

That's the kind of reaction supporters of the new healthcare law have been touting. They think support for the Affordable Care Act will grow as more people begin to understand what's in it for them.

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Related links:

 

  • Healthcare.gov - Seniors in the Donut Hole Have Already Saved $166 Million 

     

  • Healthcare.gov - Making Medicare Prescription Drug Costs More Affordable 

     

  • Sebelius Announces Drug Discount for 

     

  • Medicare blog - What Is the Donut Hole? 

     

  • Medicare.gov - Closing the Coverage Gap 

     

  • Centers for Medicare and Medicaid Services - Medicare and the New Health Care Law 

     

  • Medicare.gov - Bridging the Coverage Gap 

     

  • CMS - Prescription Drug Plan Resources 

     

  • Medicare Coverage Gap Discount Program Agreement 

     

  • PhRMA news release - Discount Program 

     

  • Sigler Pharmacy 

     

  • MAPRx - Key Changes to Medicare Drug Program In Health Care Reform 

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