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Tuesday, 18 July 2006 03:52

"Donut Hole" in Medicare Coverage Leaving Many Seniors in Trouble Because Gov't is Banned From Negotiating for Lower Prices

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The prescription drug "donut hole" was examined in a hearing yesterday by the Democratic Policy Committee (DPC). Medicare Part D plans - coupled with premiums and deductibles - provide coverage for 75% of prescription spending under $2,250, but then nothing until expenditures reach $5,100.

This donut hole was brought about by the Medicare Modernization Act in 2003, which prevents Medicare from negotiating with drug companies for lower prices.

"The drug companies are making billions of dollars in profits from this Congressionally bestowed bonanza and, unbelievably, at the same time are cutting their charitable assistance programs to older Americans in need," Robert Hayes, who is President of the Medicare Rights Center, told the committee.

Dr. Gerard Anderson of the Johns Hopkins University School of Public Health testified that the gap would be eliminated if Medicare received medicine at the same reduced costs as people in Canada, the United Kingdom, or France, as well as the DOD and VA, who are free to negotiate.

"The higher drug prices charged by Medicare drug plans means seniors - and America's taxpayers - will pay more and more," added Ron Pollack, Executive Director for Families USA.

"I, for one, am of the view that we need to eliminate the coverage gap," said Sen. Byron Dorgan, DPC chairman. "I think it is outrageous that the government is prohibited from using its purchasing clout to negotiate fair drug prices." He has introduced a bill to eliminate the gag, "but thus far the majority party has blocked this legislation."

Three seniors also testified at the hearing about their personal Medicare horror stories.

Click here to read transcripts from the hearing