Keep Your Eye On The Hole

Not the doughnut. If you think seniors are already pissed about Medicare's new drug plan, just wait. Washington Post (12.25.05):

"(T)he benefit structure is, shall we say, unusual. First, there is a $250 deductible, meaning you don't get any benefit until your drug costs exceed that amount. After that, you pay 25 percent of the costs up to $2,000. Then, at $2,251 -- in a provision that has come to be called the doughnut hole -- coverage generally ceases until your costs reach $5,100, at which point it picks up again and pays 95 percent of any additional costs." Medicare's 'Doughnut Hole' Awaits

This has been common knowledge for quite some time. WebMD (06.01.04):

"The structure means that sicker patients with higher drug costs will end up not only paying more for their drugs, but paying a higher share of their drug costs than those with fewer prescriptions, Moon says. A senior with $1,000 in annual drug costs would pay $438 out of pocket under the plan, while a beneficiary with $5,000 in costs would be responsible for $3,500 of their total costs." Report Warns of Medicare Drug Coverage Gaps

And this doesn't factor in what granny will have to shell out for her premium!! Economic Policy Institute (11.26.03), via MaxSpeak:

"Essentially, anybody with less than $810 in expected annual drug costs will not reap any benefits under Part D, and this constitutes half of the over-65 population." New plan fails half of elderly in 2006

To put it another way, if granny's drugs cost less than $810.00 a year, she'd be better off paying for them out of her own pocket. According to EPI, its estimate as to "half of the over-65 population" is "based on 2000 Medical Expenditure Panel Survey drug expenditures inflated to 2006 using the estimated rise in the consumer price index for prescription drugs and medical supplies. This does not include poor persons whose drug expenses are more heavily subsidized." Even if it's not that many, it's still a bad deal for a lot of folks. And just wait until the ladies on granny's floor down at the Senior Apartments find out about the doughnut hole. How do you spell "shitstorm"?