Cost of Prescription Drugs Drops 50% for Those in the Medicare 'Donut Hole'

The nations pharmaceutical manufacturers will provide 50 percent discounts on the cost of covered brand-name prescription drugs for beneficiaries in the Medicare Part D coverage gap, or donut hole, starting in 2011, Vice President Biden and Secretary of Health and Human Services (HHS) Kathleen Sibelius announced.

The two made the announcement on a grassroots conference call with seniors from across the country.

Thanks to the Affordable Care Act, millions of people with Medicare who will fall into the Part D donut hole next year will pay less for their prescription drugs, said Vice President Biden. The discount manufacturers will pay on brand-name drugs, helping millions of seniors who are struggling to make ends meet at the end of the month, and its just one of the ways the new health care law helps make Medicare stronger.

Biden said the Affordable Care Act has helped reduce costs for Medicare beneficiaries, beginning with one-time rebate $250 rebate checks for beneficiaries who hit the donut hole in 2010.

More than 1.2 million beneficiaries who have hit the donut hole so far this year have received their $250 rebate checks as part of the cost savings provisions in the Affordable Care Act, and millions more are on deck to get a check, Sebelius said. Now, with these new agreements, people who rely on Medicare will see even more savings off their drug costs next year, and savings will continue even after the coverage gap is closed in 2020.

Seniors and people with disabilities enrolled in Medicare drug plans will also find next year that through the use of the new tools provided by the Affordable Care Act, premiums are stable and the number of prescription drug plans that voluntarily help fill the donut hole has increased, Sebelius said. In August, CMS reported that the average 2011 Medicare prescription drug plan premium will remain similar to rates beneficiaries are currently paying this year an increase of $1.

Most Medicare prescription drug plan premiums will remain stable next year and beneficiaries will find there are clearer plan options and many plans that can help them save even more like those plans that are offering benefits that help fill the donut hole, said CMS Administrator Donald Berwick, M.D. They will find that the Affordable Care Act improves the value of drug coverage they get next year.

Beneficiaries will soon receive their 2011 Medicare & You handbook and find updated information at www.medicare.gov.

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