Closing Part D Hole Saved Seniors $3.4B; Success of Health Law Facet Won't Last

Article excerpt

Byline: Paige Winfield Cunningham, THE WASHINGTON TIMES

Highlighting a top selling point of President Obama's health care overhaul, his administration said Monday that seniors have saved $3.4 billion on prescription drugs as the law begins to close the doughnut hole in Medicare's drug coverage scheme.

The savings are the latest evidence that the drug plan, known as Medicare Part D - signed by President George W. Bush and expanded by Mr. Obama - is helping contain costs for the country's elderly.

But darker financial clouds could lie down the road. The federal government picks up the added cost for drugs, and the price-per-senior is expected to grow faster in the next decade for Part D than for the rest of Medicare, according to the annual Medicare trustees report released last month.

It obviously rectifies a goofy feature of the prescription drug law, but at the same time it creates a richer benefit, so over time it will be more expensive, said Bob Moffit, a senior fellow at the Heritage Foundation.

For now, giving seniors more drug benefits is a gold star for the Obama administration, which has been careful to tout the measure along with other popular parts of the health care law in an election-year effort to raise public support for it.

It's a rare piece of the Affordable Care Act that has been well-received by conservatives, who generally agree that the prescription drug doughnut hole needed to be fixed.

The coverage gap, written into the original law as a way to limit its budget impact, results when a senior's drug costs hit $2,930. At that point the person must pay for all drugs until the tab reaches $4,700 and the government starts footing the bill again.

But under the health care law, the government must eventually close the gap by offering gradually steeper drug discounts to seniors each year.

In 2010, the administration awarded $250 rebates for every senior who hit the doughnut hole and seniors began receiving 50 percent discounts on name brand drugs and 7 percent coverage of generics last year. …