By DAVID MANN
Candidates vying for Indiana’s 9th District congressional seat have mixed feelings on a new report put out by House Democrats that shows nearly 84 percent of Indiana seniors may fall into what’s known as the Medicare “doughnut hole.”
The term “doughnut hole” refers to a gap in prescription drug coverage subsidized by the federal government. The Medicare Part D program is a new program that helps seniors pay for the costs of prescription drugs. It began in 2006.
Basically, the government will help Part D subscribers with the cost of drugs until they spend more than $2,250. After that point, the government doesn’t help pay for the cost until the subscriber pays up to $3,600 out of their own money. The gap between $2,250 and $3,600 is called the doughnut hole.
According to a report released last week by Democratic members of the House Ways and Means committee, about 200,000 of new drug plan enrollees in Indiana may fall in that gap — meaning they will be at risk of losing coverage for their medications while they continue to pay monthly premiums to their insurers. Those seniors number about 7 million nationwide.
Republicans hailed the Part D program as the answer to American seniors’ prescription drug crunch. However, in their report, Democrats say the target — $3,600 to resume coverage — is set way beyond what most people will spend. That is to say that most will never have their coverage resumed, because most will never spend that much.
“This most recent report highlights a major flaw in the new Medicare prescription drug plan,” said 9th District Democratic Challenger Baron Hill. “No American should go without lifesaving treatment because he or she cannot afford the cost of prescription drugs.”
Hill described the gap as “deserting” seniors and said that needed to change.
Hill offered that he would favor a system in which drug benefits are added to the Medicare system as a monthly payment — essentially skipping the complexity of doughnut holes, multiple plans and other factors. People who need drug benefits can pay the extra month costs while people who don’t won’t, he said.
CAMPAIGN TOOL
Democrats have been using the new report as a campaign tool since it was released last week. Critics of the program seized upon the report, which was based on data provided by the Centers for Medicare and Medicaid Services, a federal agency.
Last Friday was even declared “Doughnut Hole Day” by some critics, the statistical day in which most seniors would fall into the gap.
Numerous attempts to reach Republican incumbent Mike Sodrel for this article were unsuccessful. Cam Savage, Sodrel’s campaign manager, noted that this is the first time the government has offered a drug benefit. People are saving money from it, he said. And that’s the important thing.
Libertarian Candidate Eric Schansberg is not a fan of the program. Schansberg argues that too much insurance has created the high cost of health care.
While many refer to the U.S. health care system as market-based, Schansberg points out that the government is involved through numerous programs and labor regulations.
Despite the fact that premiums are rising and coverage is diminishing, he said, people are over-insured in some cases because of government intervention. Health insurance is paying for everything, whereas most other forms of insurance — such as fire or auto insurance — only cover catastrophic events.
“Imagine instead that auto insurance covered every tire change, every door ding, and so on,” he said.
What would happen to the cost of an oil change if auto insurance covered 85 to 95 percent of it, he mused.
The only thing that would help — that our government would be willing to do — is embrace Health Savings Accounts. Essentially, the accounts are tax-free savings accounts which could be used to cover medical expenses.
That would give people ownership and incentives more in-line with a traditional market-based insurance approach, he said.
