The Face On The Doughnut Hole
Rep. Jan Schakowsky
September 21, 2006
Rep. Jan Schakowsky represents Illinois' 9th District.
Over the summer, I received a letter from one of my constituents, Pauline Metzger-Aronson of Morton Grove, Illinois, detailing her difficulties with the Part D doughnut hole—a $2,850 gap in coverage when people with Medicare continue to pay insurance premiums even though they receive no coverage.
After Ms. Metzger-Aronson had paid $750 in Part D drug costs, she fell into the doughnut hole in mid-June, when she watched her monthly prescription drug expenses skyrocket. Her most expensive medications jumped from $20 a month to $108 a month for one and over $240 a month for another. Faced with the reality that she was paying $46 a month for insurance that no longer worked, Ms. Metzger-Aronson had to make tough choices and she decided to no longer refill her arthritis medicine. Instead, she is taking an over-the-counter substitute that, while not as good, will have to do.
And there is no end in sight to Ms. Metzger-Aronson's troubles—she will never climb out of the donut hole this year, which ends only when she's spent a total of $3600 in drug bills. At the end of this year, she will have paid her Part D insurance premium every month for just six months of coverage. In all likelihood, Ms. Metzger-Aronson will face this same cycle next year.
Ms. Metzger-Aronson is not the only one asking members of Congress why she is paying a monthly premium when she gets no coverage. In fact, tommorrow (September 22) is the day when experts estimate that most senior citizens and people with disabilities—some 6.9 million people—who have purchased private Part D plans will fall into this coverage gap.
If members of Congress had seized the opportunity to create an affordable and comprehensive Medicare drug benefit, today senior citizens and persons with disabilities would not be paying premiums for non-existent coverage. Instead, too many members of Congress sided with the drug industry and insurance companies who stood to make (and are making) huge profits from Part D. That's how we ended up with the doughnut hole, a phenomenon that does not exist in any other public or private policy and has no place in Medicare.
According to the Center for Economic and Policy Research, if Medicare stepped in and negotiated with prescription drug companies on behalf of people with Medicare—something the drug and insurance industries fought hard to prohibit—the Part D program would save close to $50 billion in the first full year of implementation—more than twice the size of the doughnut hole.
The government negotiates with private industry all the time to secure the best prices for taxpayers. For example, in October 2001, then-Secretary Tommy G. Thompson negotiated with Bayer Corporation for Cipro tablets for federal employees. Instead of the regular retail price of $4 or $5 per pill, Secretary Thompson negotiated Bayer down to 95 cents a pill, and lower if the U.S. Health and Human Services ordered more than one shipment. That's more than a 75 percent savings.
The Veterans' Administration has a long history of using its bulk purchasing power to negotiate prescription drug prices. A Government Reform Committee Democratic staff report found that the prices charged by the top Part D plans in my Congressional District were 79 percent higher than the prices negotiated by the federal government.
The Bush administration pushed through this sham of a Medicare prescription drug benefit saying that it would help seniors and people with disabilities. But what we got was a plan that shifts costs to seniors and people with disabilities while padding the profit margins of drug and insurance companies.
I worked and voted against the bill creating the Part D program because I think it does a great disservice to Americans who have Medicare now and those who hope to have it in the future.
Since the passage of Part D, I have been working to address its major flaws, including the doughnut hole. Representatives Marion Berry of Arkansas, Tom Allen of Maine and I introduced H.R. 752, the Prescription Drug Savings and Choice Act, which would take Medicare in a new direction by siding with people with Medicare—not the drug companies. This bill would let people with Medicare enroll in a Medicare-administered drug benefit and we would force drug companies to lower their prices by requiring Medicare to negotiate for deep discounts. The savings could be used to fill the doughnut hole.
Although the Republican leadership has refused to consider our bill, Representative Berry and I are gathering signatures on a discharge petition that would force a floor vote on the Prescription Drug Savings and Choice Act. We have 174 signatures and need 218 to get action. With a Democratic majority in Congress next year, you can be sure that addressing the allowing Medicare to negotiate drug prices and using those savings to fill the doughnut hole will be on the top of our agenda.
In her letter, Ms. Metzger-Aronson quoted the saying, "As you amble through life, whatever be your goal: Keep your eye on the doughnut and not upon the hole." She wrote that it had new meaning because "some of us seniors have reached the point where the doughnut is gone and we are now forced to look into the hole." There are 46 days until November 7. Forty-six days until we have a national referendum on whether seniors get the doughnuts or the holes.