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FACT CHECK: 90% of Seniors Will See NO BENEFIT from Administration’s “Important” Prescription Drug Announcement

September 23, 2010

Today, Vice President Joe Biden and Health and Human Services Secretary Kathleen Sebelius tried to put the best spin possible on the Administration’s unpopular health care law by touting changes to the Medicare prescription drug “donut hole.” Here’s what the Obama Administration won’t tell you: the vast majority of seniors – nearly 90 percent – will see no benefit from this program and many could end up paying more for their prescription drug coverage.  To make matters worse, the Associated Press is now reporting that, “premiums will go up an average of 10 percent among the top plans that have signed up some 70 percent of seniors.”

Here is how the numbers breakdown according to the latest Part D claims data available on CMS’ website:

27.6 million    Number of beneficiaries that were enrolled in a Part D plan or 
                      Medicare Advantage (MA) plan with drug coverage in 2008. 

8.6 million
      Number of beneficiaries who had drug spending that put them into the
                      donut hole.  

4.7 million
      Number of beneficiaries that receive low-income subsidies who reached the 
                       donut hole but are not subject to the donut hole’s cost sharing requirements.  

2.8 million
      The actual number of beneficiaries (10% of the original 27.6 million enrolled
                       in a Part D plan or Medicare Advantage plan with drug coverage) who are
                       responsible for 100% of the drug costs and might benefit from the changes
                       to the donut hole.
This means that 9 in 10 seniors will see no benefit from the policies highlighted in today’s announcement and, as the nonpartisan Congressional Budget Office predicts, the vast majority of seniors will see their Part D premiums increase by 9 percent, over typical increases, as a result of these changes.  To make matters worse, the Center for Medicare Advocacy and Medicare Rights Center has 
warned that, “There is legitimate concern that some manufacturers will steeply increase the price of drugs in order to offset the cost of the discount to the manufacturers at the expense of both consumers and the Medicare program itself.”