Donut hole dunks politicians in latest election

December 11, 2006

If there is a lesson from the last election, it may be this: Beware of seniors bearing donuts. Pennsylvania Representative Melissa Hart, a Republican from the southwestern part of the state, certainly should have. Instead, just two weeks before the mid-term elections, Hart called the police to handle a group of 40 Association of Retired Americans (ARA) activists who brought donuts as a demonstration against the donut-hole gap in coverage in the Medicare Part D benefit. Hart, who was leading in polls at the time, went on to lose the election.

More than three million Medicare Part D beneficiaries are expected to reach the donut-hole gap in coverage at some point this year. The gap in coverage begins when recipients have spent a total of $2,250 on prescription drug costs and lasts until catastrophic coverage begins only after the recipient has shelled out an additional $2,850.

Outside of the protests, measuring the current impact of the donut hole has been difficult. In a move perhaps designed to minimize conflict with donut-hole seniors, the Department of Homeland Security announced in October that it would no longer interdict small amounts of prescription drugs coming from Canada, even though drug importation is still technically illegal.

Still there is little hard evidence on how seniors are reacting, allowing activists and politicians to come up with their own spin. When first proposed, the Medicare Modernization Act (MMA) and especially the Medicare Part D provisions were predicted to be a political advantage for the Republican Party. Instead, Medicare Part D and especially the donut hole became rallying cries for opponents. In addition to Hart, numerous other Republican Representatives and Senators received donut delivery protests.

Following the election, opponents were clearly happy and saw sentiment against Medicare Part D as a key issue in the Democratic victory. As Ed Coyle, ARA executive director, noted, some of the politicians most closely associated with MMA lost in their individual races, including Nancy Johnson (R, Conn.) and Clay Shaw (R, Fla.).

Coyle also saw Medicare Part D as a key issue in many House of Representative races, where Democrats picked up seats, as well as the Senate races in Ohio, Pennsylvania, and Virginia. "My hope is that the members of Congress get this message," he opined. "They ought to close the donut hole."

Congress may be listening. Making changes to Medicare Part D is part of the new Democratic majority's agenda for the "first 100 hours." In a written agenda, the expected new Speaker of the House Nancy Pelosi (D, Calif.) pledged to: "Make health care more affordable for all Americans, and we will begin by fixing the Medicare prescription drug program, putting seniors first by negotiating lower drug prices."

Of course, long before any new legislation is proposed or passed, Medicare Part D beneficiaries will need to sign up or renew for 2007 plans. According to the most recent polls, the vast majority of seniors plan to renew for 2007, although the choices for seniors in the donut hole may be just as confusing and difficult as their original choice. By all accounts most plans have changed significantly-especially with respect to the donut hole.

According to a recent analysis sponsored by the Kaiser Family Foundation, more Medicare Part D prescription drug plans (PDPs) offer some coverage in the donut hole in 2007 than in 2006, but most of that coverage is for generic drugs only. The study's authors found that 71% of the 1,875 PDPs in 2007 do not have any gap coverage, while 27% provide coverage only of generic drugs during the gap. Only 27 PDPs cover both generic and brand-name drugs in the gap. For those plans with brand-name coverage in the gap, premiums will be three times greater than for plans without any gap coverage.