US: Millions of Medicare beneficiaries to be left without drug coverage

Part D, which went into effect this year, is a partial government subsidization of drug costs, managed through private insurers. Under the plan, Medicare beneficiaries are required to pay premiums and deductibles to private insurance companies along with a co-payment on prescriptions. Typically, enrollees pay a quarter of the actual annual cost of the drugs, up to $2,250; for those whose drug costs exceed $5,100, the co-pay drops to 5 percent. But beneficiaries whose drug expenses range from $2,250 to $5,100 fall into the coverage gap and must then pay the full price themselves. Only after paying $3,600 in prescription costs can beneficiaries in the doughnut hole again qualify for federal coverage.

This poses both a financial disaster and major health crisis for those caught in the gap, as most live on fixed incomes. A quarter of the 24 million who were enrolled in Part D as of January 1 were “dual eligible,” meaning that they qualified for both Medicare and the income-contingent Medicaid program. Of these 6.2 million beneficiaries, more than 4.3 million earn less than $10,000 a year. In most cases, these enrollees had their prescription costs covered through state-administered Medicaid programs before the Department of Health and Human Services automatically shunted their cases into managed care plans. Now some are left with no coverage at all.

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http://wsws.org/articles/2006/oct2006/medi-o02.shtml