Sept. 04-- Milly Scott first fell into the Medicare Part D coverage gap a year ago.
A seven-year beneficiary of the government prescription coverage program for seniors, Mrs. Scott saw her co-payment for the anti-depressant Pristiq hold steady the last two years at $285 for a 90-day supply. But, between that and her other medications, she fell the program's "donut hole" of reduced coverage for the first time in October.
This year, she landed in the gap even earlier -- in July.
The donut hole -- the point at which seniors have exhausted their basic benefit and must pay a larger share of the cost out of their own pocket -- has been a financial trap door for beneficiaries, severely cutting back coverage after their drug costs reach a certain point then resuming only after those costs reach a "catastrophic" threshold.
While the federal Affordable Care Act will eventually eliminate the gap, rising drug costs until then are sending more seniors into the hole. Mrs. Scott thinks there may be more to it than simple math, too.
"Somebody benefits from this," the Ben Avon Heights resident said. "Where's this money going?"
To pharmaceutical companies most likely, since a local broker says the rising cost of both prescription and generic drugs is moving seniors into the coverage gap faster.
"If you're not paying attention to the explanation of benefits and you've been paying the same [co-payment] amount, then you would think you would get to the donut hole about the same time as last year," said Shari Herrle, director of compliance for Henderson Brothers insurance agency, Downtown.
"For someone trying to budget or plan a vacation, that's got to be really frustrating."
It all comes down to the formula Medicare uses to determine when someone hits the coverage gap, with a well-intentioned twist that seems to unfairly elongate how long people stay there.
The calculation is based on both the price of the drug and the Part D beneficiary's out-of-pocket cost.
So rising drug prices speed up the member's trip to the coverage gap, which is set at $2,960 this year (the amount increases to $3,310 in 2016).
Once in the donut hole, beneficiaries pay 45 percent of the plan's cost for brand-name drugs such as Pristiq and 65 percent of the price for generics.
After beneficiaries' out-of-pocket costs reach $4,700, catastrophic coverage kicks back in with lower co-payment and co-insurance costs.
And therein lies a seeming double whammy: While both the insurance plan's cost and the beneficiary's cost are added together to decide when someone hits the coverage gap, only the participant's out-of-pocket costs count when determining that they've hit the $4,700 upper limit and are eligible for coverage again.
"It's not intuitive. It's not something you would expect," said Mrs. Herrle.
But, she said, until the federal Affordable Care Act was passed in 2010, insurance plans did not contribute anything during the coverage gap period.
Now they pay 5 percent of the drug price and 55 percent any dispensing fee (typically only a few dollars), but neither is counted as part of the out-of-pocket spend.
From Mrs. Scott's perspective, high drug costs have put her on a bullet train to the donut hole coverage gap, but she's riding an old trolley through the gap to reach the total needed to resume coverage.
She never reached the gap's upper limit last year, and she doesn't expect to this year either.
Henderson Brothers tells clients there may be help for those who can't keep up with rising drug costs, such as the website www.NeedyMeds.org, a Gloucester, Mass.-based nonprofit that provides free information on finding affordable medications, or by contacting the pharmaceutical company directly.
Mrs. Scott is considering a different option.
"For the next refill or two, I might send to Canada for it."
Steve Twedt: stwedt@post-gazette.com or 412-263-1963.
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