U.S. pharmaceutical companies will begin offering 50 percent discounts on covered brand-name prescription drug costs for Medicare Part D beneficiaries who have reached the coverage gap, or donut hole, beginning in 2011, according to the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS).
According to Vice President Joe Biden and HHS Secretary Kathy Sebelius who made the announcement, the decision will be part of the Patient Protection and Affordable Care Act (PPACA), whose goal is to help reduce drug costs for Medicare beneficiaries. The first step of the Act is providing Medicare beneficiaries in the donut hole with a one-time $250 rebate check.
“More than 1.2 million beneficiaries who have hit the donut hole so far this year have received their $250 rebate checks as part of the cost savings provisions in the PPACA, and millions more are on deck to get a check,” said Sebelius. “Now, with these new agreements, people who rely on Medicare will see even more savings off their drug costs next year, and savings will continue even after the coverage gap is closed in 2020.”
Additionally, Biden and Sebelius offered that seniors and people with disabilities enrolled in the drug plans will find stable premiums and prescription plans that are more willing to plug up the donut hole. In fact, back in August, the CMS reported that the average 2011 Medicare prescription drug plan premiums will remain similar to 2010 rates, only increasing $1.
“Most Medicare prescription drug plan premiums will remain stable next year and beneficiaries will find there are clearer plan options and many plans that can help them save even more – like those plans that are offering benefits that help fill the donut hole,” said CMS Administrator Donald Berwick, MD. “They will find that the PPACA improves the value of drug coverage they get next year.”