Anything you read about the Part D donut hole is just more looney left lies. The Obama-adminstration's Health and Human Services (HHS) progagandists are great for putting out press releases three or four times every month claiming something like millions of Medicare beneficiaries have saved tens of millions of dollars because of the Patient Protection and Affordable Care Act (PPACA). But they never tell you that it is the same relatively few million beneficiaries -- out of over 50,000,000 of us -- who are saving the money over and over. And they never tell you that the people saving the tens of millions of dollars are relatively or outright rich (that's because poor seniors were never affected by the Part D donut hole that was changed by PPACA thanks to George Bush).
The trick in understanding this looney left lie is to understand how the Part D donut hole1 works. The relatively few Medicare beneficiaries who unfortunately are affected by it even slightly are exposed to roughly $4000 in out of pocket (OOP) costs while in the donut hole because the top line of the initial Part D spend phase (a little below $3000) is retail cost of the drugs, not beneficiary OOP. But the roughly $4500 top line number of the donut hole is true OOP. To reach around $3000 retail, the beneficiary would probably only spend about $500 OOP and then -- before PHRMA gave its big discounts in return for getting the Obamacare business -- the beneficiary would have had to spend another $4000 to get out of the gap.
Now -- as of 2015 -- PHRMA gives the PPACA-enshrined bribe discount of 50% to which it agreed before PPACA, Medicare pays another 10% or so for brandname drugs2 (going up to 25% in 2019), and the beneficiary is responsible for 25% (just as he or she is in the initial spend phase on average). It used to be that the relatively few people who needed a lot of drugs and are therefore fully affected by the donut hole would get about $15,000 worth of drugs for about $3,000 to $4000 (and much less in a state with a good pharmaceutical assistance program). When all the monthly blah blah blah from HHS is over in another 10 years, the relatively few people who are so chronically ill that they need these many drugs will save a few hundred dollars more than that on average (inflation adjusted).
According to the Medicare actuaries, the vast majority of us buying Part C or Part D drug coverage will pay higher premiums to make up for that few hundred dollars in savings for the few. I believe that's fair because I might need a lot of drugs some day and that's what insurance is for. But please stop lying to me about it you looney lefties.
And oh by the way, only a few percent of all the people on Medicare ever spend all the way through the donut hole and are fully affected by it.
1Not that anyone would ever really support repealing the donut hole's so-called closure nor would big PHRMA reneg on its off the books pre-PPACA promise to give donut hole discounts even if PPACA were repealed
2The rules are slighly different for generic drugs today but generic drugs do not usually cause much of a problem. And the rules will be the same in 2020
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