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  • Side Effects: Donut Hole Hold-Up

    Last Thursday, the White House trumpeted Obamacare’s first step in closing the Medicare “donut hole.” Checks in the amount of $250 were sent to 80,000 seniors in the “hole”—a gap in Medicare’s coverage of prescription drug benefits for seniors. Ultimately, Washington will cut 4 million of these checks, totaling $1 billion, to help paper over the coverage gap.

    The gap was no accident, mind you. Congress crafted it deliberately in 2003. It enabled them to claim, with the Congressional Budget Office’s blessing, that the new entitlement to drug coverage under Medicare would cost no more than $400 billion over 10 years.

    Under the “donut hole” provision, drug benefits run out for some seniors, who must then pick up the total cost of their prescriptions. However, once they pay $3,610 out of pocket, the coverage kicks back in again.

    The $250 rebate checks are intended to offset a portion of those out-of-pocket expenses.

    But Politico reports that, “No sooner than the Administration dropped the first batch of $250 Medicare rebate checks in the mail, they have already run into their first snafu.”

    The state of Vermont has asked 2,800 seniors to send their rebate checks to the state treasury. Turns out, Vermont covers the “donut hole” expenses of its low-income seniors through VPharm, a state-run assistance program. Since these seniors have paid nothing out of pocket, their “rebate” was redundant—a wholly unjustified check from the federal government—courtesy of U.S. taxpayers.

    Vermont’s message to low-income seniors: Give us your rebate or face a $250 deductible for your drug coverage. Meanwhile, officials in the Obama administration say they’ve made no mistake in sending rebates to people who’ve paid nothing.

    The donut-hole “rebates for nothing” debacle is further evidence that the federal government is unable to efficiently manage health care for the entire nation, especially considering the variation among state health care systems. As state and local governments sort through the massive amount of Obamacare rules and regulations, they’re starting to learn just how big a mess Washington “reform” has left for them to clean up.

    This post was co-authored by John Scott Overby.

    Posted in Obamacare [slideshow_deploy]

    7 Responses to Side Effects: Donut Hole Hold-Up

    1. Easygoin, orlando says:

      Ignorance is bliss. The problem is the donut hole that the Bush administration created, not Obama and not as you like to say Obama Care. So you try being disabled and living off of $1900 a month with $900 in medication co-pays. That is exactly my experience and I am forced to make a choice of paying to keep a roof over my head or buying medications. Furthermore, I was a working American Citizen, who quite frankly made a good living and contributed to society. So now when I need my tax dollars most, I can't get the help I need to stay alive. Shame on all of you for you insensitive and selfish comments about your tax dollars. Once you pay them, they become part of the public pool. You just try living with a life threatening illness on disability… Just try it! The new healthcare legislation is trying to fix many of the problems that conservatives screwed up. Its not socialism its compassion.

    2. Ronald Raygun, Cali says:

      What a bunch of nonsense.

      First off, this deals with the Bush senior prescription coverage, not Obama's health care reform. Secondly, it's $700K out of $1B. and Lastly, the problem was caught and taken care of by — what do you know? — gov't.

      Very unclear how this shows that health care reform will be problematic. Especially since the measuring stick is against the horrible and wasteful private insurance system we've been living with. Thanks for the useless politicized conclusion.

    3. Chip, Ocala Fl says:

      1) We have 6 years of track record on the Medicare Prescrition Drug Program. Has it performed as the models that were used to sell it predicated?

      2) Is there any causation/correlation of the passage of said Drug Program to the 1000's of drugs now available at low cost at Walmart's and such?

      3) What happened to the "Why won't the let us buy drugs in the Canadion market" movement?

    4. ken says:

      That's $700,000.00 the federal government already overspent due to Obamycare. Let the waste begin!!!

    5. William Bachmann says:

      The attempt to bribe me with $ 250 in order to ignore the future shortfalls suffered by children and grand children is insane. However, I will keep the money as it will be put to better use than in the hands of the government

    6. Dan, Huntington Park says:

      Here's lies the problem ever since Congress statred the "GAP" program in 2003: First, the GAP really effects those of us on social security (SS)who NEED expensive Meds, while many will never reach thier own gap.

      Now, the 250.00 rebate check (if I ever get one of thoses) will help the missing Cost of Living we never got this year, but it will only cover the cost of my lowest prescribed meds for one month.

      You see… I'm in the GAP right now, and my meds cost me $600.00 a month. And, while not all of us on social security (SS) need expensive meds, those of us that do…really got a screwing by Congress. WE do have other living expenses besides meds, but apparently the President and Congress do not care..as long as they have more tax payers money to spend on foolishness.

      Many of us BAby Boomers where raised to ONLY spend what we can afford to cover (pay) so we never needed to borrow. However, members of Congress where never taught to save for a rainy day, because most all of them where born into wealth.

    7. treadmiller707-Queen says:

      It figures-Vermont paying its own $250.00 per donut hole Medicare patient ;and the Feds knowing about it and not caring how they spend our taxs dollars.

      So much for socialism and a trillion dollar entitlement we don't need.

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