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Letter to The Honorable Max Baucus , Chairman and The Honorable Chuck Grassley, Ranking Member Senate Finance Committee


Location: Washington, DC

Letter to The Honorable Max Baucus , Chairman and The Honorable Chuck Grassley, Ranking Member Senate Finance Committee

Kerry, Stabenow, Nelson Push to Address 'Doughnut Hole' During Health Reform

Senators John Kerry (D-Mass.), Debbie Stabenow (D-Mich.), and Bill Nelson (D-Fla.), all members of the Finance Committee, today called on Chairman Max Baucus (D-Mont.) and Ranking Member Chuck Grassley (R-IA) to protect seniors from skyrocketing out-of-pocket prescription drug costs as part of the committee's health reform initiative.

Current gaps in Medicare's prescription drug program force 3.4 million seniors to pay more in out-of-pocket expenses than those with employer-provided health care coverage.

"The doughnut hole invited disaster from the day the Republicans conceived it and to this day it continues to create pain for our seniors," said Sen. Kerry. "Now is our chance to close the gap. If we don't, the most well-intentioned health reform will leave them with worse drug coverage than anyone in the system."

"Seniors in Michigan and around the country continue to fall into Medicare's donut hole- a gap in coverage that has them scrambling to pay thousands of dollars for prescriptions they thought would be covered," said Sen. Stabenow. "As we continue to work on a health care reform package in the Finance Committee, it is time we also take the necessary steps to give seniors the prescription drug benefit they deserve."

"Look, seniors have to pay premiums for their Medicare prescription drugs. But they still don't get full coverage," said Sen. Nelson. "So, while we're working on a program to fix the broader health-care system, we ought to include a fix for the so-called Medicare donut hole. It makes sense - and, it's the right thing to do for seniors."

The full text of the senators' letter is below:

The Honorable Max Baucus The Honorable Chuck Grassley
Chairman Ranking Member
Senate Finance Committee Senate Finance Committee
United States Senate United States Senate
Washington, DC 20510 Washington, DC 20510

Dear Chairman Baucus and Ranking Member Grassley:

We are writing to express our support for addressing the gap in Medicare's Part D prescription benefit, better known as the "doughnut hole," in the upcoming health care reform package.

Today, Medicare beneficiaries currently face out-of-pocket costs that are, on average, six times the costs incurred by those with employer-sponsored coverage. Out-of-pocket expenses are even higher for beneficiaries who are among the 3.4 million (and growing) Americans who fall into Part D's "doughnut hole" each year.

Prescription drugs play a vital role in managing or curing diseases and improving the quality of life for people of all ages. Unfortunately, the "doughnut hole" results in such high costs that too many of our seniors cannot afford their prescription drugs. Currently, 26 percent of Part D beneficiaries fall into the "doughnut hole" but only 5% reach the catastrophic threshold. Those stuck in the "doughnut hole" are required to continue to pay their Part D premiums.

The "doughnut hole" is getting worse each year because the gap is tied to health care costs which increase at a much higher rate than inflation or other indexes. In fact, costs for people in the "doughnut hole" are projected to more than double from $2,850 in 2006 to over $6,000 in 2016. This situation is untenable and leaves many of our seniors without a meaningful prescription drug benefit.

Eliminating the "doughnut hole" in Part D could save Medicare beneficiaries thousands of dollars in drug costs and increase their quality of life by ensuring they can afford their medications. Since the cost of closing the "doughnut hole" grows every year, it is essential that we begin to rectify this situation as soon as possible. Even if it is not financially practicable to close the "doughnut hole" in a single action, there are several concrete and pragmatic ways to begin to eliminate it.

One option is to reduce the catastrophic limit, or the top end of the "doughnut hole." This would give more immediate relief to those with catastrophic needs and over time the "doughnut hole" would close entirely. The catastrophic limit could be reduced by linking it to the Consumer Price Index, freezing it at its current level, or by gradually reducing it by a certain percentage each year.

We cannot leave seniors in an ever-worsening situation as we act to fix the other ills of our current health care system. We are committed to closing the "doughnut hole" as a part of health care reform, and we look forward to working closely with you to identify the best way to do so and to include it in the final health care reform package.

Thank you in advance for your consideration of this request.


John F. Kerry Debbie Stabenow
Bill Nelson

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