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Rebate checks take bite out of Medicare 'donut hole'

Posted June 10, 2010

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— The federal government began mailing $250 checks Thursday to senior citizens who fall into the gap in Medicare coverage of prescription drug costs commonly known as "the donut hole."

The rebates are the first tangible benefits from the national health care reform law President Barack Obama signed in March, and about 120,000 seniors in North Carolina will qualify for a check.

People who have Medicare Part D prescription-drug coverage pay 25 percent of the cost of their medications until the total cost hits $2,830 for the year. Then, they are on the hook for all of the cost until the total hits $6,440, at which point Medicare picks up 95 percent of the cost for the rest of the year.

Prescription drugs, medications Medicare rebate checks are initial impact of health reform law

Mary Watkins, 68, had a small stroke in 1998, and she now takes a brand-name blood thinner and five other prescription drugs. Her monthly bill for medications is about $400.

Watkins said she expects to fall into the "donut hole" this summer, and she is eager to receive her rebate check to help pay for some of her health care costs.

"You have to take the medicine if you want to keep your health going," she said.

The government will mail rebates monthly to seniors as more of them hit the coverage gap. Beginning next year, the health reform law will provide additional prescription discounts for seniors – 50 percent on brand-name drugs and 7 percent on generics – and it aims to close the "donut hole" by 2020.

"Anything we can do to lower drug costs is going to be a positive thing for seniors," said Bill Wilson, AARP's associate director in North Carolina.

But Frank Sloan, the J. Alexander McMahon Professor of Health Policy and Management and Professor of Economics, in the Sanford School of Public Policy at Duke University, said the rebates don't address the real problem of high prescription drug costs or the future of Medicare.

"In terms of a healthy policy fix, it does nothing. It's zero," Sloan said. "How do we finance (Medicare) in the long run?"

3 Comments

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  • wayneboyd Jun 14, 9:39 a.m.

    I will not make an apology for my comment, I am a great grandfather, and I am verhemently opposed to anyone passing of anyone's debts on to my chilren and grandchildren. In view of todays economy my grandchildren will never have the money to afford any kind of healthcare, this lady has already had 2,800 dollars of her medications paid for by medicare part D, surely she can better afford to pay the $250 dollars the government is going to give her than my granddaughter can afford to pay that $250 back twenty years from now when it will be, with interest approximately $1200, My grandchildren have had enough of somebodys else's bills heaped on their shoulders. Mrs Watkins would probably feel better, and live longer if she threw all those poisons she's making somebody rich taking down the toilet.
    There was a reason God said "beware of doctors and lawyers."

  • lisa4 Jun 11, 4:30 p.m.

    SHAME ON YOU WAYNEBOYD!!!!! NASTY COMMENT - YOU SHOULD HAVE KEPT IT TO YOURSELF!! HOW DO YOU KNOW MRS. WATKINS HAS GRAND CHILDREN??

  • wayneboyd Jun 11, 11:42 a.m.

    Mrs. Watkins the next time your grand children come to visit, look at them...they're going to have to face tough health care costs also, and you're going to place the responsibility of yours on their shoulders also?You should be ashamed. What a me-me-me society we've become!