Since the Coventry AdvantraRx plan paid for most of their drugs, minus $20 copays, the Starks were ecstatic. Suddenly, one day the coverage stopped. Donna was told by a pharmacist that coverage would continue only after each of them had spent $3,600 on drugs. The Starks are in their 70s and retired.
"We started wondering what in the hell was going on," said the Starks' daughter, Cheri Brudevold, who cares for her parents. Initially, she suspected it to be a scam. But it was not.
The Starks had actually tumbled into a complicated technical gap called the "doughnut hole" — a gap specifically designed as part of the Part D program that compels Medicare patients to pay the whole amount of their drug costs for a period after they reach a certain spending threshold. More than 3 million Americans will be affected by this gap in 2006. The average senior's drug purchase this year will reach the threshold next month. When this happens, many ignorant seniors will find it as troublesome as it was unexpected.
"I've never known insurance that has this hole in the middle," said Liz Mercer, a Part D expert with the Statewide Health Insurance Benefits Advisors (SHIBA) program at the state Insurance Commissioner's Office.
"It doesn't feel logical at all."
To provide affordable coverage for seniors with average drug expenses and to provide catastrophic coverage for people with huge drug bills were the 2 chief aims of the Congress that created Part D.
Medicare pays for two-thirds of the first $2,250 in purchases under the standard Part D plan.
After $5,100, it pays 95% of the drugs' cost. But in between lies the --doughnut hole — $2,850 wide!! The seniors must pay that from their pockets!!
But the hole ends when the patient's personal expenditure for the year has exceeded $3,600.
So the spending amounts to $5,100 when added to what Medicare has contributed!!
Plan D's complicated design has even confused the experts.
Volunteers at SHIBA have spent months guiding puzzled seniors through 70 different Part D plans sold by private insurers in Washington.
Interpreting Part D is so mentally challenging that some volunteers have come to joke that it's "the government's way of staving off Alzheimer's," Mercer said.
Part D covers about 625,000 people in Washington. Around 225,000 of them voluntarily enrolled, and about 400,000 others were mechanically signed up from retiree plans or from Medicaid.
Some people including all of the low-income people are exempted from the doughnut hole as their employers or the government pays to cover the gap.
Seniors with incomes below 150 % of the federal poverty level ($14,700 singles; $19,800 couplesare eligible for subsidies from the Social Security Administration to bridge the gap.
According to PricewaterhouseCoopers, the auditing giant, 24 % of all Medicare beneficiaries, or about 10.4 million Americans, belong to plans that have the doughnut hole. Seven million of them are not likely to buy sufficient drugs to activate the coverage interruption.
That still leaves 3.4 million Americans exposed to the gap.
In spite of anticipating it, many seniors are shell-shocked when it sets in.
Bob Murphy, a retired senior vice president of a medical-insurance company who volunteers to help other seniors through the SHIBA program. In spite of that, he says he was shocked when he had to start paying in full for his wife's prescriptions in May.
Wife Diane's prescriptions include a daily shot of Copaxone worth about $1,300 a month for multiple sclerosis.
"Even though I knew it was coming, it was still a shock," Bob Murphy, 67, said. "It's a lot of money."
About 85 % of the cost of Diane's prescriptions until last year was covered by the retiree drug coverage through his former employer.But his former company, Blue Cross and Blue Shield of Kansas City, changed to a Part D plan in January so it could get federal subsidies for it.
Diane Murphy has since gotten through the doughnut hole by spending $3,600 of the couple's own money; now they have to pay only 5 percent of her drug costs until the end of December. One month's supply of Copaxone now costs them just $68.
Part D is well worth its cost for the Murphys. Diane gets about $20,000 worth of drugs annually, so even with the doughnut hole Medicare covers about 80 % of their drug bill.
An average of $24 per month is the premium for Part D plans. Seniors can shell out more for plans exclusive of the coverage gap. But only 6 of the 45 stand-alone Part D plans sold here pay for generic drugs during the doughnut hole and coverage of brand-name prescriptions is by only one, Humana Complete.
Michael Marchand, a Seattle spokesman for the Centers for Medicare & Medicaid Services"By the time most seniors reach the doughnut hole they will have received at least $1,500 in benefits through Part D — an expense they otherwise would have borne themselves."
"Don't get caught up on how much you paid last month," Marchand said. "You really have to look at what the program provides for you during the course of the year."
Enrollment between Nov. 15 and Dec. 31 for Part D plans, when seniors can sign up for the first time or change plans. It would be better for some seniors to go for more expensive plans that don't have the hole, or with plans that cover all the drugs they take.
As for the Starks, they're too disappointed to prepare for open enrollment, said their daughter-in-law, Meg Stark. The couple lives on $2,400 , Grover Stark's Burlington Northern railroad pension. Once a month his wife goes to the Sequim food bank.
Grover and Donna Stark should each spend $3,600 out of pocket before Part D will recommence coverage under his or her plan. By the time they both come out of the doughnut hole, the couple would have bought a collective total of $10,200 worth of prescriptions. Only 30 percent of that will be paid by the insurance.
Said Meg Stark: "Isn't that crazy!"