Posted At Macon.com

BY : Robyn Shelton

Like Bettie and Bob Sonnenberg, millions of older Americans are asking the same question as they plow through myriad Medicare prescription-drug plans:

What the heck is a doughnut hole?

As they do their homework, many are discovering that this unique and untested insurance concept can mean only one thing: more money out of their own pockets.

That's because the doughnut hole is the point at which Medicare drug plans stop paying for prescriptions, at least temporarily. The cutoff occurs when a person's drug expenses hit $2,250 in a year.

Bettie Sonnenberg probably doesn't have to worry about the hole because she takes only two medications regularly. But nearly 7 million Medicare recipients in 2006 are expected to get there - including her husband, Bob.

He relies on 13 medications to treat diabetes, a heart condition and kidney problems, meaning he could top $2,000 in drug expenses pretty fast.

"He just started on a medicine that cost $145 for 30 days of pills," said Bettie Sonnenberg, 75. "Several of his prescriptions are quite expensive."

The drug plans start in January for people who sign up by the end of this month, but Medicare recipients have through May 15 to join in 2006. Some plans have eliminated the coverage gap by offering uninterrupted coverage throughout the year. But those policies charge higher monthly fees or premiums.

In the most basic plans being offered, people will have to pay an initial $250 deductible before their drug coverage starts. After that, insurance plans will pay 75 percent of all their drug costs from $251 until they reach $2,250 worth of drugs.

But when the total cost of drugs exceeds $2,250, coverage will stop temporarily. That's when people will have to start paying 100 percent of their drug costs until they hit $5,100. That will mean an extra $2,850 of their own money.

If they still have drug costs beyond that, however, catastrophic coverage will kick in, and their insurance plans will pay 95 percent of their remaining drug costs for the year.

By creating this unique design, Congress was trying to ensure that the new benefit would cost the government no more than $400 billion during a nine-year period. The idea was to help as many people as possible by offering coverage at the low end - less than $2,250 - and again at the high end: beyond $5,100, when costs become extreme.

"There just wasn't enough money to do a continuous benefit," said John Rother, national-policy director for AARP. "So you needed something that would benefit a lot of people in the beginning, and something that would protect people who incur very high drug costs. When you put those two together, that's how you end up with coverage in the beginning and coverage at the end, but not in the middle."

Even with the doughnut hole, the program is expected to cost Medicare much more than initially expected: up to about $850 billion through 2015, according to the Congressional Budget Office.

Critics say the Republican-led Congress that drafted the Medicare drug law could have offered continuous coverage if lawmakers had cut costs in other ways. The most frequent complaint focuses on a provision in the law that prevents Medicare from negotiating with drug companies for lower prices.

Other government agencies, such as the Department of Veterans Affairs, can negotiate to reduce the costs of medications. Sen. Bill Nelson of Florida and other Democrats say there is no reason Medicare can't do the same thing.

"At the time (the drug bill was being debated), we had some estimates showing that you could basically cover the doughnut hole with the money you would save by negotiating bulk discounts," said Dan McLaughlin, a spokesman for Nelson. "There's no reason for not doing it other than a giant cave-in to the pharmaceutical makers."

During the debate in Congress, the Republican leadership defended the provision by arguing that prices would be held in check by competition among drug plans.

Though politicians may disagree on those issues, no one disputes that a large number of Medicare beneficiaries are going to be affected by the gap. One study by the Kaiser Family Foundation estimated that 6.9 million people who enroll in the drug plans would reach the coverage gap. Of those, 3.1 million are expected to make it all the way through to catastrophic coverage.

But the other 3.8 million will not get through it, including Tania Komar, 68. Komar takes about a dozen medications to treat high blood pressure, acid-reflux disease and other chronic health issues.

It's likely that some people will stop filling prescriptions or cut back on their medicines once they reach this point, said Ronald Ozminkowski, director of health and productivity research at Thomson Medstat, a company that studies health issues.

"Once they get into the doughnut hole, a lot of folks will start to split pills in half or take one pill every two days or just run out of money and stop taking them," he said.

Medstat's study, based on prescription data from more than 570,000 Medicare recipients, estimated that most people who entered the doughnut hole would get there after about seven months. Ozminkowski said the study found that people who take medications for chronic problems such as heart disease, high blood pressure and stomach disorders are more likely to reach the coverage gap.

With his heart condition and other ailments, Bob Sonnenberg, 76, fits in that category.

His wife has been investigating drug plans, making phone calls to insurers and calculating their costs. She considered plans that offer coverage in the doughnut hole but decided they would be too expensive.

The couple already spend more than $5,000 on their medications annually, as they don't have any supplemental coverage for prescriptions. So any help from the Medicare drug plans will reduce their costs. Bettie Sonnenberg expects she and her husband to save about $1,800 in 2006.

"The hardest part of this thing has been figuring out how to figure everything out," said Bettie Sonnenberg, who has decided to use the same drug plan for herself and her husband. "I'm still wondering: Am I doing the right thing? But I haven't seen anything better. It won't save us a great deal, but at least it's something."