Democrats Stoke Discontent Over Prescription Drug Plan

By Susan Jones | July 7, 2008 | 8:23 PM EDT

( - Americans will hear a lot about "donut holes" in the days ahead, but it has nothing to do with the nation's obesity "epidemic."

Democrats and some liberal interest groups are furious that the government's new prescription-drug entitlement program forces some senior and disabled citizens to pay the full tab for their own prescription drugs -- beyond a certain dollar amount. They argue that the cost of prescription drugs is still too high.

On Thursday, Sen. Debbie Stabenow (D-Mich.) and Rep. Jan Schakowsky (D-Ill.) joined members of two liberal advocacy groups in urging Congress to "fix the harmful coverage gap" in the Medicare Part D prescription drug plan.

The gap in prescription drug coverage, popularly known as the "donut hole," starts when an individual's annual drug costs reach $2,250. After that point, the individual must pay nearly $3,000 out of his or her own pocket until coverage kicks in again at the $5,100 level.

The Congressional Budget Office has estimated that about a quarter of all Medicare beneficiaries will amass drug spending that pushes them into the "donut hole." By that reckoning, an estimated 75 percent of beneficiaries will not be affected.

But according to the Campaign for America's Future, "Outraged citizens around the country have organized protests, petitions and an innovative campaign urging Congress to eliminate the donut hole."

The group estimates that the average Part D enrollee will lose coverage starting on Friday, Sept. 22 (a date that comes just a few weeks before Election Day).

The Campaign for America's Future says people who fall into the coverage gap can thank "conservative policies bent on shrinking indispensable government services and outsourcing government responsibility to the private sector."

"This costly, confusing and corrupt prescription drug plan written by and for the pharmaceutical and insurance companies exemplifies the conservative ideology of governance -- outsource essential government services to corporate cronies and pass the bill on to the taxpayers," said Campaign for America's Future co-director Roger Hickey.

"As a result, millions of seniors caught in the donut hole will go to the pharmacy this fall and be forced to pay thousands of dollars for prescriptions," he said.

Sen. Stabenow said senior citizens in Michigan and around the country are "stunned" to learn they will have to scramble to pay thousands of dollars for prescriptions they thought would be covered. "It didn't have to be this way, but unfortunately, this Medicare prescription drug program was created for the drug companies and not for seniors," Stabenow said.

Critics say the pharmaceutical industry helped write Part D -- and is reaping record profits thanks to the new program. Worse, they say, the pharmaceutical industry is now funneling millions of dollars to mostly Republican candidates in the 2006 election cycle.

"The Bush administration pushed through this sham of a Medicare prescription drug benefit, saying that it would help seniors and people with disabilities," said Rep. Schakowsky, the chief deputy Democratic whip. "But what we got was a plan that shifts costs to seniors and people with disabilities while padding the profit margins of drug and insurance companies."

The Campaign for America's Future is circulating an online petition demanding that Congress "fix Medicare's Part D disaster immediately."

"Because the drug companies' interests were put ahead of seniors, taxpayers are paying a Cadillac price for a Pinto prescription drug benefit for seniors," said Brad Woodhouse, spokesman for Americans United (a group formerly known as Americans United to Protect Social Security).

Big government vs. big business

Democrats have complained that the Republican prescription drug plan does not adequately address the high cost of prescription drugs. They are pushing legislation that would authorize Medicare to use its bulk purchasing power to negotiate lower prices for prescription drugs.

Right now, that can't happen -- because the law establishing the prescription drug program specifically bars the government from negotiating the price of prescription drugs on behalf of Medicare beneficiaries.

Instead, a number of private companies and insurers compete with each other, offering different plans for different needs -- and negotiating price discounts from the drug manufacturers on their own.

The Congressional Research Service, in a February 2005 report to Congress, outlined the arguments for and against allowing the government to directly negotiate drug prices with drug manufacturers.

Those opposed to greater government involvement question whether the federal government would be able to get greater price discounts than the private sector would.

They also say government involvement would limit the number of drugs available at a discount. And pharmaceutical companies worry about retail prices dropping to the point where research and development (and the ability to bring new drugs to the market) would suffer.

"Proponents of a market-based, decentralized approach also believe that having a variety of [private] organizations negotiating different prices will result in more choices available to Medicare beneficiaries and, therefore, better patient outcomes," the CRS report said.

Although Democrats and liberals don't like the Medicare Part D program as written, many of the beneficiaries apparently do.

A survey conducted in April by the American Association of Retired Persons shows that 78 percent of those enrolled in the new program like it.

"Before Medicare added a drug benefit, more than half of those in the program either lacked drug coverage or had inadequate coverage that did not protect them from high out-of-pocket costs," said AARP Director of Health Strategy Cheryl Matheis. "The new plans fill a critical need for affordable prescriptions drugs," she added.

In a press release announcing the April survey, AARP said it was already hearing stories of people saving money. "Only a few short months ago, we were hearing stories from people who had to make difficult choices to afford their prescription drugs. Now the choice has become which of the many drug plans is best for me?" noted Matheis.

That survey, however, was conducted before most beneficiaries had time to rack up enough drug costs to enter the "donut hole."

See Earlier Story:
Group Reappears With New Target for Liberal Attack (14 Mar. 2006)

Subscribe to the free daily E-Brief.

Send a Letter to the Editor about this article.