Leier: Let’s talk about donuts


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Opinion: Medicare Donut Hole

Monica Leier

Actually, let’s talk about the donut holes in Medicare.

The aptly-named donut hole in Medicare has been a huge source of contention between the Democratic and Republican presidential candidates as of late, and it’s been a major point of concern for beneficiaries of Medicare for longer still. After seeing Mitt Romney and Barack Obama’s ads and rhetoric regarding Medicare, I had to wonder: What’s going on with Medicare and it’s donut hole?

On July 30, 1965, Medicare was signed into law as part of President Johnson’s Great Society, and 19 million seniors were enrolled in the program. Today, 47 million senior and disabled American citizens receive the advantages of being Medicare beneficiaries, including greater financial security and access to health care.

While Medicare is a fairly complicated matter, it is best conceptualized as such: Part A is hospital insurance, Part B is medical insurance, Part C is private health plans, and Part D is prescription drug coverage. The donut hole appears in Part D of the Medicare insurance package because it is the part in which there is a gap in coverage.

Medicare and the beneficiary’s copayment cover prescription drugs by a total of up to about $2,800 each year. After that total has been reached, the beneficiary is on their own to pay for their prescription drugs. Then, once the total amount has surpassed about $4,500, the beneficiary’s insurance kicks in again to cover the costs. This gap in coverage where recipients have to pay out-of-pocket for their prescription drugs is the donut hole.

Luckily for Medicare beneficiaries’ health and financial security, the 2010 Affordable Care Act now allows them to receive discounts on both brand-name and generic prescriptions. Requirements that Medicare funding go directly to beneficiaries instead of third parties mean the donut hole will close by 2020.

In just eight years, our grandparents are projected to have a decadent, chocolate-iced custard-filled donut instead of the overpriced glazed donut they’ve been stuck with since 2003.

Just when beneficiaries are finally getting a taste of the real deal — the best donut they have ever been offered — the donut hole is in danger of being reverted back to the way it was before the inception of the Affordable Care Act. The presidential ads on television are evident of this.

A recent attack ad from the Romney camp says “Obama has cut $716 billion from Medicare” to “pay for Obamacare.” This assertion is completely factually unsound. In reality, the $716 billion that Obama was supposedly robbing seniors and the disabled of is actually a cut in Medicare’s projected rate of growth over the next ten years. Furthermore, increase in cost of Medicare coverage has been funding federal subsidies to drug corporations. The Congressional Budget Office reported that eliminating these subsidies would save taxpayers $100 billion over the next decade.

According to Centers for Medicare and Medicaid Services, this type of wasteful spending is projected to make Medicare go bankrupt 17 months sooner than if the subsidies did not exist. The Affordable Care Act instead redirects the $716 billion and gives it back to the beneficiaries in the form of things like cancer screening and other preventative care without having to co-pay.

Dr. Dirk Deam, senior lecturer of political science at Iowa State University, reasoned the Romney commercial should cue viewers to give a second thought as to what they’re hearing. “The idea that the Democratic Party doesn’t support Medicare, which it invented, is ludicrous.”

Likewise, Deam makes the very logical argument that there is a major difference between pulling funds from providers and pulling funds from beneficiaries. Pulling funds from beneficiaries is most certainly an issue about which people can be upset. After all, it’s their money that funds subsidies, the benefits of which they will never see because they simply do not exist (studies show that quality of care does not increase from subsidizing health care corporations).

Pulling funds from providers in order to improve the quality of life for beneficiaries? This should be a no-brainer.

Next time a campaign team wants to target your grandmother (and you, since you’ve been paying for Medicare since your first job) with political ads that have more than a few sprinkles of “truths” to them, do a little research. If you’ve paid for the whole donut, you’re going to want to eat the whole thing and not just the ends.