Affordable Care Act shrinks ‘doughnut hole’ for seniors

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November 29, 2011 9:25 AM
By Steve Benen

Most of the Affordable Care Act won’t take effect for a few years — and if court rulings and the 2012 elections go a certain way, it may not take effect at all — but there’s already evidence that the reform law is having a positive effect.

Access to coverage for young adults between 19 and 25, for example, is quickly improving, and the law is also having a positive impact on slowing the growth in Medicare spending — a priority Republicans pretend to care about — as hospitals transition to a greater focus on value and efficiency, required under the ACA.

And this week, we’re learning that seniors are now better able to afford their prescription medications. (thanks to reader N.G. for the tip)

Medicare’s prescription coverage gap is getting noticeably smaller and easier to manage this year for millions of older and disabled people with high drug costs.

The “doughnut hole,” an anxiety-inducing catch in an otherwise popular benefit, will shrink about 40 percent for those unlucky enough to land in it, according to new Medicare figures provided in response to a request from The Associated Press.

The average beneficiary who falls into the coverage gap would have spent $1,504 this year on prescriptions. But thanks to discounts and other provisions in President Barack Obama’s health care overhaul law, that cost fell to $901, according to Medicare’s Office of the Actuary, which handles economic estimates.

A 50 percent discount that the law secured from pharmaceutical companies on brand name drugs yielded an average savings of $581. Medicare also picked up more of the cost of generic drugs, saving an additional $22.

This isn’t just some fluke — the reduced costs for seniors are deliberate consequence of the Affordable Care Act. It’s one of the reasons the AARP supported the law so enthusiastically.

It’s worth noting, of course, that if Republicans repeal the law, seniors will go back to paying more for their medicine, among the many other drastic punishments American families will face. Whether older voters will be aware of this, and whether they might base their votes accordingly, remains unclear.

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