Overhaul helps some with Medicare, but many still struggle

More than 4,100 Medicare recipients in South Hampton Roads saved an average of $545 on prescription drugs in the first eight months of 2011 under the new health law, according to the U.S. Department of Health and Human Services.

But even with the law's new discounts, local seniors said medicines continued to eat up too much of their budgets.

"My drug bill to me personally is $2,000 or $3,000 a year," said Jackie Stalls, a retired health care consultant from Virginia Beach. "I don't know why I have to pay all this out when I've got insurance."

Medication costs are on the minds of Medicare recipients these days, a little more than a week into the enrollment period for next year's prescription drug plans.

Medicare has offered outpatient drug coverage since 2006 through private plans approved by the federal government.

As with most insurance programs, an individual in one of the standard benefit plans is responsible for monthly premiums and all costs up to a deductible. After that, Medicare pays 75 percent of drug costs up to a limit - just under $3,000. The limit includes spending by both Medicare and the recipient, excluding premiums.

Recipients then enter a coverage gap - what's also known as the "doughnut hole." Before this year, they were responsible for paying 100 percent of the costs of their drugs in the doughnut hole. This year, the new law began discounting drug costs in the gap.

Recipients exit the doughnut hole after spending a certain amount - $4,700 in 2012 - out-of-pocket. Medicare's catastrophic coverage then pays about 95 percent of drug costs.

The doughnut hole claimed about one in eight of the 27 million people enrolled in Medicare drug plans in 2009, according to a recent study by the Kaiser Family Foundation.

Those who reached the gap but not catastrophic coverage spent an average of $3,790 on drugs, not including plan premiums - more than five times as much as those who didn't reach the gap. Plan users whose spending passed through the doughnut hole spent an average of $10,246 a year.

Patients over 84 were more likely to reach the doughnut hole, as were those taking medications for breast cancer, diabetes or Alzheimer's disease, according to the Kaiser study.

Faced with higher drug expenses in the coverage gap, some seniors have admitted to making risky choices, such as skipping doses, switching drugs or not filling prescriptions.

The national health law would close the doughnut hole by 2020.

The first relief came last year, when people who reached the gap received $250 rebate checks. This year, Medicare recipients in the doughnut hole received a 50 percent discount on name-brand drugs and 7 percent off on generics.

In 2012, the discount will remain the same for name-brand drugs, but it will increase to 14 percent for generics.

In the past, some Medicare Part D prescription drug plans have offered coverage for people in the doughnut hole. Next year, most won't offer coverage in the gap beyond the health law's requirements, according to a different Kaiser study.

The average premium is expected to grow by 1.7 percent across plans offered in Virginia, the study found.

Analysts are watching to see whether pharmaceutical companies raise drug prices, said Juliette Cubanski, associate director of Medicare policy for the Kaiser Family Foundation.

"If the price goes up and it's twice as expensive, then really how much better off are you because you've gotten a 50 percent discount?" she said.

Nationwide, the doughnut hole discounts saved people $930 million in the first eight months of 2011, according to the federal health department. In South Hampton Roads, those savings added up to $2.2 million for the 4,115 people who fell into the coverage gap before Sept. 1.

Yet more seniors are seeking help to pay for drugs, said Erin Moaratty, a spokeswoman for the Patient Advocate Foundation, a Hampton-based nonprofit.

Even with reductions, drug costs in the doughnut hole are difficult for Medicare beneficiaries to afford, particularly in a down economy, she said.

The discounts have made a difference for some local seniors, said Jim Hutchinson, a supervisor with Senior Services of Southeastern Virginia. But when a $600 monthly bill is trimmed to $300 a year later, it doesn't always feel like savings, he said.

"To sit here and tell a person they have to pay $3,000 for their prescription drugs is still heartbreaking," Hutchinson said. "But the year before that, I had to tell them they were paying $5,000 or $6,000. So it is coming down, but it's still a struggle for some people. Even people who have relatively good retirement, that kind of money can eat up your monthly retirement check."

Lona Liosatos reached the coverage gap for the first time last month. She's not sure what was different this year. "I'm not very happy about it," she said.

Her bill for a 90-day supply of three medications for asthma and high blood pressure grew to $597 from $225 in the doughnut hole. That's not counting the osteoporosis medicine Liosatos has received as samples from her doctor or the vitamin D and acid reflux medication she buys over the counter.

To trim costs, the 74-year-old Virginia Beach resident said she plans to try filling a prescription for a generic high blood pressure medicine at Walmart. She also may use some leftover pills she stockpiled last year.

"If I have to pay that, I'll pay it," said Liosatos, a former hairdresser, "because I've been in pretty good health since I take my medicines the way I'm supposed to."

Bud Blumenthal tried to save some money last year. Instead of refilling his prescriptions while he was in the gap, the 76-year-old Norfolk resident waited for 2011.

But spending that money early in the year - along with the addition of an expensive new diabetes medicine - led him to the doughnut hole three months sooner. The cost of a 90-day supply of his seven medications jumped to $690 from $220.

"Affordable, yes," said Blumenthal, a former mortgage company owner. "It's just not pleasant."

Stalls, the retired health care consultant from Virginia Beach, isn't sure she'll be able to keep paying thousands of dollars for her drugs despite receiving help on other expenses from her daughter, with whom she lives.

Since reaching the doughnut hole in early spring, Stalls has tried several strategies to conserve her 10 to 15 medicines.

She took her reflux medication every other day, but that lasted less than a week because she couldn't sleep at night. She stopped her arthritis medicine for a couple of weeks, but her joint problems returned with a vengeance.

"I'm back on everything because I'm just defeating my purpose of keeping going," she said.

Still, Stalls is optimistic about 2012. A counselor helped her select a drug plan she finds promising, with a bill starting at $128 a month.

"When she said, '$128,' I'm like 'Lord have mercy,' " Stalls, 81, said. "It looks hopeful anyway."

Amy Jeter, (757) 446-2730, amy.jeter@pilotonline.com