WASHINGTON – WASHINGTON (AP) — Government checks to seniors with high prescription drug bills are going out early, Obama administration officials said Thursday, plugging the advantages of the new health care overhaul law.
The $250 checks for Medicare recipients who fall into the prescription drug coverage gap are a new benefit this year, a modest down payment on gradually closing the "doughnut hole" over the next decade. Seniors who fall into the gap are responsible for $3,610 in drug costs in 2010 before their Medicare coverage kicks in again.
Health and Human Services spokeswoman Jessica Santillo said the rebates are going out ahead of the June 15 deadline set in the law. Some 4 million seniors and disabled people will get checks this year. The first monthly batch of 80,000 will be mailed out June 10.
Significant savings will come next year, when the law provides a 50 percent discount on brand name drugs for seniors in the gap, and a smaller discount on generics. Those discounts gradually increase year-by-year until 2020, when the coverage gap will be fully phased out.
Margery Traynor, a retired auto worker from Springfield, Ohio, said the $250 will barely make a dent in her prescription bills. Traynor, 81, who suffers from lung problems, is paying more than $450 a month for three pricey brand-name drugs, including inhalers that help her breathe. And that doesn't count the cost of nine other medications she takes.
Traynor fell into the doughnut hole for the first time this year, after General Motors cut back its retiree medical coverage and she had to fend for herself on Medicare. "I was shocked," she said. "I had no idea what medicine cost. The most I paid under the GM plan was $25 a month."
Seniors don't have to apply for the new benefit, since their eligibility will be automatically determined by their Medicare prescription drug plan and the government. HHS Secretary Kathleen Sebelius warned that scam artists are already taking advantage of rebate program to circulate bogus 'application forms' that solicit personal information such as Medicare numbers.
"If anybody shows up asking for information ... report it immediately," Sebelius said. "Nothing is required in order to get the check."
The Medicare coverage gap came about because of funding constraints, when in 2003 a Republican-led Congress created the prescription benefit under President George W. Bush's administration.
At the time, lawmakers wanted to make sure all seniors got some support, so the program was designed to cover three-fourths of the first couple of thousand dollars in drug costs for all beneficiaries. Congress also built in a generous benefit for those with catastrophic expenses, with Medicare paying 95 percent.
But people in the middle were left on their own — a sore point with seniors and advocacy groups.
When Congress took up President Barack Obama's health care overhaul last year, it was unclear if lawmakers would close the coverage gap. Democrats in the House wanted to do so, but their Senate counterparts were only prepared to go some of the way. Democratic leaders in both chambers finally made it a priority, partly in response to seniors' concerns about using Medicare cuts to fund coverage for uninsured workers and their families.
Traynor said it will be nice to get her $250 check, but she's concerned the health care legislation is too expensive and will make it harder for the nation to get out of debt.