New Help for Seniors Who Fall Into the Median Donut Hole: 50% Discount Starts in 2011

By Kathleen Sebelius, Secretary of Health and Human Services
Posted September 23, 2010

The Affordable Care Act has started to close the Medicare “donut hole”, a coverage gap in Medicare’s prescription drug program, by issuing $250 rebate checks to people who fell into it in 2010. Today, on a phone call with seniors, Vice President Biden and I are announcing another important step forward.

Starting in 2011, people with Medicare will receive a 50% discount on covered brand-name drugs they need while in the donut hole, and will start to pay less and less for generic drugs. My Department has signed agreements with many of the nation’s pharmaceutical manufacturers to provide discounts on the cost of covered brand name prescription drugs for people with Medicare.

The “Donut Hole” is the coverage gap that people with Medicare hit after a certain amount is spent on their drugs, presents serious financial challenges---making some people choose between their rent and groceries or their medicine.

Today’s announcement about the 50% discount will make a huge difference in the wallets of people who find themselves in the donut hole.

More than 1.2 million people with Medicare who have hit the donut hole so far this year have received the rebate checks, and now, with the new agreements from the nation’s drug manufacturers, they will see even more savings off their drug costs next year. These savings will continue even after the coverage gap is closed in 2020. 

And, through the use of the new tools provided by the Affordable Care Act, prescription drug plan Part D premiums are stable and the number of prescription drug plans that voluntarily fill the donut hole has increased.  In August, we reported that the average 2011 Medicare prescription drug plan premium will remain similar to rates being paid this year – an increase of $1.

What this all adds up to is a good deal for people with Medicare and a good deal for all taxpayers – a stronger, more efficient Medicare program that ensures that people with Medicare get the prescription drugs they need.