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Closing Medicare drug coverage gap saves seniors $6 billion

NEWS IN BRIEF — Posted April 8, 2013

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The health system reform law has made prescription drugs more affordable for more than 6 million Medicare beneficiaries by closing part of the “doughnut hole” coverage gap, according to the Dept. of Health and Human Services.

“By making prescription drugs more affordable, the Affordable Care Act is improving and promoting the best care for people with Medicare,” HHS Secretary Kathleen Sebelius said in a statement. In HHS’ estimation, the law has saved beneficiaries $6.1 billion in drug costs.

The doughnut hole refers to the gap in the Medicare prescription drug benefit between the expiration of initial coverage and the start of catastrophic coverage, during which beneficiaries must pay the full cost of their medications out of pocket. Under the ACA, those that reach this gap can receive drug discounts until they reach the catastrophic coverage threshold.

According to HHS, the ACA provided those that reached this gap in 2010 with “a one-time $250 check, then began phasing in discounts and coverage for brand-name and generic prescription drugs beginning in 2011. The law will provide additional savings each year until the coverage gap is closed in 2020.”

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