Fact Sheets

3.6 MILLION IN MEDICARE SAVED MORE THAN $2.1 BILLION ON PRESCRIPTION DRUGS IN THE DONUT HOLE IN 2011

The Affordable Care Act includes benefits to make your Medicare prescription drug coverage (Part D) more affordable.   When the Part D program was created, there was a gap in coverage, where most beneficiaries would pay 100 percent of their drug costs while still paying their premiums.  This gap – which occurs after the plan pays a certain amount, but before beneficiaries hit catastrophic coverage and they only are responsible for a small percent of their drug costs, usually around 5 percent – is called the “donut hole.”

The Affordable Care Act is closing the donut hole over time, and has already saved seniors and people with disabilities over $3 billion on prescription drugs since the law was enacted in March 2010.  In 2011, seniors and people with disabilities who reached the coverage gap in Medicare Part D coverage automatically received a 50% discount on covered brand-name drugs and a 7% discount on generic drugs.  These discounts will continue to grow over time until the donut hole is closed. To receive the discount, no special action is required. Seniors simply purchase drugs at the pharmacy and receive the discount automatically.

In 2011, about 3.6 million Medicare beneficiaries benefited from discounts on prescription drugs in the donut hole coverage gap.  These seniors and people with disabilities received more than $2.1 billion in discounts, or an average of $604 per beneficiary.

Women who hit the donut hole benefitted from this provision in the Affordable Care Act, with 2.05 million women saving a total of $1.2 billion on their prescription drugs.  Beneficiaries also received a 7 percent savings on generic drugs in the donut hole in 2011, with 2,814,646 beneficiaries receiving $32.1 million in savings on generic drugs.

The HHS Assistant Secretary for Planning and Evaluation released a brief today projecting that the average Medicare beneficiary will save approximately $4,200 from 2011 to 2021, while those with high prescription drug spending will save much more – nearly $16,000 over the same period.  These findings, along with the data from 2011, show that while all individuals will benefit from lower costs thanks to the Affordable Care Act, those with high drug costs are seeing considerable savings which will continue to grow.

In 2011, seniors and people with disabilities saved money on a wide variety of drugs, including:

• Blood sugar lowering drugs- $300,259,057
• Triglyceride and Cholesterol lowering drugs- $263,182,711
• Asthma and Other Lung Related (non-cancer) Disease drugs- $228,522,896
• Drugs used to lower Blood pressure - $120,214,657
• Psychiatric drugs- $101,511,953
• Drugs Used to Prevent Platelets from Clotting Blood - $195,230,876
• Anti-dementia drugs- $108,868,359
• Anti-depression drugs- $72,917,239
• Cancer drugs- $71,854,747
• Drugs Used to Treat Ulcers- $70,007,664
• All Other Drug Therapeutic Uses- $626,822,848

Most of these drugs are for chronic conditions, suggesting that the discounts are helping people pay for expensive medications that they must take on an ongoing basis.  Making such prescriptions more affordable also helps prevent more costly care that often results from conditions like high blood pressure and cholesterol.  About 13 percent of the savings were for drugs to help manage mental illness which also helps keep beneficiaries active and living at home.

Last year’s progress builds on the savings in 2010, when nearly 4 million beneficiaries who hit the donut hole received a $250 rebate under the Affordable Care Act to help them afford prescription drugs in the coverage gap.

Seniors and people with disabilities will receive additional savings on covered brand-name and generic drugs while in the coverage gap until the gap is closed in 2020. See the schedule below for information on what Part D beneficiaries will pay for drugs while in the coverage gap:

• 2012: Medicare Part D beneficiaries will save 50% on brand-name drugs and 14% on generic drugs
• 2013: Medicare Part D beneficiaries will save 52.5% on brand-names and 21% on generics
• 2014: Medicare Part D beneficiaries will save 52.5% on brand-names and 28% on generics
• 2015: Medicare Part D beneficiaries will save 55% on brand-names and 35% on generics
• 2016: Medicare Part D beneficiaries will save 55% on brand-names and 42% on generics
• 2017: Medicare Part D beneficiaries will save 60% on brand-names and 49% on generics
• 2018: Medicare Part D beneficiaries will save 65% on brand-names and 56% on generics
• 2019: Medicare Part D beneficiaries will save 70% on brand-names and 63% on generics
• 2020: Medicare Part D beneficiaries will save 75% on brand-names and 75% on generics

STATE-BY-STATE – DISCOUNTS IN THE DONUT HOLE

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