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Medicare donut hole: Fewer enrollees, more spending in 2016


More than 5 million Medicare part D enrollees without low-income subsidies reached the coverage gap known as the “donut hole” in 2016, spending almost $1,600 out of pocket as a result, according to the Kaiser Family Foundation.

Medicare part D enrollees who reached the coverage gap

Those 5.2 million enrollees in 2016 represented a reversal from the rising number of those reaching the coverage-gap over the last 3 years and the potential start of a trend toward increasing out-of-pocket costs. The number of part D enrollees without low-income subsidies (the coverage gap does not apply to those who receive the subsidies) had risen from 2013 to 2015 after being fairly stable from 2007 to 2012. The average out-of-pocket cost for enrollees with low-income subsidies, on the other hand, dropped by 20% in 2011 – from $1,858 to $1,485 – with a smaller drop in 2013 before two consecutive years of increases in 2015 and 2016, Kaiser reported.

“As of 2019, there will no longer be a coverage gap for brand-name drugs, as a result of changes in the” Bipartisan Budget Act of 2018, which reduced enrollees’ share of costs and increased the manufacturer discount, Kaiser explained, but a proposal from the Trump administration “to exclude the manufacturer discount from the calculation of out-of-pocket spending would substantially increase part D enrollees’ out-of-pocket costs and would lead to fewer enrollees qualifying for catastrophic coverage.”

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