Since Congress added a prescription drug coverage benefit to the federal Medicare program beginning two years ago, seniors have been confronted with confusing choices and uncertain outcomes. One of the most troubling aspects of the drug program is the often-criticized "doughnut hole" in the coverage. After total drug-related expenditures reach about $2,400 in a given calendar year the beneficiary suddenly has no coverage at all for the next $3,051 in drug costs. Coverage returns after the beneficiary reaches the second threshold level.

This oddly-structured program has been confusing to seniors, those with disabilities and their family members and advisers. Now a study from the Kaiser Family Foundation quantifies just how many Medicare participants are actually affected by Congress’ doughnut hole arrangement.

According to the study, about 26% of those Medicare beneficiaries who pay for their Part D coverage reached the doughnut hole in 2007, and about 4% emerged on the other side. That means that about 3.4 million patients reached the point where they paid all of their prescription drug costs for a time.

The study also considered the differences among patients by illness, state and region, gender and a number of other factors. The results are at least mildly provocative. For instance, Hawaiians reached the doughnut hole at about three times the rate of Nevadans (36% vs. 12%). Arizona was the second-lowest state, incidentally, with "only" 19% of its residents reaching the coverage gap. There was a modest difference between men and women, but an unsurprisingly clear gap by age: while only 17% of those under 65 reached the coverage gap, over 32% of those over 86 did so.

Which medical conditions are most likely to get a patient’s drug costs high enough to reach the doughnut hole? The "winner" is treatment for dementia. 64% of those taking drugs for Alzheimer’s (such as Aricept) reached the first threshold, and 15% paid enough to get through the doughnut hole to catastrophic coverage. Compare patients taking ACE inhibitors (like Lisinopril) for hypertension; 35% of those patients reached the doughnut hole and only 5% spent enough to obtain catastrophic coverage. Over half of patients treated with oral anti-diabetics (Fosamax, for example) and proton pump inhibitors (Prilosec, Nexium and others) reached the coverage gap.

And what do patients do when they reach the doughnut hole? According to the study about 15% stop taking their prescribed medications, a very small number (about 1%) simply reduce their dosages, and another 5% switch to another, presumably less expensive, medication. That leaves about 80% of those without coverage paying the full cost of their prescriptions without help from Medicare or their Plan.

The study’s authors freely acknowledge some of its limitations. It does not include Medicare patients covered by Medicaid plans, or those who took no medications. It fails to distinguish expenditures for "off-formulary" prescriptions -- that is, those which the Medicare beneficiary may have purchased without going through the Part D plan. Still, it provides a general picture of the real world of Medicare Part D coverage.

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