Senior Citizens Demand Affordable Drug Coverage on Donut Hole Day

SENIOR CITIZENS DEMAND AFFORDABLE DRUG COVERAGE ON DONUT HOLE DAY -- (Extensions of Remarks - September 25, 2006)

SPEECH OF
HON. JANICE D. SCHAKOWSKY
OF ILLINOIS
IN THE HOUSE OF REPRESENTATIVES
MONDAY, SEPTEMBER 25, 2006

* Ms. SCHAKOWSKY. Mr. Speaker, I rise in recognition of last Friday, September 22, ``Donut Hole'' Day. Donut Hole Day was not a happy day but a marker to remind policymakers about the problems that the Part D plan is imposing on America's seniors and people with disabilities this year.

* September 22 was the day when the average person with Medicare fell into the Part D donut hole--a black hole of coverage for those whose annual drug costs fall between $2,250 and $5,100. The donut hole is a $2,850 gap in coverage when people with private Part D plans continue to pay insurance premiums even though they receive no coverage. September 22 was also the day that senior citizens and persons with disabilities came together in events across the country to demand an affordable drug benefit in Medicare.

* Nearly 7 million senior citizens and people with disabilities are expected to enter the donut hole. A Kaiser Family Foundation study estimates that, of the people who will fall into the donut hole, 1.9 million (28 percent) have incomes less than 150 percent of poverty; 2.9 million (42 percent) are in fair or poor health; and 3.8 million (55 percent) are women.

* The donut hole is an unprecedented phenomenon. This type of coverage gap is not found in the Federal Employees Health Benefits plan or in any other private plan. It is an insurance mechanism especially crafted for people with Medicare.

* An analysis from an August report from the Center for Economic and Policy Research concludes that if Medicare had been allowed to negotiate drug prices in the same way as the Veterans Administration, the savings would have been more than enough to eliminate the donut hole gap in coverage. In fact, the close to $50 billion that could be saved in the first full year of the program is more than twice the size of the donut hole.

* The real winners in the Part D program are the drug and insurance companies. In a report released this week by the Committee on Government Reform Democratic staff shows that profits grew by over $8 billion (27 percent) for the ten largest pharmaceutical manufacturers in the first half of this year.

* The losers in the Part D program are people with Medicare. The prices charged by the top Part D plans in my Congressional District were 79 percent higher than the prices negotiated by the Federal government. A recent Merrill Lynch analysis found that in 2006 prices for popular brand-name drugs had increased by 8.6 percent over the last year, twice as fast as the overall information rate.

* The donut hole puts seniors and people disabilities' health at grave risk. A New England Journal of Medicine study found that seniors' behaviors change when faced with a prescription drug benefit cap after which they have to pay the full costs of their drugs--and the donut hole is a cap. The study found that found that seniors who confront a cap are more likely to skip doses of treatments, less likely to visit hospital emergency departments, and, sadly, sometimes more likely to die sooner. Their annual mortality rate was 22 percent higher than those without such a cap on benefits.

* Representatives MARION BERRY of Arkansas, TOM ALLEN of Maine and I introduced H.R. 752, the Prescription Drug Savings and Choice Act, which would take Medicare in a new direction by siding with senior citizens and people with disabilities--not the drug companies. This bill would give people with Medicare the choice of enrolling in a Medicare-administered drug benefit and we would force drug companies to lower their prices by requiring Medicare to negotiate for deep discounts. The savings could be used to fill the donut hole.

* Ms. Pauline Metzger-Aronson wrote to me earlier this year to tell me that she fell into the donut hole in June. She will pay a monthly premium for the rest of the year, although she will not receive any benefits because she will not climb out of the donut hole. She told me that the saying, ``As you amble through life, whatever be your goal: Keep your eye on the donut and not upon the hole'' had new meaning because ``some of us seniors have reached the point where the donut is gone and we are now forced to look into the hole.'' H.R. 752 would help Ms. Metzger-Aronson and many others. It is a step in the right direction which will put America's seniors and people with disabilities first. I urge my colleagues to support this important legislation.

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