The Donut Hole -- Can we affort to fill it as part of health reform?

One of the most hotly debated issues being considered by the Senate Finance Committee relates to efforts to close the Part D "Donut Hole" coverage gap as part of health reform. The senior lobby is urging lawmakers to go further than the narrowing of the donut hole that has been proposed based on savings from PhRMA. This week Senator Bill Nelson's (D-FL) amendment to fill the donut hole failed 10-13 with three Democrats, including Senate Finance Chair Max Baucus (MT), joining the GOP members in opposing the measure. Nelson's amendment would have required an additional health reform contribution from drug companies beyond the $80 billion deal that Baucus and the White House reached over the summer.

Despite it's failure, we expect to see this as a key issue when legislation comes to the full Senate floor. We may see seniors weigh in heavily on this issue but the concern is of course the cost of this change and even whether we need to expand a program that has high marks overall from beneficiaries.

While many want to close the donut hole eventually, including President Obama, the question is how to balance cost considerations to fund such a change. Before asking for a final vote Baucus also said he supports closing the gap, but said staff needed time to find a “more appropriate way” to do so in terms of offsets. There is concern that dramatic changes could lead to premium increases that would negatively impact all seniors which is difficult to project or estimate.

The "Donut Hole Debate" has likely only just begun as efforts to bring senior on board with health reform overall. For many seniors, particularly those with chronic disease, the donut hole creates significant patient access issues each year so this is a sensitive topic for many interested parties.