Politicians may escape the wrath of "doughnut hole" seniors

Two things are happening in American politics this month: Campaigns for the midterm elections are beginning to wrap up, and many elderly voters are hitting the "doughnut hole." They don't like being in the doughnut hole, but whether they'll take it out on their nearest congressperson remains to be seen.

This is a classic glass-half-empty story and a warning to politicians in love with complicated "consumer-driven" social programs — Keep it Simple, Stupid.

A refresher for we who usually define "doughnut hole" as the void in a ring-shaped carbohydrate unit: To older Americans on Medicare, the doughnut hole is the gap in their prescription-drug benefit. Once their drug purchases in a given year reach $2,250, the next $2,850 is entirely on them.

Medicare doesn't come back into the picture until drug spending passes $5,100. Then it pays for 95 percent of all prescription drug costs.

Many beneficiaries are not happy with the setup, as expressed in this fairly typical message sent to me from a woman in Indiana: "I used to obtain my drugs from Canada until this darn Medicare drug program went into effect. Now I'm in the 'doughnut hole' and paying full price for all my meds. I'm on eight of them!! This whole program is such a rip-off. What can we do????"

Now some Republican lawmakers might shake their heads at the ingratitude of it all. They had created a significant subsidy where none before existed. But that's not what a lot of beneficiaries see. They see their benefit being taken away at the $2,250 mark — and while they're still paying monthly premiums to the private insurer managing their drug plan.

Expected to cost more than $1.2 trillion (with a "t") over its first decade, the Medicare drug benefit is a humongous taxpayer burden. But it would be heavier still were it not for the doughnut hole.

The problem is that many older Americans are not engaged in these calculations. "Seniors are still paying monthly premiums and not getting anything," said Drew Altman, president of the Kaiser Family Foundation. "This all makes sense to policymakers in Washington, but seniors don't live in a world of budget tradeoffs in Congress."

In a survey last spring, Kaiser found that 30 percent of beneficiaries did not know whether their drug plan had a doughnut hole (not all do) or refused to answer the question. Another 36 percent thought that their plan was gap-free (and many were no doubt misinformed).

Now how will this affect Election 2006? Probably not much. "Democrats thought they had a giant club," Altman said, especially in the early chaotic days of the program's launch. But Kaiser's extensive tracking polls show that the great majority of older Americans are content with the benefit. Meanwhile, other issues — such as the Iraq war, terrorism and immigration — have seized more of their attention.

As an election-year issue, Altman says, "the doughnut hole is basically a wash." But not everywhere.

It remains a significant complaint in areas heavy with retirees. In South Florida, for example, two congressmen — Republican Clay Shaw and Democrat Robert Wexler — are duking it out over the doughnut hole.

Several Democrats are pushing a bill that would let the government negotiate with drug companies for lower prices and use the savings to close the doughnut hole. The proposal makes a lot of sense, but the drug makers who basically paid lawmakers to forbid any such negotiations obviously don't want to go there.

The maxim that a camel is a horse made in committee surely applies to the Medicare drug benefit. But while the doughnut hole is quite a hump, it does not appear to be a major worry this year for most politicians.

Providence Journal columnist Froma Harrop's column appears regularly on editorial pages of The Times. Her e-mail address is fharrop@projo.com