Medicare “Doughnut Hole” Causes Seniors to Skip Diabetes Meds

Release Date: January 7, 2010 | By Katherine Kahn, Contributing Writer
Research Source:

Medicare recipients with diabetes who have a gap in their Part D prescription drug benefits—known as the “doughnut hole” — have higher out-of-pocket drug costs and are less likely to stick to their medications than those who have supplemental drug benefits, a new study confirms. Surprisingly, generic-only drug plans to cover the gap only modestly improve the situation.

The study, by Vicki Fung, Ph.D. and colleagues from Kaiser Permanente and the David Geffen School of Medicine at UCLA, appears online in the journal Health Services Research.

In 2006, the Medicare Part D program expanded prescription drug benefits to millions of beneficiaries. Part D prescription drug coverage for 2006 included up to $2,250 in total drug costs — what the patient and plan had both paid —after which point, beneficiaries entered the doughnut hole, where Medicare paid nothing toward drug costs, until the beneficiary reached $3,600 in total annual out-of-pocket drug expenses.

“The [doughnut hole] is intended to encourage patients to use drugs more judiciously and save money,” Fung said. “But it may also create financial barriers to using necessary medications.”

Diabetes treatment typically requires multiple medications. Beneficiaries with diabetes are likely to reach the doughnut hole sooner than are those who do not have chronic diseases.

The researchers looked at the effect of Part D coverage gap on drug costs and medication adherence — whether beneficiaries filled their prescriptions at least 80 percent of the time — in two large health systems that offered Medicare Part D plans.

“We found that having a gap was associated with lower total drug spending among diabetes patients compared with having no gap,” Fung said. “However, at least some of these cost savings were due to beneficiaries reducing their use of chronic medications, which may result in worse health outcomes.”

The study also found that beneficiaries with a gap had much higher out-of-pocket drug costs while in the gap compared to beneficiaries with gap coverage.

When comparing plans that offered generic-only medication coverage and plans with a gap, researchers found only slightly lower out-of-pocket spending in the group with generic-only drug coverage and no differences in medication adherence.

“We were surprised to find that both groups appeared to reduce the use of chronic medications by a similar amount after reaching the gap,” Fung said.

Bruce Stuart, Ph.D., executive director of the Peter Lamy Center for Drug Therapy and Aging in Baltimore, has one explanation: in 2006, Wal-Mart introduced 30-day supplies of generic drugs for $4. “The co-payment for generic drugs is $8.50 to $10 for the group with generic-only gap coverage. This is just too big a difference in cost. The Medicare generic drug benefit isn’t worth anything for many people,” he said. In addition, Stuart said the study might actually have underestimated the effects of the gap on beneficiaries.

Part D has undoubtedly improved coverage for millions of elderly and disabled Americans, Fung said. However, she cautions, “As with any new program, it is important to be vigilant for intended and unintended effects.”

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Reach the Health Behavior News Service, part of the Center for Advancing Health, at (202) 387-2829 or

Fung V, et al. Falling into the coverage gap: Part D drug costs and adherence for Medicare Advantage Prescription Drug Plan beneficiaries with diabetes. Health Services Research online, 2010.

Health Services Research is the official journal of the AcademyHealth and is published by John Wiley & Sons, Inc. on behalf of the Health Research and Educational Trust. For information, contact Jennifer Shaw, HSR Business Manager at (312) 422-2646 or HSR is available online at

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Lisa Esposito, HBNS Editor says
January 1, 1900 at 12:00 AM

Ms. Davis: I forwarded your question to an outside expert on insurance issues. She suggested you call the Medicare Rights Center. Their hotline number is 1-800-333-4114.

robin says
January 7, 2010 at 12:50 PM

Great article. People need to know that if they are in the doughnut hole or not insured, there is a site out there to help them. Education and awareness to what exists is the key.

Ruby Davis says
July 12, 2010 at 3:16 PM

I am a 74 year old diabetic. I have reached the doughnut hole in my insurance. One of my diabetic medications is $186.+ a month, the other is $107.85. The one that is $107.85 is the sliding scale medication so it lasts longer than a month. However, I have another non-geneic drug prescription that is $104.37 per month. There is no possible way on earth for me to pay for these 3 meds except to borrow the money each time I run out. I have several generic medications but I don't worry about them as much. I have my doctor to give me generics whenever he can. I can't get help for the 3 brand named medications because they say that one of the criterias is 'no insurance'. How does people in my situation get any help? If I can't get any help, then I have no other choice than to stop taking them altogether. Can you give me any info regarding this problem? Thank you.