AARP: Reform should end 'doughnut hole'

WASHINGTON, March 22 (UPI) -- AARP officials applaud House passage of healthcare reform legislation, saying it ends the Medicare drug benefit "doughnut hole."

"We applaud the House for passing this critical legislation to make our healthcare system work for more Americans," A. Barry Rand, the chief executive officer of the AARP, said in a statement. "Both chambers have now passed a bill that will make healthcare more affordable for American families, strictly limit insurance companies from denying affordable coverage because of age or medical history, and protect and strengthen the benefits promised to people in Medicare. But the job is not finished."

The legislation closes the gap in Medicare drug coverage known as the doughnut hole, Rand said.

"For too long, seniors in Medicare have struggled with the rising cost of prescription drugs," he said.

As part of Medicare Part D, the first $295 of medications is paid by the beneficiary and for the next $2,700, beneficiaries pay 25 percent and Medicare pays 75 percent.

For 2010, the doughnut hole for the total true out-of-pocket expenses increased to $4,550 before catastrophic coverage begins. Once drug costs reach $4,350.25, Medicare pays 95 percent of the cost and the beneficiary pays 5 percent.

"For too long, seniors in Medicare have struggled with the rising cost of prescription drugs," Rand said.

"We look forward to working with the Senate in the coming days to finish this truly historic task," he said.