Donation
We hope you all had a wonderful holiday season as we begin a New Year and a new quarter century. By the end of this quarter century, it is projected that we will have more people in the United States over 65 (22%) than under 18 (20%). Obviously, services and benefits for this segment of the population will continue to be a priority for those of us who advocate for a quality of life and healthy aging for older adults.
We are starting this year with a very significant shift in Medicare benefits. For years, we have heard about the "donut hole" or coverage gap in Medicare Part D payment for prescriptions. Starting on January 1st, 2025, a provision in the Inflation Reduction Act eliminates the donut hole coverage gap and limits out-of-pocket prescription costs to people enrolled in Medicare Part D to $2,000 per year. This will result in tremendous cost savings for some of our most vulnerable older adults.
Historically, Medicare Part D was legislated through the Medicare Modernization Act of 2003 and enacted in 2006. Participants in Medicare Part A or B could sign up for this benefit at an additional monthly cost and receive their prescription drugs at a subsidized rate. There was a coverage gap built in called the "donut hole." This gap in coverage occurred annually after a certain amount of prescription expenses were paid at a subsidized rate. Once a person reached the gap, they paid 100% for all prescriptions up to a certain cap. When that was reached, the plan would again cover prescriptions at a reduced rate for the remainder of the year. The Affordable Care Act of 2010 included a gradual "closing" of the donut hole. But "closing" did not mean that people reaching the donut hole didn't pay anything for their drugs—it meant that plans and pharmaceutical companies picked up more of the tab. But, in fact, by 2020, people were paying more out-of-pocket than ever before, and the gap seemed to become bigger. When a person entered the donut hole, they would be responsible for paying 25% of the costs of their medications. Once they reached a certain threshold of spending, for example, $8,000 in 2024, they entered the catastrophic coverage period and would pay 5% of the cost for each prescription. Some people ended up paying more than $10,000 per year for their prescriptions.
The $2,000 cap per year for filling prescriptions is transformational. Money that had been spent on prescriptions by many of our vulnerable older adults can now be used for food, housing, or even taking medicines as prescribed rather than cutting back on them because they could not afford them.
Over the next quarter century, we hope to see many more reforms that will make healthcare more accessible and more age-friendly communities so that people can age with dignity and respect at their highest potential for health.
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