The infamous "doughnut hole" gap in Medicare prescription coverage -- which requires beneficiaries to pay 100 percent of medication costs after they've used up their initial coverage but haven't yet hit a "catastrophic" level -- is closing under the new health care reform law.

That's the good news.

The not-so-good news: Although there is some immediate relief, it will be a decade before the hole closes for good.

Under the new law, seniors will receive a one-time $250 rebate when they reach the doughnut hole level this year. In 2011 brand-name drugs will be discounted 50 percent during the doughnut hole period, and in 2013 there is a provision for an additional federal subsidy of 25 percent on brand-name drugs.

But with drug costs going up between 8 percent and 10 percent annually, the benefit loses some of its punch for those on Medicare now, which includes nearly 400,000 Pennsylvanians.

"It's not unusual that brand-name drugs at full price often exceed $100 and potentially exceed $200," said William McKendree, lead counselor for Apprise, a state-sponsored program that provides free health insurance counseling for Medicare recipients.

"The [$250 rebate] provision may provide some relief. But for individuals taking multiple prescriptions or individuals taking one expensive prescription drug, it will not mean total relief," he said.

The years beyond 2010 still hold uncertainty, too, such as how the 50 percent discount on brand-name drugs and 2013 federal subsidy will be implemented. The gap is not scheduled to entirely close for 10 years.

But this is a start, Mr. McKendree said.

"We have programs in place that didn't exist before. This is at least a step to reduce the 100 percent cost people had to pay during the coverage gap."

When Medicare's Part D prescription plan launched in 2003, legislators included the doughnut hole to keep the program's cost in check. Seniors have coverage until they reach a certain dollar limit, then -- unless their plan offers additional coverage -- they pay all of their medication costs until they reach a "catastrophic amount," at which point near-full coverage resumes.

In 2010, Part D covers the first $2,830 in prescription drug costs, then beneficiaries pay the next $3,610 before coverage kicks in again.

The $2,830 represents the total cost of the medication, not just the amount the Medicare beneficiary pays, a distinction that can catch seniors by surprise, Mr. McKendree said.

Without reform, congressional estimates projected the gap that seniors must cover would have risen from $3,610 this year to $6,000 by 2019.

Although Medicare recipients are notified throughout the year how close they are getting to the doughnut hole limit, many do not realize they're over until they are at the pharmacy counter. In a panic, they'll call agencies such as Apprise for help.

"It's probably one of the hardest calls we'll do, because we're dealing with individuals who are afraid they will not be able to maintain the medication that will maintain their [lives]," Mr. McKendree said.

A 2008 Kaiser Family Foundation study found 15 percent of seniors simply stopped taking their medications once they reached the doughnut hole limit, at least temporarily.

When people call Apprise (412-661-1438), Mr. McKendree said one of the first steps the organization takes is to determine if the caller qualifies for one of three programs to help low-income seniors afford medications: the state-run PACE and PACENet programs or the Extra Help program, funded by the federal Social Security Administration (1-800-772-1213). Each has different income eligibility criteria.

Mr. McKendree said 390,000 Pennsylvanians risk falling into the doughnut hole this year. If they can afford it, many will then pay for the medication themselves until they make it to the other side when catastrophic coverage kicks in. That can be a pretty daunting "if," Mr. McKendree said.

"The truth is that many people never get to the catastrophic coverage because they find it impossible to pay 100 percent of the prescription costs once they hit the doughnut hole."

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