The $80 billion deal announced this weekend between drug makers and Washington Democrats points to one of the odder features of the Medicare Part D Drug Benefit: The doughnut hole. Medicare mavens and readers of a certain age will already be familiar with the hole — the gap in coverage that leaves beneficiaries on the hook for the cost of prescription drugs when the cost of their prescription drugs passes $2,700 in a year. Coverage kicks back in when a beneficiary’s annual drug cost passes $6,154 in a year, according to the WSJ’s story on the deal . As we noted last year , one report found that a quarter of Medicare beneficiaries hit the doughnut hole — and among those who do,

about 15% stop taking their medicine. Under the new deal, with a projected value of $80 billion over 10 years, drug makers will pay half of the cost of prescription drugs while beneficiaries are in the doughnut hole. The Medicare drug benefit has helped drug sales, and this deal is the latest example of industry playing ball in Washington as the health-reform debate grinds on. Sen. Max Baucus and PhRMA put out statements on the deal over the weekend, and the head of the AARP will go to the White House today to endorse the deal along with President Obama. Photo by Salim Virji via Flickr

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Splitting the Medicare Drug Benefit’s Doughnut Hole