Contrary to what many seniors believe, the $2,700 isn’t based on out-of-pocket expenditures, but [...]]]> We’ve written here frequently about the “doughnut hole” in Medicare Part D. This is a coverage gap that, in 2009, requires seniors to begin paying full price for their prescription drugs if they exceed $2,700 in total drug costs.

Contrary to what many seniors believe, the $2,700 isn’t based on out-of-pocket expenditures, but the total cost of their drugs, including the covered portion. So a senior will typically pay less than $1,000 out of pocket before hitting the coverage gap.

And here’s where the doughnut hole becomes a chasm. Coverage doesn’t kick in again until the senior has paid a whopping $4,350 out of pocket.

About a quarter of Medicare Part D enrollees — more than six million seniors — fell into the doughnut hole in 2008.

Now a new study says that many Medicare recipients are choosing not to take their prescription medications once they hit the gap. According to researchers at the University of Pittsburgh Graduate School of Public Health, seniors reduced their monthly prescription drug purchases by 14 percent when their coverage went away.

Doctors fear that patients with chronic conditions such as diabetes and hypertension are putting their health at risk by not taking needed medications.

Clearly, something needs to be done. Unfortunately, the Medicare Part D plan is so expensive — because the legislation that created it was basically drafted by the pharmaceutical industry — that simply throwing more money at the program is not the best solution. What needs to be done first is to pass legislation allowing Medicare to negotiate drug prices with Big Pharma (just as the Veterans Administration does). That would reduce the government’s costs sufficiently to close the coverage gap altogether.

You can read a helpful primer on the doughnut hole, featuring 2009 numbers, here.