Romney's health care plan: Medicare 'donut hole'
August 29th, 2012
02:34 PM ET

Romney's health care plan: Medicare 'donut hole'

The Empowered Patient is a regular feature from CNN Senior Medical News Correspondent Elizabeth Cohen that helps put you in the driver's seat when it comes to health care.

This week during the Republican convention I’ll be putting Mitt Romney’s health care plan under the microscope, examining what it means to various groups of American patients.

Monday we dissected Romney's ideas to help Americans afford preventive care. Tuesday we looked at his plan for helping people with pre-existing conditions get insurance. Now, we'll examine Romney's plan for filling the Medicare donut hole.

The Medicare donut hole is a coverage gap for seniors who take prescription drugs. In 2009, prior to Obamacare, seniors received help from Medicare when they spent up to $896 on prescription drugs, after which they received no help and had to pay for prescription drugs 100% out of their own pockets. Then, after spending a total of $4,350 on prescriptions, government assistance kicked back in again. This gap when seniors had to pay for their drugs on their own is called the “donut hole.”

As of August 2012, seniors saved more than $4.1 billion because of this change, according to the U.S. Department of Health and Human Services.

The Affordable Care Act, also known as Obamacare, makes it so seniors will get discounts on drugs while they’re in the donut hole.

Romney has vowed to repeal Obamacare, which means the donut hole would re-open again and seniors would not receive the drug discounts.

Romney spokeswoman Andrea Saul said reversing the Affordable Care Act would help seniors in a way that is much bigger than the donut hole. She said Obamacare "cuts" $716 billion out of Medicare, and therefore threatens the entire Medicare program.

“The changes made by President Obama, most importantly the $716 billion in cuts that put the very viability of the program at risk, will be undone,” she wrote in an e-mail to CNN.

Whether Obamacare cuts $716 billion from Medicare has been hotly debated. Democrats call the $716 billion worth of changes "savings," not cuts. Whichever they are, two non-partisan fact-checking groups say the changes won’t have much of an impact on seniors.

The non-partisan group factcheck.org says Obamacare "doesn't take a dime out of the hospital insurance trust fund." The fund pays for services such as inpatient hospital care, skilled nursing facility care, home health care, and hospice care.

Politifact.com, another non-partisan group, agreed, saying, "Neither Obama nor his health care law literally cut funding from the Medicare program's budget."

Instead, the cuts (or savings) bring down future health care costs, "mainly aimed at insurance companies and hospitals, not beneficiaries," according to the organization.

Video: The Romney-Ryan plan and seniors

soundoff (72 Responses)
  1. New Orleans

    So how many years have we gone without universal health care under Republican Presidents, and NOW they all of a sudden have a plan that is better than Obama's?
    Why can't GWB's girls run for the Republican party, at least then there will be some consistency.

    August 29, 2012 at 14:51 | Report abuse | Reply
    • Fido

      Hmmm...you are still hung up on all Repubs are alike...and all Dems are alike. You now better. If all Dems were alie...we would have had universal healthcare 50 years ago.

      At least Romney has a background of providing healthcare to the masses...hence his plan in Mass. So Ii call this issue even between Obama and Romney.

      August 29, 2012 at 15:54 | Report abuse |
    • Fido

      I call the issue even between them....but...they have two very different perspectives. Today...I receive my Medicare via United Healthcare...less cost. Drugs are cheaper under United than they are via Medicare (as Medicare is not allowed to put meds out for bid). And there are about 20 insurance companies clamoring for my business. I would say the government's free enterprise experiment with private healthcare companies is quite successful.

      August 29, 2012 at 15:58 | Report abuse |
    • John Lawson Sr

      I have been on medicare since 05/05/05 due too being a life long Type 1 Diabetic and since I can no longer work these medicare donut Holes are killing me. I can afford my insulin too keep me a live and some times I have thought about stealing some so I can make the Commonwealth of kentucky take care of my medical needs. Then I think what this would do to my poor wife rhonda who does her best too take care of me and trys too make sure I'm going too be around for her a long time!

      It's sad, I am terminally ill and can't even get Medicaid here in Kentucky, because their Medicaid guide lines where set in place back in 1974!

      So if Mr. Romney and Mr. Ryan get in and they start messing over the Medicare system, I am a dead man by February 2013.
      I can't afford $215.00 a month for my insulin!

      Simply put, the only thing a Republican loves, is himself!

      August 29, 2012 at 16:06 | Report abuse |
  2. Timmy Suckle

    I kissed my way up to VP at a health insurance company. Now I take over $500,000 of your health care dollars for NO VALUE ADDED to your health care. And that’s just me. Now think about how many other VPs, Directors, Managers, etc. are at my company alone. Now multiply that by thousands of others at hundreds of other health insurance companies. From 10 to 25% of your health care dollars go towards administration that adds NO VALUE to your health care. But my company’s PAC dollars will continue to fool you little people into thinking that a single payer system will be bad. Little people like you are so easy to fool. Little people also don’t realize that a single payer system is the ONLY system that would allow little people (as an entire country) to negotiate better health care prices. Little people don’t realize that the Medical Cartels already know that. And that is the reason why the Medical Cartels spend so much PAC money from the hospitals and doctors lobbying against a single payer system. Some little people say that a single payer system would cost you little people more. But if that were true, then wouldn’t the hospitals and doctors WANT that extra money? Yes they would. So why do the Medical Cartels lobby against a single payer system? It’s because the Medical Cartels know it would allow little people to negotiate better health care prices. And that’s what the Medical Cartels are afraid of. Period.
    But us big wigs at insurance companies, hospitals, and pharmacy companies don’t ever need to worry about health care no matter what it costs. We get our health care paid for one way or another by you little people. And we get the little people that work at our companies to contribute to our PACs. And us big wigs say it’s to protect the little peoples’ jobs. But in reality it would be in the little peoples’ best interest to NOT contribute to the PAC. Again, little people are so easy to be fooled. I won’t ever have to worry about losing my job with so many little people being brain washed by the Medical Cartels’ PAC money. Not only that, the Medical Cartels’ PAC money is used to elect so many republicans that will never allow a single payer system. Republicans have always fought against any meaningful health care reform. But that’s what our Medical Cartels’ PACs pay them for. Politicians can be bought so easily.
    Pretty soon the only people that will be able to afford health care is us big wigs. And that’s the way it should be. We don’t want you little people using up the resources when we need them. And once again, I thank you little people for capping my SS tax at the $106,800 level. Now I only pay 1.3% SS tax and you little people pay 6.2%. Also, thank you for extending my tax breaks. I’m using the extra money on my vacation houses.

    August 29, 2012 at 14:55 | Report abuse | Reply
    • ira wax

      thats the best comment i've ever read! you said it all. My fear is the party that spends the most money WINS, why do little people buy into the ad lies that the republicans put out there? seniors, middle class, and the poor will be so much better off with obamacare, but will vote for romney, I don't understand why.

      August 29, 2012 at 16:04 | Report abuse |
    • GCW

      "Timmy", if you were a "bigwig" at an insurance company, you would know that the average profit of the big six health insurors has averaged less than 4.5% over the past 10 years. You would also know that if you removed all of the insurance company profit AND overhead it would only reduce the total annual expenditure for health care in the US by approximately 1.45%! You are so full of the Dems baloney you are beginning to smell like a socialist. Plus, your SS contrib at 6.2% plus the 1.3% above the $106,800 cap is about 4 times what the average contribution is and you'll never see it all back in your pocket! Romney may not have the solution; all I can tell you is that PPACA is not the solution!

      August 30, 2012 at 12:02 | Report abuse |
    • Hahahahahahahaha

      GCW – Are you the Medical Cartel? Hahahahahahahahahaha

      August 30, 2012 at 15:46 | Report abuse |
  3. Fido

    I seriously doubt that you are in a VP position at a healthcare company. Nice job trying to convince us.

    August 29, 2012 at 15:51 | Report abuse | Reply
    • Hahahahahahahaha

      Just replace Timmy Suckle with any other health care executive of your choice and THEN it's ALL true!!!

      August 30, 2012 at 09:09 | Report abuse |
  4. Doris Fitch

    Two years ago I asked an orthopediic dr how Obama's health care plan would affect his medicare patients & he said already he was the only one in the office taking medicare patients because medicare only paid a portion of the bill so he couldn't take medicare after it kicked in. I saw a video of ABC news talking to Obama & HE said he was taking 716. billion from medicare, I don't care how many communist fact checkers you post. We will see the end of medicare if Obama gets re-elected & put on the universal health care he wanted in the first place. I am a senior citizen.

    August 29, 2012 at 15:53 | Report abuse | Reply
    • Fido

      Great point!!

      Reducing medicare by $700 billion will probably prove to be a pipe dream. Obama had the perfect solutions to Medicare and SS...via the Simpson Bowles plan. Which he has ignored.

      August 29, 2012 at 16:01 | Report abuse |
    • ira

      Doris your missinformed, if romney wins you will pay more for your medical costs out of your own pocket. Please don't believe that i'm a commy, i'm just a retired senior just like you. Ira

      August 29, 2012 at 16:16 | Report abuse |
    • Marion

      He said he was the only one in his office taking medicare, but "he couldn't take medicare if it kicked in"? That sentence makes no sense. If this Orthopedic doctor has patients currently on medicare he cannot drop them "once it kicks in", so you statement makes no sense.

      The "$716B" in SAVINGS is only directed at Medicare Advantage plans, not "cuts" to traditional medicare or to beneficiaries (not directly anyway). That will probably cause insurance companies who provide Medicare Advantage plans to perhaps drop that coverage but traditional medicare will still be available to you. The biggest problem with Obama's ACA is there are not enough doctors who accept traditional medicare yet Republicans still push to lower payments to doctors. Ryan's plan will REPLACE traditional Medicare with hand outs , or "vouchers" to purchase private insurance plans. In other words, THE END OF TRADITIONAL MEDICARE altogether, and those who can't afford private plans even with this "voucher" will have NO INSURANCE AT ALL. ("THROW GRANDMA OFF A CLIFF" is not so far from the truth.).

      September 1, 2012 at 13:58 | Report abuse |
  5. Jean

    Sustainable growth resolution (SGA) has limited the incease in total physician payments under medicare for the past 10 years. This is essentially continued under the Afordable Health Care Act (ACA) and allows substantial savings. SGA has never been actually allowed to cap payments. There is an annual battle and much more money is allocated. ACA will be equally effective in not reduce spending.

    August 29, 2012 at 16:02 | Report abuse | Reply
  6. Jay

    Romney could care less about what we seniors in the middle class have to pay for our medication. I got in the "gap" the last of May, and it is terrible how much my asthma medicine and diabetic meds are. Thank God for the part that Medicare pays after you get into the "gap." Before they paid anything when you got in the "gap" I had to pay $400 dollars for one medication.
    If I had a net worth of $260 million, five homes, and my wife had at least two cadillacs, I wouldn't worry about how I was going to pay for my medication.

    August 29, 2012 at 17:29 | Report abuse | Reply
    • Marion

      Call the phamaceutical companies you get these drugs from and ask if they have a reduced or free program to help you out. Many of them do.

      September 1, 2012 at 14:26 | Report abuse |
  7. wonder1

    Some people dont realize that with Obama the seniors have been protected. I have an elderly father that is on Medicare and a handicapped brother also. I have watched the medicare system take care of them better in the past 4 years than when Bush was in there. If Romney gets in he is going to end medicare and make it a voucher program making seniors get their own insurance. Some seniors cant get insurance from companies due to issues with their health. This then leaves them with none and no way to get medicines that are important to them. I know most seniors wont pay for medications if they need food and wont see the Dr. This will cause a rise in deaths in the US of our senior citizens.

    August 29, 2012 at 20:09 | Report abuse | Reply
  8. george

    Seniors are old not stupid.....They know cutting 700 billion from Medicare is going to massively reduce the number and quality of medical services available to them. That politifact and factcheck are non-partisan is ridiculous.... they're like democrat PACS.

    August 29, 2012 at 21:09 | Report abuse | Reply
    • Hahahahahahahaha

      Wrong. Those providers are WAY overcharging to begin with. How come the hospital in my area is building a $600 million dollar new building for a town of less than 100,000? Boy are they hurting.....NOT!!! Hahahahahahahahaha

      August 30, 2012 at 09:10 | Report abuse |
    • Marion

      It is not a CUT , George. The payments the govt gives to Medicare Advantage insurers are being cut, not payments to traditional Medicare providers. The problem with traditional medicare is that the reimbursements to doctors is so low you cannot find a doctor in private practice who is accepting new Medicare patients. This has nothing to do with the new health care law.

      September 1, 2012 at 14:31 | Report abuse |
  9. Ann


    August 30, 2012 at 01:04 | Report abuse | Reply
  10. Dan

    I'm a health care reimbursement expert in the long term care field, and in touch with these programs daily. The $716 billion cut is NOT a cut to services to seniors. It reduces the payments that Medicare makes to providers like hospitals, doctors, nursing homes, etc. In 2013, our company is to see a 3% cut in payments, 2014 a 4% cut, and 2015 a 5% cut. At the same time, our company must provide the SAME benefits and services to seniors. Here's the truth: The Democrats generally cut payments to providers, Republicans reduce benefits.

    August 30, 2012 at 09:20 | Report abuse | Reply
  11. carolae

    Will not be voting for this guy. He is looking out for himself and other rich people....not the middle class or seniors. It's as though he wants to sweep them under the carpet. He definitely does not seem like presidential material.....but then again, who is.

    August 30, 2012 at 13:36 | Report abuse | Reply
    • Marion

      Those who are, won't run.....wouldn't touch it with a ten foot poll.

      September 1, 2012 at 14:33 | Report abuse |
  12. Advocate

    Clearly something needed to change in health care, and no one was willing to touch it until President O. I don't think the ACA has is 100% right, but we really have to think about the people these laws effect. Medicare needs to be protected- vouchers wouldn't cut it. Take a look at his young adult on Medicare- her medication is almost $8k a month– who could possibly afford that? 20% of $8k a month for a co-pay might as well be a mortgage. http://www.kickstarter.com/projects/1139799717/the-malformation-of-health-care

    August 30, 2012 at 14:08 | Report abuse | Reply
  13. stanton


    August 30, 2012 at 18:30 | Report abuse | Reply
  14. stanton


    August 30, 2012 at 18:31 | Report abuse | Reply
    • Marion

      One would think "Obamacare" means that President Obama will be providing the care.....complete with white coat. LOL

      September 1, 2012 at 14:36 | Report abuse |
  15. Steve

    Here are the facts. The drug program is called Part D of Medicare. It was placed into law on 1/1/2006. The program is administered by private insurance companies and requires that beneficiaries purchase the coverage. The deductibles and copays vary by company. However most people pay the same premium. The coverage is in place until total expenditures reach $2,930, (for 2012). Beneficiaries then receive discounts until total expenditures reach $4,700, (for 2012). The amount between $2,930 and $4,700 is called "the donut hole". This was not part of the Affordable Care Act, it was in the original legislation. The ACA closes the donut hole and eventually eliminates it in 2020. Therefore, if Romney repeals Obamacare on his first day in office, as he has promised, then he will be taking this benefit away.
    Also, if you read the ACA legislation it is clear that the often mentioned $716 billion in cuts to Medicare are accomplished by reducing payments to hospitals, providers and insurance companies, not through reductions in benefits. The cuts have no impact on current or future beneficiaries, other than to improve it's long term viability. The cuts are justified because a portion of the payments made are to cover what is called uncompensated care. Hospitals etc. are required to provide services to everyone that needs them. They sometimes don't get paid because some people don't have insurance. If everyone has insurance then the govt. doesn't need to reimburse providers for uncompensated care, thereby justifying the reduction in payments.
    I am not a shill for the insurance industry and happen to be a life long Republican. I am an independent consultant specializing in health insurance. Many employers pay me to help them understand what's going on and how it impacts their employee benefits programs. It concerns me that this and many other issues are so poorly understood.

    August 31, 2012 at 14:57 | Report abuse | Reply
    • Marion

      Romney cannot "repeal "Obamacare" on first day in office.......he can try, but if Dems remain the majority in the Senate (my mouth to God's ears), he will not be able to do anything about it. I hope people don't believe the President can just "sign off" on repealing the Affordable Care Act. But then again, there are Republican fools who believe he can do that. "Repeal and Replace" he says......but has anyone heard him say what he will replace it with?

      September 1, 2012 at 14:41 | Report abuse |
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    September 3, 2012 at 08:31 | Report abuse | Reply
  17. Rachel

    obamacare did not fix the donut hole. it still exist till 2020 when you have to pay 25% of all medication cost. then obamacare only can guarantee medicare till 2025. wow. will people be real and stop twisting facts.

    September 5, 2012 at 23:43 | Report abuse | Reply
  18. McTea Party

    You old buggers are driving the country into bankruptcy. Your presciptions cost are more than you are worth.



    October 4, 2012 at 12:08 | Report abuse | Reply
    • lisa

      McTea Party...I wish the same for you when you become an old bugger. I'm sure your parents and grandparents really appreciate your "cure" for medicare.

      October 26, 2012 at 11:44 | Report abuse |
    • Randy

      McTea Party...I just cannot believe that there are people out there like you. This must be a joke or the work of a misguided democrat trying to change as many republicans minds as possible before the election. Either way, it's just simply wrong, you know that. Doesn't matter which side is comes from.

      November 3, 2012 at 00:05 | Report abuse |
  19. A NEW george

    Steve, I would like to consult you for a reasonable fee to help choose a "no donut hole" affordable medical as well as RX plan for Ocean County NJ. 08753. I can not stop reading this site.....
    Thanking you in advance, george

    November 21, 2012 at 23:52 | Report abuse | Reply
  20. saamantharuthprabhu

    Many people are getting wrong by thinking that Romney is trying to get rid of the Planned Parenthood but the real fact is that he is only proposing to eliminate the federal money for it .


    January 9, 2013 at 02:44 | Report abuse | Reply
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Get a behind-the-scenes look at the latest stories from CNN Chief Medical Correspondent, Dr. Sanjay Gupta, Senior Medical Correspondent Elizabeth Cohen and the CNN Medical Unit producers. They'll share news and views on health and medical trends - info that will help you take better care of yourself and the people you love.