Governor Edward G. Rendell today highlighted the early success of the federal Affordable Care Act – better known as health care reform - as tens of thousands of Medicare enrollees in Pennsylvania are receiving federal rebate checks for $250. 

The rebates help people who have reached the so-called “donut hole” coverage gap in their Medicare Part D prescription benefits.

“Many older adults living on fixed incomes have trouble paying out-of-pocket for needed medications, leaving some to face the terrible choice of whether to buy groceries or life-sustaining prescriptions,” Governor Rendell said. “The federal rebate checks offer seniors peace of mind, helping them to buy medications that can maintain their health. This is a tremendous benefit for seniors, which they gained from Congress passing the Affordable Care Act.”

Signed by President Obama last March, the Patient Protection and Affordable Care Act reduces out-of-pocket liability when Medicare Part D enrollees reach the coverage gap. Nearly 200,000 seniors in Pennsylvania will reach the coverage gap this year, the point at which they have reached the maximum $2,830 initial Part D coverage for prescription drugs. After that, they are responsible for paying 100-percent of the next $3,610 in drug costs.

Studies show that one in five people in this situation will stop taking their medicine because they cannot pay for it. This can lead to serious negative health conditions such as physical deterioration that can require hospitalization and emergency room and physician visits. The $250 covers the cost of many of these prescriptions and allows seniors to keep taking their required medicine.

In 2011, even more assistance will be provided to Part D enrollees who reach the donut hole. They will receive a 50-percent discount on the total cost of their brand-name drugs through agreement with the pharmaceutical manufacturers. Medicare will gradually phase in additional subsidies in the coverage gap – for generic drugs in 2011 and brand-name drugs in 2013, reducing the beneficiary co-payment to 25 percent by 2020. This will reduce the out-of-pocket costs for beneficiaries in the donut hole from $3,610 this year to $1,173 in 2020.

Mary Schneider, 88, of Pittsburgh, appeared with Governor Rendell today at the Homewood Senior Center and said between the federal rebate, Part D and being enrolled in PACENET – the state’s pharmaceutical benefit plan – her out-of-pocket expenses have been greatly reduced. If Mary had no prescription coverage, her out-of-pocket costs for her prescriptions would have been $10,000. Being enrolled in Part D, her costs are reduced by half and PACENET further covers costs, leaving her with $1,100 to pay this year. The one-time $250 rebate goes a long way in helping to manage her finances and pay for the medication she needs.

Older Pennsylvanians enrolled in PACE have no donut hole, but they can still have significant out-of-pocket expenses – as high as $1,000 or more yearly. Here again, the federal rebate checks are very important to help those affected pay for medications.

Federal health care reform has had many positive benefits for Pennsylvania citizens, including allowing parents to continue to carry their children on their health insurance until age 26. As of Sept. 23, health insurers will be required to write affordable health care policies regardless of pre-existing medical conditions for anyone under 19. Beginning in 2014, health insurers will no longer be able to deny coverage because of a pre-existing condition.

Pennsylvania has also received a federal grant to operate a health plan for uninsured adults with pre-existing conditions, which is called “Pennsylvania Fair Care.” More than 3,000 state residents have begun enrolling in the program, which takes effect Oct. 1.

For more information on programs for older adults, including the Lottery-funded PACE and PACENET programs, visit www.aging.state.pa.us  or call 717-783-1549.