Some elderly and disabled Americans participating in Medicare's prescription drug benefit will have fewer options next year to avoid a coverage gap and thousands of dollars in out-of-pocket spending, according to a report released on Wednesday.

WASHINGTON (Reuters) Nov. 02, 2006 (via Yahoo News)

In 13 U.S. states, including New York, Florida and Michigan, no drug plans in 2007 will offer coverage to completely plug the gap, known as the "doughnut hole," the report by consumer advocacy group Families USA said. This year, four states lacked such coverage.

The doughnut hole -- a period during which patients must pay up to $2,850 in out-of-pocket expenses after they reach $2,250 in drug costs -- was mandated under the 2003 law Republicans passed to establish the program.

That gap patients must cover is expected to reach $3,051 next year, according to the report, which analyzed government data.

Under the Medicare benefit, private companies offer insurance plans for prescription drugs with government oversight. Most patients pay a premium for basic coverage, or can pay a higher fee for a plan that plugs the gap.

The report comes as Democrats, who have vowed to change the drug benefit, are hoping to win control of the U.S. House of Representatives in next Tuesday's election and possibly even the U.S. Senate.

Conservatives have hailed the program as a way to help Medicare's 43 million seniors and disabled beneficiaries afford their medication.

Nearly 33 million signed up this year, according to U.S. health officials, who say enrollees will have more plans to choose from next year.

Leslie Norwalk, acting administrator for the U.S. Centers for Medicare and Medicaid Services, called the report distorted and incomplete.

"All beneficiaries in all 50 states have the option of an affordable drug plan that offers at least some or complete coverage in the gap in 2007," she said in a statement.

But Democrats and other critics have assailed the Medicare drug program as a boost for the pharmaceutical and insurance industries, which have seen increased business. They also say the program is too cumbersome and confusing, offering dozens of plans that vary across regions.

"This result was inevitable under the Republican law," said House Democratic leader Nancy Pelosi of California, who has said a Democratically-controlled House would pass a bill within its first 100 hours to allow Medicare to negotiate for lower drug prices.

CMS's Norwalk said Medicare patients in every state will have more plan choices that cover generic drugs next year.

But Families USA said 18 of the 25 drugs used most by the elderly currently have no approved generic alternative.

Premiums for plans that cover the "doughnut hole" will cost hundreds of dollars more in many states, their report added.

"This coverage gap never made sense for seniors," said Ron Pollack, the group's executive director.

### Source: Yahoo News