Doughnut hole creator defends program design

The doughnut hole has been one of the most controversial elements of Medicare prescription coverage since it was enacted in 2003. In 2010, beneficiaries paid 25 percent of their drugs costs until they reached $2,830. Seniors were then responsible for the next $3,610 worth of drugs, and the government picked up 95 percent of the tab for anything over $6,440.

In 2011, seniors will receive a 50 percent discount on drugs in the doughnut hole, and the discount will be gradually ratcheted up to 75 percent over 10 years.

Thomas said the doughnut hole allowed for an evolution in the marketplace “in which people can make choices and those choices would drive the product.”

However, Democrats see the closing of the doughnut hole as politically beneficial. Obama officials and Democratic lawmakers have touted its closure and new prevention and wellness provisions for seniors as some of the reform law’s greatest benefits.

Thomas said he was optimistic the White House and lawmakers could work together to bring down Medicare spending, citing former White House Chief of Staff Rahm Emanuel’s axiom that a crisis should never go to waste.

“I think the crisis we find ourselves in and all of the work we’ve done earlier put us in a pretty good position,” Thomas said.