$250 Medicare Rebate Checks a 'Drop in the Bucket' Compared to Rising Drug Prices

Sometime in August, Patricia Holland will drop into Medicare's dreaded doughnut hole. She is already bracing for that financial wallop.

Holland, 67, of Centreville, Md., regularly takes seven prescription medications. One of them -- Entocort -- is especially expensive. It prevents severe attacks of her colitis, an inflammatory bowel disease.

Right now, with full Medicare drug coverage -- before the doughnut hole -- Holland pays $195 a month for Entocort. That's her co-pay, nowhere near the full price of the medication.

When she enters the doughnut hole, though, her Entocort cost will go up exponentially, consuming, she says, her entire state retirement check.

The doughnut hole is the coverage gap in the Medicare prescription drug benefit, called Part D. Seniors get initial coverage until their total drug expenses exceed $2,830. Then Medicare covers nothing until total spending reaches $6,440, when catastrophic coverage starts. The doughnut hole is the $3,610 space between the two amounts, when seniors pay all costs for their drugs.