Maryland Governor Announces Partnership With CareFirst For 'Doughnut Hole' Subsidy

Main Category: Medicare / Medicaid / SCHIP
Article Date: 20 Feb 2008 - 9:00 PDT

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Maryland Gov. Martin O'Malley (D) on Friday announced a partnership with CareFirst BlueCross BlueShield to subsidize prescription drug costs for lower-income beneficiaries who fall into the so-called "doughnut hole" coverage gap of the Medicare drug benefit, the Baltimore Sun reports. The gap begins when drug costs for an individual reach $2,510 and ends when spending reaches $5,725.

Under the partnership, residents with annual incomes up to 300% of the federal poverty level would receive a subsidy during the coverage gap. The amount of the subsidy would vary based on how far seniors fall into the gap. The subsidy, which is expected to cost $7 million annually, would be paid for by CareFirst and would not require state funds. Chester Burrell, CEO of CareFirst, said that the subsidy will help the insurer fulfill its public service mission, as well as lower hospital costs that are a result of Medicare beneficiaries not taking their medications. The partnership needs approval from the General Assembly (Smitherman, Baltimore Sun, 2/15).

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