Premiums for Medicare Rx Drug Plans To Grow Next Year, Study Finds
Medicare Part D beneficiaries will face double-digit premium increases next year unless they seek out less costly plans, according to a study of government data by Avalere Health, the AP/San Francisco Chronicle reports.
The data show that seven of the top 10 national plans will charge higher premiums in 2011.
According to the study, premiums will increase by an average of 10% among the top 10 drug plans, which cover around 70% of beneficiaries.
The largest premium increase will be for the First Health Part D Premier Plus plan offered by Coventry Health Care, for which average monthly premiums will increase by about 43%, from $64 to almost $91, the study found.
In addition, Avalere found that more than three million beneficiaries will see their plans discontinued next year because of mandates in the federal health reform law that insurers eliminate duplicative plans.
Medicare officials intend for all but 300,000 seniors to be switched easily to another plan under the same insurer, but the data suggest the changes might be more complicated.
For example, AARP's MedicareRx Saver plan will be discontinued next year. Its 1.5 million members are expected to be switched to AARP MedicareRx Preferred, which has nearly 2.8 million members.
However, the change will increase premiums by about 15% on average for beneficiaries in the Saver plan, while beneficiaries already in the Preferred plan will experience an 11% decrease in premiums on average.
Timothy Hill, deputy director of Medicare drug plans, said that CMS is assuming that seniors facing premium increases will switch to lower-cost plans for their drug coverage.
He said that although beneficiaries will experience "modest change" in pricing next year, "their benefits are going to be better." He said CMS calculations find that premiums will increase by $1, or 3%, on average in 2011.
Improved Doughnut Hole Coverage Also Driving Premium Increase
Study researcher Margaret Nowak said the premium increases are caused by Medicare's restructuring and the program's efforts to help beneficiaries who fall in the program's coverage gap, known as the "doughnut hole" (Alonso-Zaldivar, AP/San Francisco Chronicle, 9/23).
HHS Secretary Kathleen Sebelius recently said that all participating Medicare prescription drug providers will offer 50% discounts on brand-name drugs for patients in the doughnut hole in 2011, leading to about $2 billion in total discounts.
This year, beneficiaries received $250 rebate checks to help cover expenses in the coverage gap. The health reform law is expected to increase discounts over the next several years and effectively close the doughnut hole by 2020 (Norman, CQ HealthBeat, 9/23).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.