Medicare Stand-Alone Drug Plan Premiums Will Increase

Medicare Prescription Drug Plan

Average premiums for stand-alone Medicare prescription drug planswill increase by 8.7% to $40 monthly in 2008, and many plans willreduce benefits, according to a study released on Friday by Avalere Health, USA Today reports. The study, which involved an analysis of CMSdata, found that premiums for most of the Medicare prescription drugplans with the largest enrollment will increase by $5 to $10 monthly(Appleby, USA Today, 10/1).

Medicare beneficiarieshave the ability to switch prescription drug plans, or enroll in theprogram for the first time, between Nov. 15 and Dec. 31 (Zhang, Wall Street Journal,9/29). According to CMS spokesperson Tony Salters, about 10% to 15% ofMedicare beneficiaries will switch prescription drug plans during theenrollment period (Moos, Dallas Morning News, 9/29).

UnitedHealth, Humana To Lose Dual Eligibles

UnitedHealth and Humana,the two largest providers of Medicare prescription drug plans, in 2008likely will lose more than one million dual eligibles combined.UnitedHealth will lose about 650,000 dual eligibles in 2008 becausepremiums for Medicare prescription drug plans offered by the companywill exceed the cost limit in 18 of 34 regional markets, according toanalysts. Humana will lose about 500,000 dual eligibles in 2008 for thesame reason, analysts said (Bloomberg/Minneapolis Star Tribune, 9/28).

CMSspokesperson Jeff Nelligan said that the agency will seek to "ensurethat the (low-income) beneficiaries are placed in a plan that is rightfor them." Dan Mendelson, president of Avalere Health, said, "Plansthat are popular are raising prices because they understand thatseniors are not interested in switching" (USA Today, 10/1).

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