Medicare Drug Plan Costs Rise 11 Percent, More Surprises
Monthly premiums for stand-alone Medicare prescription drug plans (PDPs), which are part of Medicare Part D, will rise an average of 11 percent to $38.94, according to a report by the Henry J. Kaiser Family Foundation. This means that since 2006, the first year that Medicare Part D drug benefits were offered to seniors, the cost has risen by 50 percent.
Some seniors may see more than an 11 percent increase, according to the report, so it is important that prescription drug plan participants carefully check their current plan and shop around during the current six-week open enrollment period, which started November 15. Among the five most popular PDPs, one has raised its premiums by 22 percent, while another has reduced them by 3 percent.
Among seniors who receive their prescription drug coverage as part of Medicare Advantage, which are private health plans subsidized by the federal government and offered through private insurance companies, the increase in costs are even greater. The average monthly premium for these beneficiaries will increase by an average of 32 percent to $48 monthly if they stay with their current plan, according to the Kaiser report.
Currently, two-thirds of the nearly 27 million Medicare beneficiaries who have Part D are enrolled in stand-alone PDPs. Across the nation, a total of 1,576 plans will be available in 2010, with each region offering a range of 41 to 55 plans from which seniors can choose. Exploring and evaluating each of the plans in any given region can be confusing and exhausting for many seniors, and now there they have the additional stress of worrying about rising costs.
Another concern for seniors is that the number of PDPs that will require an annual deductible is rising, up to 60 percent of PDPs in 2010 from 45 percent in 2009. The maximum deductible that any plan may charge is $310. For seniors who did not have to worry about a deductible in the past, this is another expense to consider.
Yet another concern for Medicare D enrollees is that the infamous “doughnut hole” is getting more expensive. In 2010, many beneficiaries will have to pay for the coverage gap, which kicks into play after a senior has spent $2,830 in drugs. Coverage resumes for medication costs above $6,440.
Individuals who have “benchmark plans,” which offer basic Part D coverage to people who quality for the program’s low-income subsidy. Currently 7.9 million people are getting extra financial help, and 2.2 million of these must now change their plans or pay a portion of their premium. Those who choose to stay in their current plan will have to pay approximately $8 to $10 per month.
Many seniors who participate in Medicare Part D have some decisions to make during this enrollment period. Rising drug plan costs, stingier doughnut hole coverage, the possibility of having to pay a deductible, and the addition of a premium cost per month for some low-income seniors are among the financial worries they face. Seniors are urged to not only look at the costs of available drug plans but at the medications they cover, the cost-sharing they charge for the drugs, and accessibility of the drugs. For more information, consumers can contact Medicare at 1-800-633-4227 or go to www.medicare.gov.
Henry J. Kaiser Family Foundation
Wall Street Journal, Nov. 15, 2009