Examining Changes In Medicare Prescription Drug Benefit Premiums
With the fall open-enrollment period for the Medicare Part D program set to begin Nov. 15, many beneficiaries will experience higher premiums and some insurers are "sharply adjusting" copayments, the Wall Street Journal reports. According to an analysis of five large states -- Florida, New York, California, Texas and Illinois -- by Avalere Health, premiums for the 10 largest drug plans are expected to increase by an average of 31% in 2009. Avalere found that average premiums for the UnitedHealth Group-sponsored AARP MedicareRx Preferred -- the country's largest Medicare drug plan with 2.7 million beneficiaries -- are expected to increase by 18% in 2009 to $34.92 monthly. Premiums for Humana's PDP Enhanced plan, the nation's third-largest Part D plan with 1.4 million beneficiaries, will increase by 51% on average to $39.56 monthly, according to the analysis.
Copays for brand-name medications on the preferred drug list of AARP MedicareRx Preferred will be $36.40 per purchase on average, an increase of 21%, according to the analysis. Average generic copays will remain the same -- $7 per purchase -- for the plan. Average generic copays for Humana's plan will increase by 75% to $7 and average copays for preferred brand-name drugs will increase by 60% to $40. However, some copays are expected to be lowered in 2009, according to the Journal. Humana's PDP Standard plan, the second-largest Part D plan with 1.5 million beneficiaries, will lower its average co-insurance rate for generic drugs from 25% this year to 14% in 2009. The Journal reports that beneficiaries' total out-of-pocket expenses, including premiums, deductibles and copays, will vary based on where they live and which drugs they use.
About 26 million Medicare beneficiaries who are signed up for the Medicare drug benefit are permitted to change plans annually from Nov. 15 to Dec. 31. While in previous years only a small portion of beneficiaries elected to do so, some experts this year say people might be forced to "dig deep into the insurance literature" to determine how their plan could change, according to the Journal. Cheryl Matheis, senior vice president for health strategy at AARP, said, "It always pays to do the search again," adding, "If your plan's cost is going up, then you really do need to make sure you have the best deal."
Analysts said the cost increase might push more beneficiaries to switch to private Medicare Advantage plans, which often include prescription drug benefits.
Tricia Neuman, a Kaiser Family Foundation vice president and director of the Foundation's Medicare Policy Project, said insurers in 2009 will continue cutting back on supplemental insurance of the so-called "doughnut hole," the coverage gap where beneficiaries have to pay the full cost of their medications. The doughnut hole in 2009 will take effect after total drug spending reaches $2,700, up from $2,510 this year, and will continue until out-of-pocket costs reach $4,350. "Things appear to be getting skimpier," Neuman said, adding, "Premiums are going up. More plans have deductibles. The overall picture seems to be less rather than more" (Zhang, Wall Street Journal, 11/4).
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