Nearly 75% of Medicare drug plan beneficiaries will pay 16% more for coverage this year

Jun 8 2008

Monthly premiums for Medicare beneficiaries enrolled in the 10 largest prescription drug plans this year increased by an average of 16% to $26.39, according to an analysis released on Wednesday by Avalere Health, the Los Angeles Times reports.

Among the 10 prescription drug plans -- which account for about three-fourths of all Medicare beneficiaries enrolled in such plans -- six increased premiums this year, and four reduced them, the analysis found. The analysis found that average monthly premiums for AARP MedicareRX Preferred, the largest prescription drug plan with 2.7 million beneficiaries, this year increased by 15% to $32.08. In addition, the analysis found that average monthly premiums for the next two largest plans, Humana PDP Standard and Humana PDP Enhanced, this year increased by 69% and 6%, respectively.

Avalere President Dan Mendelson said, "A 16% increase is significant ... because premiums are rising rapidly at a time when Medicare beneficiaries are finding it harder to afford it," adding, "These are individuals on a fixed income who are facing rapidly rising prices elsewhere in the economy."

CMS officials said that Medicare beneficiaries can switch to prescription drug plans with lower monthly premiums during the annual open enrollment period from Nov. 15 to Dec. 31.

However, Tricia Neuman, a Kaiser Family Foundation vice president and director of the Medicare Policy Project at the foundation, said that the "tendency for many people is to stick with the plan they have from year to year." She added that, because Medicare premiums and cost sharing account for almost one-third of the average monthly Social Security check, the "additional dollars here and there add up and can take a toll" (Alonso-Zaldivar, Los Angeles Times, 6/5).

The analysis is available online (.pdf).