Average monthly premium for stand-alone Medicare prescription drug coverage will increase by 24% in 2009 to $37, according to report

Sep 29 2008

The average monthly premium for stand-alone Medicare prescription drug coverage will increase by 24% to $37 next year, according to an analysis of the plans by Avalere Health, the Wall Street Journal reports.

The average monthly premium was $30 in 2008. Monthly premiums for the 10 most popular plans will increase by 31% next year, according to the analysis (Zhang/Fuhrmans, Wall Street Journal, 9/26). The 10 largest plans account for 61% of Medicare drug plan beneficiaries (Bloomberg/Arizona Daily Star, 9/16). CMS spokesperson Jeff Nelligan said premium increases are the result of rising drug prices and higher-than-expected usage of drug benefits (LaMendola, South Florida Sun-Sentinel, 9/26).

Acting CMS Administrator Kerry Weems said the average monthly premiums for stand-alone drug plans in 2009 "are still lower than originally estimated, and this is a competitive market." He added that 97% of beneficiaries will have access to drug coverage for the same amount or less than they paid this year (Bloomberg/Arizona Daily Star, 9/16). Weems said, "The engine behind [the drug benefit] is choice and competition." Beneficiaries can enroll in new plans between Nov. 15 and Dec. 31 (AP/Miami Herald, 9/25).

According to the Journal, Medicare beneficiaries "tend to select a plan and stay with it," but it is "unclear how the price increases will affect the market" (Wall Street Journal, 9/26). Avalere Vice President Lindsey Spindle said, "For many years people said, 'I'm going to stay put,' because it can be a difficult, daunting experience to pick a drug plan," but "based on what we see, now would be a very good time to see that their plan meets their medical and financial needs" (Bloomberg/Arizona Daily Star, 9/16).

Beneficiaries also can choose to enroll in comprehensive private Medicare Advantage plans that include drug coverage (AP/Miami Herald, 9/25). Medicare officials said 93% of beneficiaries will have access next year to an MA plan that requires no additional premium and no deductible for drug coverage (Reichard, CQ HealthBeat, 9/25).