Double-digit premium hikes projected for many Medicare drug plans

(AP) WASHINGTON — Seniors enrolled in seven of the 10 most popular Medicare prescription drug plans will be hit with double-digit premium hikes next year if they don't shop for a better deal, says a private firm that analyzes the highly competitive market.

The report Monday by Avalere Health is a reality check on the Obama's administration's upbeat pronouncements. Back in August, officials had announced that the average premium for basic prescription drug coverage will stay the same in 2013, at $30 a month.

The administration's number is accurate as an overall indicator for the entire market, but not very helpful to consumers individually since it doesn't reflect price swings in the real world.

"The average senior is going to benefit by carefully scrutinizing their situation, because every year the market changes," Avalere President Dan Mendelson said. Avalere crunched the numbers based on bid documents that the plans submitted to Medicare.

The report found premium increases for all top 10 prescription drug plans, known as PDPs. However, the most popular plan — AARP MedicareRx Preferred — is only going up 57 cents per month nationally, to $40.42 from the current $39.85.

The seven plans with double-digit premium increases were: the Humana Walmart-Preferred Rx Plan (23 percent); First Health Part D Premier (18 percent); First Health Part D Value Plus (17 percent); Cigna Medicare Rx Plan One (15 percent); Express Scripts Medicare-Value (13 percent); the HealthSpring Prescription Drug Plan (12 percent); and Humana Enhanced (11 percent).

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Another two plans in the top 10 also had single-digit increases. They were the SilverScript Basic (8 percent) and WellCare Classic (3 percent).

On the plus side for consumers, a new low-cost plan entered the market. Premiums for the AARP MedicareRx Saver Plus Plan will average $15 a month nationally, although it won't be available everywhere. That's $3.50 less than the current low-cost leader, the Humana Walmart plan, whose premiums are rising to $18.50.

The new AARP plan is run by UnitedHealth Group Inc., the nation's largest health insurance company. United pays AARP for the right to use its name on a range of Medicare insurance products, a successful business strategy that has proven lucrative for both partners. When Humana and Walmart teamed up to offer their low-cost plan in 2011, United felt the competition.

"There is a real focus on the premium in this market," Mendelson said. "If a plan fields an offering with a low premium, it knows it can capture a significant number of customers."

Medicare spokesman Brian Cook did not dispute the Avalere estimates. "We continue to encourage seniors to shop around and find the plan that works best for them," he said.

Medicare's open enrollment season starts Oct. 15, and beneficiaries have a wide variety of choices of taxpayer-subsidized private prescription plans. Seniors and family members can use the online Medicare Plan Finder to input individual prescription lists and find plans in their area that cover them.

About 90 percent of Medicare's nearly 50 million beneficiaries have some form of drug coverage, with more than 17 million enrolled in private plans through the prescription drug program.

President Obama's 2010 health care law is improving prescription drug plans by gradually closing the coverage gap known as the "doughnut hole" for those with high prescription drug costs.

The Avalare numbers did have one silver lining for the Obama administration. When the projections are tweaked to account for seniors switching to lower-cost coverage, premiums for 2013 are likely to remain steady.

Separately, the administration recently announced that average premiums for Medicare Advantage insurance plans will barely inch up next year on average, while enrollment in the private medical plans will continue to rise. Many Medicare Advantage plans also combine prescription drug coverage in one package deal.

But the biggest premium announcement is yet to come. Virtually all seniors pay the Part B premium for outpatient care, including those with traditional Medicare as well as those in private plans. Currently $99.90 a month, the Part B premium it is expected to rise next year by less than $10.

[rightontarget]

Let me tell you whose REALLY to blame for the high costs. Big Pharm, Big medical manufactures and all those Medical providers who are more about profit margin than they are about health care. Seriously, a few years ago I had to purchase a prescription for my son. We had recently changed insurance carriers so the pharmacy did not have my new information. When I went to pick it up, I was informed that the cost of that bottle of 30 pills would be $1,000.00. (No kidding, that is for real) I about fell over. After providing my new insurance information I was told to pay the required $45.00 co-pay for that particular drug. I asked if the insurance company would actually be paying the $955.00 difference. Yes they were and they DID. The cost to the insurance company was MORE than we paid in premiums deducted from the paycheck at the time. So you tell me who is really causing the cost of healthcare to skyrocket! "Free enterprise" my aunt fanny! There is such a thing as GREED! No pill in the world should cost that much. (Big Pharm excuses it as money being used for "research" which is B.S. Actually it's money to line somebody's pockets because it shows up in their "profit margin".) Don't you just love paying for all those advertisements on TV that tell you to "ask your doctor if such and such medication is for you". DRUG PUSHERS, all of them!

[computerflyer]

Note that most prescription drugs are much cheaper "not in the US". Ever wonder why? Capitalism, free enterprise, and no governmental negotiating for a good deal for the nations sick.

[johnlockesghost]

What the drug companies do is raise the price of their drugs throughout the year sending seniors into the so-called doughnut hole where they have to pay full price for their drugs. Additionally, most, if not all, drug plans do not cover all drugs especially when there is no competition for the drug. What one can do is to access the international market where savings can range anywhere from 100% to 700% depending on the drug and don't be fooled by the propaganda put out by drug companies that drugs on the international market are inferior or dangerous, because they are identical. Why? Because most drug companies operate internationally having facilities around the world.

[Hanks2010]

Okay simple math, don't purchase the 7 who raised their rates by double digits, and purchase the 3 that did not... Free markets , correct!

[askagain]

It is more difficult than that. You need to see which plans cover the prescriptions that you need. Each insurance company covers different prescriptions and some companies pay for some drugs better than others. In selecting a Medicare prescription plan, you tell the insurance company which drugs you are using and they tell you whether a particular drug is covered and how much the coinsurance is for each covered drug. There are also online calulators for that purpose.

[MyNewone]

Prescription drugs pharmaceuticals nothing but pure greed and corruption, they know that people will always need their services, they can do what ever they want to.

[enough-already]

by Smokey_75 September 25, 2012 8:57 AM EDT
After all doctors didn't spend $100,000's and ten years of their life to make money, they did it so they could be a charity helping people for free.

No, Smokey_75,they spent all that time and money so they could make much MORE than that once they got that MD behind their name. Get serious. No doctor spends all that time and money to do ANYTHING for free.

[tsigili]

So much for Obama's lies about seniors being better off.

Idiots allow politicians to get away with leading them down the primrose path!

[bc-1948]

Care to explain the "lies"?????? The only problem with the Medicare Rx plan is that the REPUBLICAN Congress passed this bill with the provision that Medicare couldn't negotiate drug prices. That's the real tragedy.

[forumcomments]

This is only the strat of significant reductions in Medicare. You can't take 700 billion from the plan without significant reductions in care or increased cost by receipients.

[gjc1n1]

Oh Smokey, bring out all the violins for the poor, underpaid physician. Give me abreak. If you were to cut their salaries in half, they still would be well off. Give a fraction of that to nurse practitioners who can do 95% of whatan MD does and works twice as hard (and are twice as attentive to patients) as the self-proclaimed messiahs doctors.

[bc-1948]

So.. you are for the Ryan Plan - that starts with the 700 billion reduction (actually a bending of the future cost curve by 2%) and then cuts even more and goes to vouchers??? Actually, if you go to the Bureau of Labor Statistics site, you will find that the rise in medical costs is slowing - you can reduce $700 billion over 10 years with emphasis on wellness - preventative care and increasing the number of general practice medical doctors and PAs. Two years ago, both the hospital industry and the RX companies already agreed to around $550 billion of this - the rest - coming from the extra government subsidy given by the Republican Congress for the Medicare Advantage programs - they get a premium bonus over what it costs for the average traditional Medicare. 14% more to the insurance companies.

[jeffksr]

The spineless ones in Washington sit on their collective, well covered butts(their special health care) and do absolutely nothing while the big campaign donors simply RAPE the American people, simply because they can. The CEO's and our Legislators should all be in court for criminal behaviour.

[gjc1n1]

My spouse was a life-long union member of a major telecom company. As a result of this, he has free health insurance for the rest of his life. Thankfully it includes prescription drug coverage with modest copays of $8 or $25 depending if the drug is generic or not. Without it, our drug costs would be $15K annually. With it, we pay about $900 yearly, still not chump change but manageable. Unfortunately, should my spouse pre-decease me, the coverage will end two years after his death. Here's the "funny" part. I also worked all my life as a non-union member for a MAJOR health insurance company. I too can get health insurance at a huge cost for the actual coverage and huge co-pays. This is after they told all their employees for years that they would get free health insurance when retired. Their answer: Oops, sorry. We don't want to pay for it any more. Support reasonably-priced, reasonable coverage for most health needs through a national insurance single-payer program. Don't depend on private industry for anything. With the latter, you will most assuredly be royally screwed. Ask any former Bain employee.

[gjc1n1]

It's not "free" the way the Republicans try to label it. It's paid for by DECADES of hard work, union dues, collective bargaining etc. Sort of like what the plutocrats do with their capital gains.

[askagain]

Tell all of your complaints to people who can't find jobs. At least you amd your spouse are privileged to receive pensions with some type of health insurance benefits. Your spouse just happens to have better benefits than your job provided. That happems to msany people but it is still better than what many people have. But of course, employers can never provide enough for some people.