Premiums for the top 10 prescription plans are up an average of 16% from last year, a new study finds — a hardship for many people. As if escalating prices for food and gas weren’t enough of a worry, most seniors in Medicare’s prescription-drug program are paying considerably higher monthly premiums for coverage this year, according to a study to be released today.
Those in the 10 largest plans — which account for nearly three-fourths of seniors signed up for drug coverage — are paying an average of $26.39 a month, or 16% more than last year, according to the analysis by Avalere Health, an information company serving the healthcare industry.
The rise is modest in dollar terms, and some of the top plans actually lowered their premiums for 2008. But on average, the percentage increase for the drug plan is greater than the change in Medicare’s Part B premium for outpatient care, which rose only 3% in 2008.
“A 16% increase is significant in and of itself, because premiums are rising rapidly at a time when Medicare beneficiaries are finding it harder to afford it,” said Dan Mendelson, president of Avalere. “These are individuals on a fixed income who are facing rapidly rising prices elsewhere in the economy.”
Indeed, he added, premiums for many seniors appear to be going up faster than the cost of coverage for commercial insurance plans that serve workers and their families. Data from Mercer, a benefits consulting firm, show that drug-benefit costs rose a little more than 9% last year for large employers. Both kinds of coverage are delivered by private insurers, but because the Medicare plan is heavily subsidized by taxpayers, a precise comparison is difficult.
Although seniors are one of the most important groups of voters, Medicare has not been a major issue so far in this year’s election. But the rise in prescription premiums may boost Democratic proposals to authorize Medicare to negotiate prices with the pharmaceutical industry.
On the Republican side, presumptive presidential candidate John McCain supports giving Americans the right to import lower-cost medications from countries, such as Canada, where governments set prices.
The next president will face a difficult challenge just to maintain Medicare benefits at current levels, let alone make them more generous, since the program faces a serious long-term funding shortfall.
Medicare officials say the prescription program, with more than 25 million beneficiaries, is a successful example of how private companies can improve the delivery of government benefits. They point out that in many cases, monthly premiums are lower than estimated at the program’s inception, and they credit that to competition among private plans.
But independent experts say the initial estimates may have been too high for several reasons, including the fact that the government had no previous experience with such a program.
Because the Avalere study factored in the latest enrollment figures released by Medicare, the analysis represents an average of what seniors are paying, not just of the premiums quoted by drug plans.
Of the top 10 plans, six raised their premiums, and four reduced them.
Average premiums for the most popular plan, AARP MedicareRx Preferred, rose by 15% to $32.08 a month, the study found. The plan, offered by UnitedHealth Group, has more than 2.7 million members.
Premiums also rose for the next two most popular plans, Humana PDP Standard and Humana PDP Enhanced, by 69% and 6%, respectively.
Medicare officials said seniors can find better deals if they shop around for coverage during the annual open enrollment period, which runs from Nov. 15 through Dec. 31. The Avalere study found some indication that seniors are doing just that. For example, 2008 enrollment in the leading plan — AARP Preferred — dropped by about 300,000 from 2007.
But most seniors don’t switch.
Why is it that these goons in office aawyls pick on the seniors? If they want to reduce costs in social security, why don’t they pick on the millions of losers scamming the disability portion of social security. I don’t know a lot of people, but I know, or have known three that were collecting disability payments, but who could very well be working. One was a OB/GYN who collected disability payments for her son b/c her ex-husband is an alcoholic. I have a friend who dutifully wore two wrists braces until she was declared disabled from working as a nurse. The whole time she wore those braces, she worked eight hours every day QUILTING at home. She hasn’t worn those braces once since getting her disability award, and now she is off touring the country (for over a year) in an RV. My SIL got disability payments, and the entire time she was doing daycare (cash only) in her home.If I know three people, all of whom are scamming the system, or who don’t need the payments (the ob/gyn), then there have to be millions scamming the system. All on the backs of the elderly people who are limping around McDonalds trying to make ends meet. It makes me SO angry that it is happening, and none of our damned politicians seem to care. Rather than fix this problem, they prefer to screw the seniors or confiscate more money from the people who are working their asses off.