For Medicare enrollees who are hoping to catch a break on their prescription drug costs, 2011 doesn’t hold out much promise. Industry analysts say that most major Part D prescription drug plans will increase their premiums for coverage in the 2011 year. Right now, Medicare Part D enrollees pay about $32 on average per month for prescription drug benefits, but a study conducted by Avalere Health says Part D subscribers should plan to pay about 10% more for prescription coverage in 2011.
Part D premiums aren’t limited, so some prescription drug plan costs could rise much more than average. The study cites one plan whose premiums will increase by nearly half for 2010. Avalere Health reviewed the top 10 Part D prescription drug plans, which serve about 70% of beneficiaries who are enrolled in the optional coverage plans.
The study also estimates that about 3 million Part D subscribers will need to switch their current Part D plan for 2011. Most of those beneficiaries should be able to find comparable coverage with their current provider, but about 300,000 beneficiaries may need to find a new provider altogether. Federal regulations require that Part De providers consolidate coverage into “non-duplicative plans” but some industry analysts say that consolidation may mean some beneficiaries will see higher premiums if they stay with their current insurer.
The AARP will eliminate its MedicareRx Saver plan, requiring about 1.5 million subscribers to enroll is the organization’s MedicareRx Preferred plan, which has a premium cost that is 15% higher than the Saver plan. Those already enrolled in the Preferred plan will see a drop of about 11% in the cost of their annual premiums.
The Centers for Medicare and Medicaid Services say the concern could be nothing more than a tempest in a teapot. According to the agency’s figures, most Medicare Part D subscribers will see an average increase of no more than 3% (about $1) per month in their premium costs, even if they need to switch plans.
One reason for the increase in premiums is the improved “gap” coverage beneficiaries will receive beginning in 2011. In the past, seniors who exceeded pre-established spending limits on prescription drug benefits had to pay the entire cost of their prescriptions until they became eligible for catastrophic drug coverage. Beginning this year, those who exceed the plan limits on spending will be eligible to buy prescription drugs at a reduced rate while in the coverage gap. By 2020, the gap should be entirely eliminated.
- February 4, 2011
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Avalere Health, a healthcare policy research firm, says that Medicare beneficiaries must do some research before making their Medicare Part D plan election for 2011. The company says that significant changes await some enrollees, even if they elect the same Part D provider they had in 2010. According to the company, many Medicare Part D providers have changed their formularies and co-pay costs, meaning that some drugs that were covered in 2010 may not be covered in 2011.
One of the more noticeable changes may be in the way providers structure co-pays. According to Avalere Health, more providers are structuring their Part D plans with five or more tiers, which will allow providers to charge different co-pays for drugs in different plan tiers. The number of tiered plans has risen from 27% in 2009 to more than 40% in 2011. Some plans that already use tiered payment structures have two different tiers for generic drugs.
Another major change for consumers will be in their choice of pharmacy. Some Part D plans will use preferred pharmacies and will base consumer out-of-pocket costs not only on the prescribed drugs, but also on whether or not prescriptions are filled at a participating pharmacy. Consumers who use non-plan pharmacies may find themselves paying up to 50% more in out-of-pocket costs for prescription drugs.
More Part D plans are also using pre-authorization and limiting the quantity of medications that can be dispensed at one time, creating an overall higher cost to the consumer for pharmaceuticals in the form of additional co-pays. The end result of these changes is a net decrease in the number of drugs covered by the top ten prescription drug plans (PDP) for 2011.
Among the top ten plans, the 2011 formularies cover between 50% and 87% of prescription drugs. To illustrate the potential impact of changes among drug plans, Avalere’s analysis shows that while the AARP’s 2011 formulary covers four popular rheumatoid arthritis drugs with a 33% cost-share, Humana-WalMart’s 2011 formulary covers only two of the four drugs and has a 35% cost-share on the covered formulations. In addition, the cost-share at non-preferred pharmacies is significantly higher. Enrollees must pay out-of-pocket for drugs not covered by their provider’s formulary. More information about the Avalere Health study can be found at AvalereHealth.net.
- December 15, 2010
- 2011, AARP, Avalere Health, drugs, health insurance, Humana, Medicare beneficiaries, Medicare Part D plans, Medicare Part D providers, Part D plans, PDP, pharmacies, pharmacy, prescription drug plans, prescriptions, rheumatoid arthritis drugs, top 10 medicare plans, WalMart
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