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.