Senior Citizen May Get a Shock When They See
Medicare Drug Plan Premiums for 2009
Medicare administrator urges every senior to check
their plan and other options
By Tucker Sutherland,
editor, SeniorJournal.com
Kerry Weems, CMS
Oct. 8, 2008 – Senior citizens may be in for a big
surprise if they just renew their Medicare Part D drug plan this year,
without checking the details – like the premium, co-pays and
deductibles. The cost for 2009 may be substantially higher than it was
in 2008. This seemed to be the message being delivered today by Kerry
Weems, acting administrator of the Centers for Medicare & Medicaid
Services, in a telephone news conference.
Weems again said, however, that the average monthly
premium for a Medicare Part D stand-alone prescription drug plan will be
$28 in 2009, just $3 over 2008. That doesn’t sound like too much, but it
is actually a 12 percent jump. The increase if far out of line with
normal inflation and the current economic environment.
But, in an earlier news release, Medicare said
about 97 percent of senior citizens will have access to drug and health
plans in 2009 whose premiums would be the same or less than in 2008.
The statements from CMS don’t seem to match,
however, the alarms being sounded by senior citizen advocacy groups and
those who keep on eye on Medicare trends.
Reports are indicating that the plans will
generally increase their premiums from 12 to 60 percent. It is more
difficult to calculate the increases they may begin pushing in co-pays
and deductibles.
Robert M. Hayes, President, Medicare Rights Center
says that in 2009, “the average one-year premium increase for over 60
percent of people with Medicare – those enrolled in the ten largest drug
plans – will exceed 30 percent.”
He added, “Two of the nation’s largest plans, both
sponsored by Humana, are increasing premiums by over 60 percent over
2008. Humana’s standard drug plan, the second largest in the country, is
increasing its premium by 330 percent since it launched its
‘low-premium’ plan in 2006.”
Another view is projected by the Medicare-PartD.com
Website, published by plan brokers, which has loaded in the data for
2009 and says the average monthly Medicare Part D premium across the
nation (excluding the five US Territories) will increase to $46 or 14%
above the 2008 national monthly premium average of $40.
If consumers stay put in their current Medicare
prescription drug plans, the average beneficiary will see a 24% increase
in their monthly premiums for 2009, according to analysis released in
September by Avalere Health.
This reflects a $7 increase from the 2008 average
premium cost of $30.
Peggy Peck, Executive Editor, MedPage Today, writes
that UnitedHealth Group's AARP preferred plan, used by 2.7 million
Medicare beneficiaries this year, will charge $37 a month next year, an
increase of 15.5% from 2008.
Humana's basic plan, she says, will charge $40.83
in 2009, up from $9.51 in 2006, when the Humana plan was the cheapest
available.
“2009 is a critical test of consumers’ loyalty to
their Medicare drug plan,” said Bonnie Washington, vice president of
Avalere Health, a leading advisory company focused on business strategy
and public policy.
“In the past seniors may have been better
positioned to stomach annual premium increases, but with rising costs of
essentials and falling home values, these monthly increases may prove to
be too steep to ignore.”
Avalere’s analysis focused on the top ten PDP
sponsors by enrollment. The top ten PDP sponsors in Medicare have more
than 60% of the people enrolled in stand-alone PDPs.
Among those top ten plan sponsors, all have raised
their premiums ranging from 8% (United HealthCare’s Medicare Rx AARP
Plan-Saver PDP) to 64% (Humana PDP Enhanced).
Avalere calculates that Humana has upped its PDP
Standard premium 329% since the inception of the Medicare Part D
program.
Weems repeatedly said in the news conference that
the Medicare Prescription Drug Plan Finder should be used by every
senior to check changes in their current plan and to seek better options
in other plans.
He emphasized check the plans cost and formulary
(drug list). The plans may have monthly premiums, co-pay amounts and
deductibles.
There are also other online sources of help to
choose a drug plan. One of these sites is
Medicare-PartD.com, and although it is provided by insurance
brokers, it has some unique features and may provide more helpful
information that the Medicare Website.
The open enrollment period, when those in Medicare
can change plans, will open on November 15 and go through the end of the
year.
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