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 Premiums for the ten most popular Medicare Part D prescription drug
plans (PDPs) will rise an average of 8 percent next year - the
fastest clip in five years, according to Avalere Health, a
consulting and research firm. And five of the top plans will boost
their average premiums anywhere from 16 percent to 26 percent.
Seniors got the bad news in the annual notices that plan providers
must send to enrollees by Sept. 30 each year ahead of the annual
fall enrollment period. Enrollment runs from Oct. 15 to Dec. 7 - and
it is the time when seniors can shop for new drug plans, which are
optional add-ons to Medicare.
Medicare officials said in July that the average premium for a basic
Part D plan would hold steady next year at $32.50 per month. Avalere
looked at the 10 most popular plans, which cover more than 80
percent of all enrollees.
The big premium increases should motivate enrollees to shop for new
coverage during the fall enrollment. A key question for shoppers
this year will be whether to buy a basic or enhanced plan.
Basic plans come with a gap in coverage, often called the "donut
hole," where the beneficiary must pay out of pocket after reaching a
cap. In 2016, the gap starts when you and your insurance company
have spent a combined $3,310, and coverage resumes when total
spending reaches $4,850.
The largest basic plan, SilverScript Choice, will charge an average
of $22.56 per month next year. Humana Walmart RX will charge $18.49
per month.
Most enhanced plans offer some coverage in the so-called donut hole,
but also come with higher premiums. For example, AARP MedicareRX
Preferred, which is the largest of the top 10 plans, will see its
average premium jump 21 percent next year to $60.79, according to
Avalere.
Humana Enhanced will boost its average premium 25 percent to $66.25.
Higher premiums for enhanced plans stem, in part, from higher plan
costs for sophisticated drugs used to battle catastrophic illnesses,
according to Avalere.
COSTLY DRUGS
The Part D outlook marks a major change from recent years - average
premiums for the top 10 have been flat or down a bit in each of the
past four years. Now the rising cost of specialty drugs is putting
upward pressure on premiums.
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Responding to inquiries from Reuters, Humana and AARP both issued
statements acknowledging rising drug costs as key factors driving
premium increases, along with consumer usage patterns.
A report released early this year by the Medicare Payment Advisory
Commission (MedPAC), which monitors Medicare for Congress, states
that the trend will pose a "big challenge" for the Part D program in
the years ahead, as fewer big blockbuster drugs are going generic
and more than half of new drug approvals are for specialty drugs.
Huge increases in the prices of some older drugs have sparked a
political firestorm in recent weeks.
Along with premiums, Medicare shoppers should consider how well a
plan matches your medication needs. Look carefully at the
"formulary" in a plan to determine your prescriptions are covered,
what cost-sharing is required and whether any special rules apply.
In some cases, the insurer can require you to start with an
alternate medication rather than the drug your physician prescribes
(step therapy), limits on quantity or a required prior
authorization.
Plans increasingly are using preferred pharmacy networks to deliver
drugs as a cost-control mechanism; that could be a big retailer such
as Wal-Mart, CVS or Walgreen's or a delivery-by-mail option.
Whatever you decide, make sure you are comfortable with the delivery
network for plans that you are considering.
(The writer is a Reuters columnist. The opinions expressed are his
own.)
(Editing by Beth Pinsker, G Crosse)
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