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HHS News Release: Medicare prescription drug premiums to remain steady for third straight year

Category: Annual Medicare plan changes
Published: Aug 06, 2012 05:19:55
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Health and Human Services Secretary (HHS) Sebelius announced that average monthly Medicare Part D premiums should remain consistent in 2013.  Based on the Medicare Part D plan carrier bids, the average monthly premium for 2013 should be around $30.  In 2012, HHS also estimated the average premium to be around $30 with the actual average being a slightly lower $29.67.  In 2011, the average monthly premium was reported as $30.76.  The text of the HHS News Release is included below.  As always, Medicare beneficiaries are warned that the average monthly premium figures may not represent their actual changes in Medicare Part D plan premiums.

As a note, in comparison to the figures reported by HHS, we calculated the average actual 2011 premium across all stand-alone Medicare Part D plan (not considering Medicare Advantage plans offering prescription drug coverage or MAPDs) as $53.77 -- or $41.05 when weighted by Medicare Part D plan enrollment.  In 2012, we found the actual average premium across all stand-alone Medicare Part D plans was $53.99 or $39.62 when weighted by plan enrollment.

As reference, here are the weighted average monthly premiums for a standard or basic Medicare Part D prescription drug plan reported by HHS since the beginning of the Medicare Part D program:



FOR IMMEDIATE RELEASE
August 6, 2012

Contact: HHS Press Office
(202) 690-6343

Medicare prescription drug premiums to remain steady for third straight year

Coverage improves and out-of-pocket savings grow as a result of the health care law

Average basic premiums for Medicare prescription drug plans are projected to remain constant in 2013, Health and Human Services Secretary (HHS) Kathleen Sebelius announced today.  The average 2013 monthly premium for basic prescription drug coverage is expected to be $30. Average premiums for 2012 were projected to be $30 and ultimately averaged $29.67. At the same time, since the law was enacted, seniors and people with disabilities have saved $3.9 billion on prescription drugs as the Affordable Care Act began closing the “donut hole” coverage gap.

“Premiums are holding steady and, thanks to the health care law, millions of people with Medicare are saving an average of over $600 each year on their prescription drugs,” said Secretary Sebelius.

Today’s projection for the average premium for 2013 is based on bids submitted by drug and health plans for basic coverage during the 2013 benefit year, and calculated by the Centers for Medicare & Medicaid Services (CMS) Office of the Actuary.

The upcoming annual enrollment period -- which begins Oct. 15 and ends Dec. 7, 2012 – allows people with Medicare, their families and their caregivers to choose their plans for next year by comparing their current coverage and quality ratings to other plan offerings. New benefit choices are effective Jan. 1, 2013.

Because of the Affordable Care Act, out-of-pocket savings on medications for people with Medicare continue to grow.  Last month, CMS announced that more than 5.2 million people with Medicare have saved over $3.9 billion on prescription drugs in the Medicare Part D donut hole since the law was enacted.  In the first half of 2012, over 1 million people with Medicare saved a total of $687 million on prescription drugs, averaging $629 per person this year.

As a result of the Affordable Care Act, coverage for both brand name and generic drugs in the coverage gap will continue to increase over time until 2020, when the coverage gap will be fully closed.  This year, people with Medicare received a 50 percent discount on covered brand name drugs and 14 percent coverage of generic drugs in the donut hole. In 2013, Medicare Part D’s coverage of brand name drugs will begin to increase, meaning that people with Medicare will receive a total of 52.5 percent off the cost of brand name drugs (a 50 percent discount and an additional 2.5 percent in coverage) and coverage for 21 percent of the cost of generic drugs in the donut hole.

For more information on how the Affordable Care Act closes the Medicare drug benefit donut hole, please visit: www.healthcare.gov/ law/features/65-older/ drug-discounts/ index.html.

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  [Emphasis and Highlighting added]





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