Based on recently released 2009 Medicare Part D prescription drug plan information from the Centers for Medicare and Medicaid Services (CMS), you can expect an increase in the 2009 monthly premiums and slightly fewer Medicare Part D plans offered in your area.

Average Monthly Part D Premium Increases

The average monthly Medicare Part D premium will increase approximately 14% in 2009.  The average monthly premium across all 2009 Part D plans (excluding the US Territories) is about $45.50 – compared to the 2008 average monthly premium of $40.  For example, the 2009 average Part D premium for residents of Pennsylvania and West Virginia will increase to $46 as compared to the 2008 average premium of $38 - a 21% increase.

However, as noted in our August Newsletter, Medicare or  CMS expects the average Part D premium that is actually paid by Medicare beneficiaries for basic or standard Part D coverage to be around $28, as compared to the standard or basic coverage average of $25 in 2008.

Monthly Premiums: The Highs and The Lows

2009 monthly Medicare Part D plan premiums across the country will range from the lowest cost of $10.30 (for First Health PartD - Secure in New Mexico) to the highest premium cost of $136.80 (for Aetna Medicare Rx Premier in New York).  The 2009 variation in monthly premiums can be compared to the 2008 national premium range of $9.80 to $107.50. 

Fewer Part D Plan Premiums qualify for the Low-Income Subsidy

As mentioned in the last Newsletter, some Part D plans have raised their premiums and moved their prescription drug plans out of the state low-income subsidy (LIS) limits.  On our national and state summary pages (here is California as an example), we have a table showing which Part D plans (sorted by Plan ID) qualified for the Low-Income Subsidy in 2008 and which Part D plans qualify for LIS in 2009.  From our California Part D Plan summary page the number of Medicare Part D plans with premiums low enough to qualify for the Low-Income Subsidy will sink by one-third to six (6) Part D plans in 2009 from the (9) Part D plans currently available in 2008.

As a comparison, in Texas, the number of Part D plans that qualify for the Low-Income Subsidy will be reduced by only one (1) from 15 Part D plans in 2008 to 14 Part D plans in 2009.

A Decrease in Medicare Part D Plan Choices

Medicare Part D beneficiaries will have fewer Part D prescription drug plan choices in 2009.  Although most states or Medicare Part D regions still have a large number of national and regional Medicare Part D plans being offered this year, on average, there will be 49 Part D plans available in each Part D region or state as compared to an average of 53 Part D plans offered in the same region during 2008.   For example, residents of Pennsylvania and West Virginia have a choice of 57 Medicare Part D plans in 2009 as compared to the 63 prescription drug plans offered in 2008, or a 11% decrease in available Part D plans.  In Ohio, the number of Part D plans dropped by nine (9) from 58 2008 Part D plans to 49 Part D plans in 2009 – almost a 16% decrease in Part D plans. 

The Majority Part D Plans have no Initial Deductible

The standard or model Medicare Part D plan for 2009 includes a $295 initial deductible, as compared to the $275 initial deductible in the 2008 Medicare Part D plans; however, Part D plans can also offer variations on the initial deductible.  From our analysis, we find that 45% of the 2009 Medicare Part D plans will include an initial deductible.  In other words, the majority 2009 Medicare Part D plans will offer a $0 initial deductible or first-dollar coverage.  In Florida, 30 out of the 54 Part D plans available in 2009 will have a $0 initial deductible.

Slight Drop in the Number of Part D Plans with partial Donut Hole Coverage

It should not surprise anyone that, as in 2008, there are no 2009 Medicare Part D plans that offer complete brand-name doughnut hole or gap coverage.  However, across the country, approximately 25% of 2009 Part D plans are still offering some form of drug coverage in the donut hole and even a few Part D plans offer limited brand-name drugs along with generics in the donut hole.  The 2009 coverage gap begins after the total annual retail drug purchases exceed $2,700 as compared to $2,510 in 2008.  (Click here for more on the 2009 Medicare Part D plan limits.)  Again in Florida, around 28% of all Part D plans will offer some form of Gap coverage – that is, 15 out of the 54 2009 Part D plans.  In South Carolina, 23% of all Part D plans offer some form of donut hole coverage. 

All Generics, Many Generics and Some Generics

One interesting twist for 2009 is the change in the way that donut hole drug coverage is defined.  In 2008, Medicare Part D plans with donut hole coverage were defined as plans with: All Generics, All Preferred Generics, All Generics and Some Brands, or Some Generics.  In 2009, the subtle variations of donut hole coverage have increased even further to: All Generics, Many Generics, All Generics and Few Brands, Many Generics and Few Brands, or Some Generics.  Be sure to check the Part D plan’s formulary rather than rely on the gap coverage designation. The gap coverage designation is simply a reference.  The three Part D plans that are offering limited Brand-Name coverage are:

(1) Quality Health Plans - Quality Rx Plus - in Florida with a $79.90 monthly premium and covering “Many Generics and Few Brands” in the Coverage Gap 

(2) Alliance Medicare Rx - Alliance Medicare RX - in Michigan with a $64 premium and covering “All Generics and Few Brands” in the Coverage Gap

(3) Dean Health Insurance, Inc. - DeanCare Rx Enhanced - in Wisconsin with a monthly premium of $93 – covering “Many Generics and Few Brands” in the Coverage Gap 

Will you hit the donut hole or coverage gap in 2009?

If your average retail prescription drug costs exceed $225 per month you will go into the donut hole sometime in 2009.  If you wish to get a better idea of how to budget for 2009, you can use our free 2009 PDP-Planner – here is a pre-filled example of our Doughnut Hole (2009) cost estimator in action – you can substitute your estimated retail drug costs for the value in the example. 

2. What are the 2009 Medicare Part D Plan Statistics in your State?

Have we left out an example from your state?  No problem - we have summarized the available 2009 Medicare Part D plan information for all Medicare regions (or states) so you are free to browse premiums and Part D prescription drug plan changes that directly affect you.  Select your state from the list below to review specific Medicare Prescription Drug Plan Statistics.

AK AL AR AZ CA CO CT DC DE FL GA HI IA ID IL IN KS KY LA MA MD ME MI MN MO MS MT NC ND NE NH NJ NM NV NY OH OK OR PA RI SC SD TN TX UT VA VT WA WI WV WY National Statistics - or look back at the 2008 Medicare Part D plan Statistics.