Medicare Drug-Plan Premiums To Rise in 2009

By Dianna Cooper
14:22, September 26th 2008
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Medicare Drug-Plan Premiums To Rise in 2009

In the coming year, Medicare drug premiums will significantly increase, an analysis of new government data shows.

According to Kerry Weems, Acting Administrator of the Centers for Medicare and Medicaid Services, senior citizens and disabled persons may perceive a considerable rise or change in premiums in their plans.

As Medicare officials revealed today, in 2009, the average premium will rise 24% to $37 a month for every single one standalone drug plan, up from $30 the current year. The average monthly premium for Humana Inc.'s basic health insurance plan will increase from $9.51 in 2006 to $25.52 in 2008 and to $40.83 in the coming year. This is considered the second largest plan by enrollment, considering the fact that an estimated 1.5 million people are involved. Overall, no less than 3.4 million people have been enrolled by the Louisville-based healthcare company in Medicare drug plans. However, the monthly premiums are not fixed; they can vary depending on the counties, said Avalere Health LLC, an advisory company that examined data from Medicare.

"If prices are increasing more on the midlevel plans, it's simply because our experience tells us that's where we need to be (premium-wise) to cover our actual costs plus a small margin," said Humana spokesman Tom Noland on the topic of premium prices.

The federal government financially supports the drug plans, which are offered by private insurance companies. These companies will start advertising their plans at the beginning of October. At the middle of November the six-week enrollment period would start.

It is not clear yet how radical the changes will be and how it will affect the market. Usually, Medicare beneficiaries are prone to select one of the plans and stay with it. The U.S. health insurance program has two general types of prescription drug (Part D) plans: standalone plans and plans that are part of Medicare Advantage managed health care packages.



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Tags: Medicare
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