As Medicare's Part D prescription drug program enters its fourth year, government officials say the program has been a success.
"Measured by enrollment, lower costs than originally expected and persistently high satisfaction rates, the Part D drug benefit program has in a short time become a stable, familiar and vital part of Medicare," said Kerry Weems, acting administrator of the Centers for Medicare and Medicaid Services. "Of course, individual plans' premiums and benefits may change. Given their past record of making smart choices, I expect beneficiaries will continue to compare their plan options in the upcoming enrollment period based on cost, coverage and convenience."
Based on the bids submitted by Part D plans, CMS officials estimate the average monthly premium that beneficiaries will pay for standard Part D coverage in 2009 will be $28. This is about 37 percent lower than originally projected when the benefit was established in 2003, according to officials.
The estimated average monthly premium for 2009 of roughly $28 for basic coverage is far below the original estimate for 2009 of $44.12, which was made at the time the Medicare Prescription Drug, Improvement and Modernization Act (MMA) was enacted in 2003.
"Average plan bids have increased at roughly the same rate as drug costs," said Paul Spitalnic, director of the Parts C and D Actuarial Group in the Office of the Actuary at CMS. "The basic premiums paid by Part D enrollees cover about one-fourth of the cost of the standard Part D drug benefit. Enrollees with low incomes qualify for subsidies that typically cover the full amount of these premiums."
The average expected premium for basic coverage in 2009 is about $3 higher than the actual average for 2008. That increase is due to general trends in drug costs, the phase-out of a CMS demonstration project and higher plan estimates for catastrophic coverage based on prior experience.
For 2009, beneficiaries will continue to have access to plans that offer enhanced coverage, said CMS officials. While Medicare beneficiaries will continue to have access to plans that offer gap coverage of generic drugs, the cost of such enhanced coverage is paid by enrollees through additional premiums. Eligible low-income enrollees receive coverage during the coverage gap at minimal or no cost.
Approximately 97 percent of beneficiaries enrolled in a stand-alone prescription drug plan (PDP) will have access to other Medicare drug plans that would cost the same or less than their coverage in 2008. According to officials, the vast majority of PDP enrollees could thus avoid any premium increase in 2009 by enrolling in a lower-cost stand-alone PDP in their region. Many beneficiaries also have access to a Medicare Advantage (MA) plan with lower prescription drug premiums.
The MA-PD premiums continue to be lower than PDP premiums. On average, in 2008, the MA-PD premiums prior to rebates are about $9 per month lower than those for PDPs. In 2009, they will average an estimated $11 lower.
Under Part D, beneficiaries with low incomes can receive extra assistance with their drug plan premiums and cost-sharing, according to CMS officials. Nearly 10 million beneficiaries are receiving drug coverage for little or no cost through the Low-Income Subsidy (LIS) benefit. The average value of the Part D benefit, premium subsidy and cost-sharing subsidy for low-income enrollees is estimated to be about $3,900 in 2009.
In addition to average premiums for 2009, CMS has announced the 2009 national average monthly bid, the base beneficiary premium, the regional low-income subsidy premium amounts for 2009 and the 2009 Medicare Advantage regional preferred provider organization benchmarks.
How does the low cost of Part D affect your practice? Send your comments to Associate Editor Chelsey Ledue at chelsey.ledue@medtechpublishing.com.