Medicare projects 2018 base premiums for its Part D drug benefit will be 61 cents cheaper than this year, despite the rising cost of drugs, particularly specialty drugs. It is the first decrease in five years.
The base premium will drop from $35.63 to $35.02 as of Jan. 1, the Centers for Medicare & Medicaid Services announced last week.
The agency also calculated the average basic premium in 2018. This methodology, unlike that used for the base premiums, includes all plan types, adding in special needs plans and private fee-for-service plans, that are left out of the base premium calculation.
It’s weighted by projected enrollment and accounts for the likelihood that a portion of enrollees will switch to lower cost plans.
The result for this calculation was even more impressive. The average basic monthly premium is projected to drop by an estimated $1.20, from $34.70 in 2017 to $33.50 in 2018.
The darling of the Medicare program, the Part D drug benefit is often held up as a government-private sector success story.
Part D offers “an abundance of competing choices in each region and uses cutting edge, cost-saving tools like pharmacy networks and home delivery,” Mark Merritt, president and chief executive officer of the Pharmaceutical Care Management Association, told me after the announcement.
The drop in premiums “is encouraging news for the nearly 43 million seniors who are enrolled in the program,” Health and Human Services Secretary Tom Price said in a statement.
Health industry analysts credited insurance plans with doing a better job of managing drug costs, along with the shift to generics for common drugs, as reasons behind the dip.
But enrollees can’t count on needing to set aside either $35.02 or $33.50 monthly in 2018 because Part D premiums will vary widely across plans. Some plans will increase their premiums in 2018, while others will lower them, Casey Schwarz, senior counsel for education and federal policy at the Medicare Rights Center, told me.
Medicare will release the actual premiums in mid-September, in time for the Oct. 15 to Dec. 7 open enrollment period. Beneficiaries should be on the lookout then for 2018 information from their own plan to see if their premiums are going up or down. They can decide whether they want to switch to a different company.
Read my full article here.
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