Nation & World

Experts foresee big premium increases for Medicare plan

Sal Natale, of Seminole, Fla., says he has no choice but to sign up for Medicare “Part D.” “I really don’t think I have much of an option for protecting me and my wife if I get some serious illness and I need big-time drugs.”
Sal Natale, of Seminole, Fla., says he has no choice but to sign up for Medicare “Part D.” “I really don’t think I have much of an option for protecting me and my wife if I get some serious illness and I need big-time drugs.” The Associated Press

Beneficiaries have until Dec. 7 to see if there’s a lower-cost alternative to Medicare’s popular prescription drug program that will cover their medications in 2016. Consumer advocates and experts say it will pay to shop around this sign-up season.

“Premiums are going up. Deductibles are going up,” said Tricia Neuman, a Medicare expert with the nonpartisan Kaiser Family Foundation. “There is some potential to save a lot of money by switching plans.”

Government spending on the program also has risen significantly, driven by pricey new drugs, notably for hepatitis C infection. The cost for the hepatitis drugs in the Medicare program is expected to be $9.2 billion this year, a near doubling from 2014. Three out of four adults infected with hepatitis C are baby boomers, the group now entering Medicare.

Also known as “Part D,” Medicare’s prescription plan serves about 40 million older and disabled people. Benefits are provided through a variety of insurance arrangements. Stand-alone drug plans that work with traditional Medicare are the most popular, accounting for more than half of beneficiaries.

Sal Natale, a retired dentist who lives near Tampa, Fla., said prescription premiums for him and his wife are going up about 30 percent next year, and he doesn’t see a good alternative.

“I’m just going to grin and bear and hope it starts moderating,” Natale said. The couple is signed up in the Humana Enhanced plan, one of the top 10. Nationally, premiums for that plan are going up by about $13 a month, according to the Kaiser foundation.

Indicators signal rising costs across the program. Among them:

▪  Independent estimates by Kaiser and the consulting firm Avalere Health show increasing premiums for stand-alone drug plans. The average premium will rise from $36.68 to $41.46 per month next year, or 13 percent, according to Kaiser.

▪  The maximum deductible for prescription coverage will rise by $40, to $360.

The Obama administration estimates that drug premiums will remain stable in 2016, averaging $32.50 a month. But the administration and the independent analysts measure differently. For example, the administration adjusts its number for the estimated impact of people assumed to be switching to lower-premium plans. The outside analysts, instead, focus on what’s happening to premiums in the plans for which people are currently signed up.

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