Costs Will Rise for Medicare Part D in 2007 Despite Sunny Announcements to the Contrary

The annual enrollment period for Medicare Part D begins on Nov. 15 and runs through December. 31. People who have become eligible or did not sign up earlier can choose a plan during this period. Those who are unhappy with their current Part D drug plan can switch to a new one. Dr. Mark McClellan, the administrator for the Centers for Medicare and Medicaid announced that average monthly premiums will hold steady at $24. However, several groups have found significant increases especially for the plans that charged the lowest premiums in 2006.

The staff of Representative Henry Waxman (D, CA) did an analysis of 2007 Medicare premiums. They found that average premiums will increase by 10% and some programs will have much steeper increase. For example, Humana, which offered the lowest cost plans in many states in 2006, will increase premiums by an average of almost 50%. Not only are premiums going up, some coverage is going down. One Humana plan cost $47.93 last year and will rise to $82.10. In 2006, this plan covered all drugs in the gap known as the donut hole. Next year it will only cover generic drugs in the donut hole. This coverage gap is also widening in 2007. This year, seniors pay the full cost of drugs after spending $2,250 until they have spent $5,100. Next year the donut hole is between $2,400 and $5,451.25. This is an increase of over $200.

Deane Beebe, spokeswoman for the Medicare Rights Center, said, "Assume nothing." She advises consumers to be alert to changes in their plans. Recent improvements have been made in the plan finder on the Medicare website, www.medicare.gov, making it easier to compare plans.

To add to the confusion a report from the Government Accountability Office found that in most instances the call centers for the private Medicare drug plans were unable to accurately answer questions about plan costs, low-income coverage, and the plan formulary (preferred drug list). Click HERE to read the full report. Unfortunately most Medicare Part D users are relying on the call centers to help them make decisions about choosing drug plans.

Seniors seeking help with Medicare questions, including Part D, can contact a State Health Insurance Program (SHIP). These state programs will provide free, unbiased information on a wide range of health care access and insurance information. Click HERE to find the SHIP in your area.

Created 10/30/06