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U.S. says Medicare drug plan costs steady in 2011
August 18, 2010 / 10:06 PM / in 7 years

U.S. says Medicare drug plan costs steady in 2011

WASHINGTON (Reuters) - U.S. health officials said on Wednesday they expect Medicare patients enrolled in the federal health insurance program’s prescription drug benefit to see their premium costs remain flat next year.

The voluntary benefit, know as Part D, pays for medicines for seniors and disabled Medicare patients who have signed up for separate drug insurance plans. The plans cover medicines until they hit the so-called “doughnut hole,” a temporary gap in which patients must assume all costs.

In 2011, Medicare Part D beneficiaries will pay $30 a month in premiums on average compared with $29 on average in 2010, the U.S. Centers for Medicare and Medicaid Services (CMS) said after weighing company’s bids.

The steady rates are large part because there “haven’t been significant changes in plan costs,” said Paul Spitalnic of CMS’s Office of the Actuary.

Companies such as Aetna Inc, CVS Caremark Corp and Humana Inc sell the Part D plans, but are overseen by CMS.

About 27 million people are currently enrolled in Part D supplemental insurance plans, according to CMS, and 29 million are expected to sign up in 2011.

Right now, Part D plans help cover patients’ prescriptions until they reach a certain limit. Patients pay out of pocket for all their medicines until they reach another limit -- $4,550 in 2010 -- and the benefit kicks in again.

The new healthcare law enacted in late March aims to shrink the doughnut hole gradually through drugmaker discounts and federal subsidies by 2020. This year, Part D enrollees who reached the doughnut hole also received a $250 rebate under the law. So far, 750,000 people have received such checks, CMS Administrator Don Berwick told reporters.

Part D has been controversial ever since U.S. lawmakers passed it in 2003 under a Republican-led Congress and President George W. Bush.

While the program has earned support for helping elderly patients afford critical medicines, it has also weathered some criticism for not being properly funded, resulting in the coverage gap and an increase in the nation’s debt.

This year, Medicare is expected to spend 11 percent, or roughly $55 billion, of its $504 billion in benefit payments on Part D, according to the Kaiser Family Foundation, a nonprofit health research group.

Reporting by Susan Heavey; editing by Andre Grenon

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