While the increase falls short of a doubling, it's clear the Clarks, as well as millions of other seniors and the disabled, face hefty premium increases next year for prescription drug coverage.
Among the top 10 drug plans in terms of enrollment, the average monthly premium will increase anywhere from 8 percent to 63.7 percent, according to an analysis from Avalere Health, a management consulting firm. At the same time, those plans are reducing the number of medicines that they'll cover by about 9 percent.
The most popular plans will cover about 2,100 drugs, on average, a drop from slightly more than 2,300 drugs in 2008, Avalere found.
In short, the plans generally are asking Medicare beneficiaries to pay more for less during an increasingly difficult economic time.
"A number of factors are pushing plan pricing up," said Dan Mendelson, president of Avalere. "Seniors are using more branded and generic drugs. Drug prices went up a little bit as well. But perhaps most important, a number of plans -- notably Humana -- concluded that they underpriced and are making up for lost time."
A new drug benefit under Medicare kicked in at the beginning of 2006. All 44 million elderly and disabled beneficiaries can enroll in a private drug plan approved and heavily subsidized by the federal government. But the government subsidy next year, $53.97 a month for the typical enrollee, only covers part of the costs. All but the poorest participants also pay monthly premiums and co-payments, a share of cost when filling each prescription.
Participants don't have to stick with the same company, though. From Saturday through Dec. 31, they can choose prescription drug coverage from dozens upon dozens of insurance plans operating in their state.
"I'm going to shop around," Clark said.
Federal officials urge seniors to follow Clark's example, even though polling indicates that most won't, in large measure because of widespread satisfaction with the program, referred to as Medicare Part D.
"Plans change. Some plans have increased their prices. But also you change, meaning the drugs that you're taking, or your health status might be different, so it's important you shop around and compare and get yourself in the right plan," said Kerry Weems, acting administrator for the Centers for Medicare and Medicaid Services.
Medicare officials report that in every state, beneficiaries will have access to at least one prescription drug plan with premiums of less than $20-a-month. The one exception is Alaska where the lowest priced plan is $23-a-month. The centers include drug plans as well as plans that offer more comprehensive health benefits, called Medicare Advantage, in their calculations.
About 7.6 million people get drug coverage through a Medicare Advantage plan, while 17.4 million are in the drug-only plans.
Avalere only analyzed the drug-only plans. Among the 10 most popular drug-only plans, customers of Humana Inc., such as the Clarks, will experience the biggest price increases. The company's enhanced plan is jumping from $23.34 to $38.21 on average, though customers may pay less or more depending upon where they live. The company's standard plan is jumping from $25.52 to $40.83.
The two Humana plans rank second and third in terms of enrollment, following the AARP Medicare Rx Preferred Plan, administered by UnitedHealthcare. The premiums for the AARP preferred plan will go up 15.5 percent.
Humana became a major player in the drug benefit by offering the lowest premiums when the program began. In some states, residents could enroll for as little as $1.87 a month. Since 2006, Humana's premium for the standard plan has increased about 329 percent.
"Humana came into the market with the most transparent low-price strategy," said Lindsey Spindle, a vice president at Avalere. "They priced premiums extremely low to stand out from the crowd and it worked. Look at the numbers."
Tom Noland, a Humana spokesman, said in an e-mailed statement that the company's premiums next year "reflect the experience we've seen over the past three years, and our expectations around what will most interest our members and potential members going forward." He said initial prices were also based on the best available data at that time.
He said Humana's prices are now in line with many other plans.
When Avalere looked at the number of drugs that insurers will
cover next year, it did not examine which types or brands were
being dropped. Weems said Medicare took some drugs off its usage
list because they weren't approved by the Food and Drug
Administration.
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