Price hikes seen in Medicare drug plans
WASHINGTON -- Millions of seniors enrolled in some of the most popular Medicare prescription drug plans face double-digit premium hikes next year if they don't shop for a better deal, says a private firm that analyzes the highly competitive market.
Seven of the top 10 prescription plans are raising their premiums by 11 percent to 23 percent, according to a report this week by Avalere Health.
In August, Obama administration officials had announced the average premium for basic prescription drug coverage will stay the same in 2013, at $30 a month.
The administration's number is accurate as an indicator for the overall market, but doesn't reflect price swings on specific plans, according to Avalere.
"The average senior is going to benefit by carefully scrutinizing their situation, because every year the market changes," Avalere president Dan Mendelson said. Avalere crunched the numbers based on bid documents that the plans submitted to Medicare.
The report found all top 10 prescription drug plans, known as PDPs, plan to raise prices. However, the most popular plan, AARP MedicareRx Preferred, is going up only 57 cents a month nationally, rising to $40.42 from $39.85.
President Barack Obama's health care law does not appear to be the cause of the increases. Indeed, the law is improving the prescription benefit by gradually closing a coverage gap called the "doughnut hole," which catches people with high drug costs.
Instead, the price hikes appear to be driven by market forces, as some insurers introduce new low-premium options to compete with plans that are raising their prices.
The plans with double-digit premium increases were: the Humana Walmart-Preferred Rx Plan (23 percent); First Health Part D Premier (18 percent); First Health Part D Value Plus (17 percent); Cigna Medicare Rx Plan One (15 percent); Express Scripts Medicare-Value (13 percent); HealthSpring Prescription Drug Plan (12 percent); and Humana Enhanced (11 percent).
Another two plans in the top 10 also had single-digit increases. They were the SilverScript Basic (8 percent) and WellCare Classic (3 percent).
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