CMS Announces Premium Increase for Part D Beneficiaries in 2009

Medicare officials have just announced rate increases in prescription drug premiums for beneficiaries in stand-alone Part D plans.  Starting next year, the average monthly premium will mean $3 more per month for beneficiaries out of pocket.  CMS is quick to buttress news of this increase with the acknowledgement that the popular program continues to function in the financial black.

There are three reasons behind the premium increase, [Kerry Weems, acting administrator of the U.S. Centers for Medicare and Medicaid Services] said.

“First, there is a trend in prescription drug cost growth generally — prices tend to increase because of price increases for existing drugs, the growth in the average number of prescriptions per person, and the introduction of new drugs,” he said.

Second, the 2008 premiums were calculated as part of a demonstration project that has now expired. This project resulted in premiums being 50 cents less in 2008 than had been projected.

“That change is now reflected in the 2009 premium,” Weems said.

Third, drug distributors participating in Part D have found coverage for catastrophic care to be higher than expected. “So they have adjusted their 2009 bids to reflect those higher-than-anticipated costs,” Weems said.

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