Medicare Says Prescription Drug Part D Premiums Will Increase in 2009

Bloomberg (8/15, Lauerman)

According to the Centers for Medicare and Medicaid Services (CMS), Medicare's Part D drug plans will cost beneficiaries an average of $28 a month in 2009, about $3 more than this year. For the most part, the increase reflects "rising drug costs [and] higher estimates of costs for catastrophic drug coverage." Medicare also noted it "will spend about $36 billion this year to subsidize drug coverage," since beneficiaries' premiums "for basic prescription plans cover [only] about one-fourth of the program's cost."

The new premium represents a 12% increase, according to the AP (8/15, Freking). In spite of "the increase, Medicare officials said the monthly premiums are still way below what was projected when the program was approved in 2003," when "projections were for premiums next year to come in at around $44." CMS has stated that "the program's lower costs are attributable to three main factors -- lower enrollment, drug prices went up less than expected in the two years before the program began, and insurers have been able to negotiate greater discounts than anticipated."

The Bush "administration's most senior Medicare official said the lower-than-projected premiums stand as further evidence that Medicare Part D, enacted by the Republican-controlled Congress in 2003 after a bitterly partisan fight with Democrats, has been a success," The Hill (8/15, Young) notes.

But, critics maintain that the premium increase "exceeds the annual cost of living increase for Social Security, which remains under three percent," Judith Graham wrote in the Chicago Tribune's (8/14) Triage blog. In fact, one patient advocate charged that "the 'government is failing to do anything about the runaway prices that Americans pay for drugs' because it will not negotiate drug price discounts directly with drug companies." HealthDay (8/14, Reinberg) and the South Florida
Sun-Sentinel(8/15, LaMendola) also covered the story.