CMS Projects Stable Average Prescription Premiums in 2017

The Centers for Medicare and Medicaid Services recently announced that the average basic premium for a Medicare Part D prescription plan is estimated to remain stable in 2017, at $34 per month. This change represents an increase of approximately $1.50 over the 2016 average premium

High-cost specialty drugs and their effect on spending in the catastrophic benefit phase are largely to blame for the continued increase in overall Medicare Part D costs. Medicare is responsible for paying 80% of the cost of drugs that are purchased by Medicare beneficiaries.

According to the recent 2016 Medicare Trustees report, the cost increase of prescription drugs continues to exceed the growth in other Medicare costs and overall health expenditures. Current Medicare Part D expenditures per enrollee are estimated to increase by an average 5.8% annually through 2025. Comparatively, the combined per enrollee growth rate for Medicare Parts A and B are estimated to increase by 4.0%.

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CMS based their projections on bids submitted by drug and health plans for basic drug coverage for 2017. CMS Office of the Actuary calculated the projections based on these data.

Furthermore, as the Affordable Care Act (ACA) closes Medicare Part D gaps, seniors and people with disabilities continue to see out-of-pocket savings. On average, seniors and people with disabilities have received discounts of over $20.8 billion on prescription drugs, an average of $1,945 per beneficiary.

“Stable Medicare prescription drug plan premiums help seniors and people with disabilities afford their prescription drugs,” Andy Slavitt, acting administrator at the CMS, said in a press release, “However, I remain increasingly concerned about the rising cost of drugs, especially high-cost specialty drugs, and the impact of these costs on the Medicare program.”

The annual Medicare open enrollment period begins on October 15, 2016, and ends on December 7, 2016.  -Julie Gould

Reference:

The Centers for Medicare and Medicaid Services. Medicare projects relatively stable average prescription drug premiums in 2017 [press release]. cms.gov. Published July 29,2016. Accessed August 1, 2016.