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CMS: 2011 Medicare Prescription Premiums Stable

 |  By jsimmons@healthleadersmedia.com  
   August 19, 2010

Based on bids that were submitted by plan sponsors, the average 2011 Medicare prescription drug plan (Part D) premiums will have nearly the same rates that beneficiaries are paying this year, the Center for Medicare & Medicaid Services announced Wednesday.

"The 2011 premiums on average will increase $1—from about $29 [this year] to $30 for the beneficiaries," said CMS Administrator Don Berwick, MD, in a telebriefing. "The benefits are going to be steady. Over 99% of participants are going to find in their local areas the opportunity to get into a 2011 plan with a premium that's the same or lower than the one they have now."

Since most premiums are going to remain stable, beneficiaries should keep in mind that they can shop and compare for the best premiums in their local areas, Berwick said. The modest increases in premiums, along with new discounts for brand-name drugs made through the Affordable Care Act, "are going to add stability" to the program, he added.

Berwick noted that under the original Part D statute, many low-income beneficiaries found themselves having to change plans if their current plan raised the premiums above the benchmark. The Affordable Care Act helps reduce the amount of the "disruption" for that population, he said.

Prior to the law, as many as 2.1 million low-income beneficiaries would have been required to change plans because of Part D premium changes, but now that rate is closer to 500,000 beneficiaries, he said. "That's the lowest number of beneficiaries who have been reassigned in the history of the Part D program."

The premiums paid by Part D enrollees cover about 25% of the cost of basic Part D coverage, according to CMS. Enrollees who have limited incomes can qualify for a low-income subsidy that typically would cover some or all of the beneficiary's premium, deductible, copayments, and the cost of drugs in the coverage gap.

Currently, more than 10 million beneficiaries are receiving this low-income subsidy. In 2011, the average value of the subsidy amount—when applied to the Part D benefit, premium, and cost-sharing for those enrollees—is estimated to be about $4,000.

In addition to national average premiums for 2011, CMS also announced the 2011 national average monthly bid, the base beneficiary premium, the regional low-income subsidy premium amounts for 2011, and the 2011 Medicare Advantage regional preferred provider organization benchmarks. The national and regional rate information is available at the CMS website. General information about plan offerings will be released in September.

Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached at jsimmons@healthleadersmedia.com.

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