Seniors face modest Medicare hike, better benefits

By Ricardo Alonzo-Zaldivar
Associated Press / August 19, 2010

E-mail this article

Invalid E-mail address
Invalid E-mail address

Sending your article

Your article has been sent.

Text size +

WASHINGTON — Seniors will see a modest increase in their Medicare prescription premiums next year, but benefits will also improve, federal health officials said yesterday.

The average monthly premium charged by Medicare drug plans for standard coverage will rise to an estimated $30 in 2011, an increase of $1 over 2010, or about 3 percent, said Donald Berwick, Medicare administrator.

Since Medicare drug plans vary widely in coverage and costs, consumer advocates cautioned that seniors need to check their particular plan to avoid unpleasant surprises that may not be revealed in a such a broad estimate.

Nonetheless, seniors with high drug costs can look forward to a noticeable improvement next year.

That is because the new health care law will begin to close the coverage gap known as the doughnut hole. Medicare recipients in the gap will get a 50 percent discount on brand name drugs and 7 percent on generics. The discounts will gradually increase until the gap finally closes in 2020.

“These very modest increases in premiums, along with the new discounts . . . are going to make medications more affordable to Medicare beneficiaries,’’ said Berwick, a Boston pediatrician and Harvard professor who President Obama named to the post earlier this summer.

About 27 million beneficiaries are signed up for the prescription benefit, delivered through private insurance companies. The premium estimate released by Medicare represents only the broadest measure of pocketbook impact.

In practice, Medicare prescription plans vary widely in costs and benefits. Standard coverage that Medicare’s premium estimates are based on remains the exception. Consumer advocates recommend that seniors and family members use Medicare’s online plan finder to see which insurer provides the best deal for an individual’s medications.

“It’s always good news when premiums don’t go up by leaps and bounds, but seniors in some of the most popular plans may see higher premiums,’’ said Tricia Neuman, the top Medicare specialist at the Kaiser Family Foundation. “They need to check their plans so they don’t have unpleasant surprises.’’

Premiums can vary by tenfold or more.

In Baltimore, for example, 45 Medicare drug plans are currently available with premiums, ranging from under $12 to more than $120 a month. And that does not take into account deductibles and copayments or whether a plan provides some coverage in the doughnut hole.

Then there is another factor to consider: Medicare Advantage plans that combine prescription and medical coverage may be a better deal overall for some people than traditional Medicare. Nationally, about 9 million beneficiaries are getting their drug coverage through such plans.

The administration’s estimate of $30 a month seems to acknowledge that some seniors will get sticker shock. Paul Spitalnic, with the Medicare’s costs estimates office, said the figure is based partly on an assumption that seniors will be enrolling in lower-cost plans.

Health search

Find the latest news on:
Or search:

@GlobeHealth on Twitter

    waiting for twitterWaiting for to feed in the latest...