Average premiums for stand-alone Medicare prescription drug plans will increase by 8.7%

Average premiums for stand-alone Medicare prescription drug plans will increase by 8.7% to $40 monthly in 2008, and many plans will reduce benefits, according to a study released on Friday by Avalere Health, USA Today reports.

The study, which involved an analysis of CMS data, found that premiums for most of the Medicare prescription drug plans with the largest enrollment will increase by $5 to $10 monthly (Appleby, USA Today, 10/1).

Medicare beneficiaries have the ability to switch prescription drug plans, or enroll in the program for the first time, between Nov. 15 and Dec. 31 (Zhang, Wall Street Journal, 9/29). According to CMS spokesperson Tony Salters, about 10% to 15% of Medicare beneficiaries will switch prescription drug plans during the enrollment period (Moos, Dallas Morning News, 9/29).

UnitedHealth, Humana To Lose Dual Eligibles

UnitedHealth and Humana, the two largest providers of Medicare prescription drug plans, in 2008 likely will lose more than one million dual eligibles combined. UnitedHealth will lose about 650,000 dual eligibles in 2008 because premiums for Medicare prescription drug plans offered by the company will exceed the cost limit in 18 of 34 regional markets, according to analysts. Humana will lose about 500,000 dual eligibles in 2008 for the same reason, analysts said (Bloomberg/Minneapolis Star Tribune, 9/28).

CMS spokesperson Jeff Nelligan said that the agency will seek to "ensure that the (low-income) beneficiaries are placed in a plan that is right for them." Dan Mendelson, president of Avalere Health, said, "Plans that are popular are raising prices because they understand that seniors are not interested in switching" (USA Today, 10/1).