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Friday, 28 September 2012

Large Medicare Part D Premium Increases for 2013

category_bug_journal2.gif Did you receive your Medicare & You 2013 handbook this week? If you didn't, it should arrive soon. Or, you can view it online.

As you know, the annual Medicare enrollment period begins in about two weeks, 15 October. Both the physical handbook and the Medicare website are well designed, useful and easy to understand. It's one of the things the federal government is good at and you should take full advantage.

On the day my Medicare handbook arrived, so did another booklet about renewal of my Medicare Part D (prescription drug) plan. Now back in August, a Medicare press release was headlined, Medicare Prescription Drug Premiums To Remain Steady For Third Straight Year. It began:

”Average basic premiums for Medicare prescription drug plans are projected to remain constant in 2013, Health and Human Services Secretary (HHS) Kathleen Sebelius announced today.

“The average 2013 monthly premium for basic prescription drug coverage is expected to be $30. Average premiums for 2012 were projected to be $30 and ultimately averaged $29.67.”

Remain constant? Oh, yeah?!

When I checked my Part D booklet for the 2013 premium, I was shocked to see that has increased by 22.5 percent. Did you get that? Not 2.25 percent. It's not a typo. It's 22.5 percent.

And indeed, the double-digit premium increases for Part D based on a report from Avalere Health are all over the media this week.

Here are the increases according to Avalere for seven of the most popular drug plans:

  • Humana Walmart-Preferred Rx Plan (23%)
  • First Health Part D Premier (18%)
  • First Health Part D Value Plus (17%)
  • Cigna Medicare Rx Plan One (15%)
  • Express Scripts Medicare-Value (13%)
  • HealthSpring Prescription Drug Plan (12%)
  • Humana Enhanced (11%)

Even so, not every plan is increasing its premium so dramatically. The Washington Post notes:

”The administration’s [$30 average monthly premium] number is accurate as an overall indicator for the entire market, but not very helpful to consumers individually since it doesn’t reflect price swings in the real world.”

The Post also reports that the increases are not due to the Affordable Care Act which is saving elders money by gradually closing the infamous donut hole. If you reach the coverage gap in 2013, you will pay 47.5 percent for covered brand-name drugs and 79 percent for generic drugs.

Further from the Post:

”...the price hikes appear to be driven by market dynamics, and some insurers are introducing new low-premium options to gain a competitive advantage on plans that are raising their prices.”

If your premium is increasing as much as mine, it would behoove us (90 percent of Medicare beneficiaries purchase drug coverage) to compare drug plans and choose a less expensive one that meets our needs. More from the Post:

”...a major new low-cost plan entered the market. Premiums for the AARP MedicareRx Saver Plus Plan will average $15 a month nationally, although it won’t be available everywhere. That’s $3.50 less than the current low-cost leader, the Humana Walmart plan, whose premiums are rising to $18.50.”

(It's not available in my area.) Keep in mind that if the AARP plan makes sense in your case, you must be a member to purchase that coverage - $17 per year – and some people have policy/political reasons for not joining AARP.

For other choices, even now before the official enrollment period, you can see what plans are available to you with the Medicare Plan Finder.

Some elders' drugs are covered by their Medicare Advantage programs and those premiums are expected to remain steady for 2013.

For most Medicare beneficiaries, traditional and Advantage members, that leaves one more question mark for health coverage prices next year – the Part B premium which is currently, for most of us, at $99.90.

The federal government has not yet made an announcement but those who prognosticate on such things predict an increase of between $7 and $10 per month.


No story at The Elder Storytelling Place today. New stories will appear again next week.


Posted by Ronni Bennett at 05:30 AM | Permalink | Email this post

Comments

Ronni--I would be interested in the reason for the apparent conflict between today's fact and August's projection since your cited source contains the statement, "Today’s projection for the average premium for 2013 is based on bids submitted by drug and health plans for basic coverage during the 2013 benefit year, and calculated by the Centers for Medicare & Medicaid Services (CMS) Office of the Actuary."

I do note that the cited posting specifically addressed "Average basic premiums" - bolding, mine. It appears to me that the price increases listed above, in your posting, are not for "basic" plans - which may or may not make a difference.

Sorry - I managed to bold the wrong word. I had meant to bold "basic"

Cop Car...
Basic refers to stand-alone drug plans that are purchased by people with traditional Medicare.

Non-basic would be Medicare Advantage plans that often incorporate drug plans along with dental and other coverage which traditional Medicare does not cover.

Prices for basic coverage range from about $15 per month to more than $100 a month. Higher-cost plans offer low or no deductibles and lower copays.

The plans listed in my story are for the basic plans - stand-alone to be purchased by those with traditional Medicare.

The only reason I could find for the increase from the August projection is "market dynamics" cited in the Washington Post story. That is, private companies raised prices because they can.

The CEOs probably want a salary raise (snark!).

I just want to say, as someone new to Medicare (and grateful to have made it!) that I find Medicare's efforts to explain my options extremely confusing. It's like a lot of instructions in unfamiliar situations: if you already know how the system works, they are helpful. But if you don't, the instructions just make you feel less able to navigate.

I'll get it, but I find it tough acquiring this new branch of knowledge when I'm crazy busy.

I had same sticker shock reaction to a letter from Blue Shield this week announcing a 30% (!) increase. I immediately went to the Medicare Website which provides plan info. But it is not so simple to compare plans. Those with lower monthly fees have deductibles which when added to the lower fee often equal the higher fees. Of greater concern,the prices change willy nilly, so enrolling in one which is low this year provides no guarantee that they won't significantly jack up the price next year.

janinsanfran...
You shoulda seen the Medicare website before it got good. Being new to it now, you can't know magnitude of improvement.

jane d...
I agree with you and each year I have to make my own chart to do the comparison.

But I don't think the difficulty is in the design of the website as much as the number of unnecessary number of variables and plans.

If our government were sane and we had a single payer system and there were no for-profit insurers, this would be as simple as it should be.

You're right too about the random price changes each year. We in Mitt Romney's 47 percent (hell, the 99 percent) cannot easily absorb 22 and 30 percent increases per year in anything we need.

It seems particularly cruel to subject elders, who mostly have zero means of obtaining additional income, to worry about these potential annual increases.

I really hate having to make decisions now. I try to compare prices in the HMO plans, but you need a fortune teller to help you decide which plan to choose. Last year the HMO I had been on raised the hospital co-pay to an outrageous amount, but lowered the co-pay to specialists. I decided on another plan that had a higher doctor co-pay but lower hospital co-pay.

I guessed wrong. I never needed the hospital (thank God), but the specialist co-pay was raised to $30 per visit and I now need to see specialists more often.

I will probably stick with the plan I am on now, because changing doctors is such a hassle that I am too old to go through that again. Sigh!

I'm on a Medicare Cost program. My premium is going up only about $3, after a big jump last year. But a lot of my co-pays are taking a big jump this year. I knew perfectly well we'd end up paying for all these new "free" benefits one way or another. There's no such thing as a free lunch. Never has been, never will be.

This is all so frigging unnecessary!! If we had a civilized single payer system we wouldn't have to go through all this idiocy!!

And Romney/Ryan are no doubt cheering every dollar they can lay on us instead of regulating the (*^% pharmaceutical industries...let's create a landslide in Nov. for the 99%!

It may not be the very worst thing about our current health care quagmire, but it is the thing that makes me most frustrated and angry: the mind-blowing complexity. Forcing old people to attempt these bureaucratic choices (annually, no less) is absurd and cruel.

This price increase was forecast because Obamacare will cost everyone. The latest CBO figures are $1.7 TRILLION -- double the original CBO cost estimate. And you ask why the government didn't warn you of a price increase??? Better to ask why you trust the government.

Even with improvements via Obamacare, single-payer is still the direction U.S. needs to go.

Whoever commenter "Annie" is she seems to keep busy posting faulty oppositional responses on elderblogs. At my blog, she went on about evils of recent efforts to flouridate Portland's water-- based on what her father had told her. Sigh.

Ronni--Thanks for the clarification. I was bamboozled by the names of the plans into thinking that some of them were not the "basic". I haven't yet heard from our Part D; so, I don't know where Hunky Husband and I stand for next year.

I don't understand why I don't see discussion, or at least a mention, of Plan F in all this Medicare talk. It pays the Part B deductible, and ALL of the co-pays. So I pay a premium for my Plan F and another premium for my Part D, and nothing else. period.

I will grant you that no one makes this info easy to find. There is a chart that shows what various plans offer on page 11 at this link:
http://www.medicare.gov/Publications/Pubs/pdf/02110.pdf
And I used my favorite independent insurance agent to find the best one. Could not be happier with this. I rely on my agent when I have questions, but that is rare. I've never had an out-of-pocket expense yet.

I'll be enrolling in Medicare for the first time and I'm terrified. When Medicare Part D was first started I read everything I could find to help my mother choose the best plan for her. She is dead now and even the thought of trying to choose a plan for myself has my mind spinning. I do not feel capable to choose wisely given the number of options available. I'm definitely one of those who wishes we had a single-provider plan.

Kate...
Today's post is about Part D (drugs), not Medigap policies which you are discussing. To be clear for other readers:

As I told Kate privately, the reason I do not discuss the various Medigap policies on this blog is that there are at least 10 choices for supplemental (Medigap) plans with several variables within each choice and different numbers of providers for each within the separate states.

Beyond that, there are three different kinds of pricing for each type of Medigap policy and the premium amounts vary widely among providers.

So I cover Medigap policies only generally, because if I tried to detail every variable, this would become a Medicare only blog and I'm not interested in that.

Everyone keep in mind that although Plan F works well for Kate, your needs may be quite different.

Now let'd get back to Part D as planned today

Each state has SHIP counselors available to help people with their Medicare options. Contact information is supposed to be in the Medicare and You book - I haven't looked this year - but it's also on the Medicare website.

Are you sure that an AARP membership would be necessary for that new plan? - There have been other AARP plans available as Part D options, and they don't require AARP membership.

Remember that Part D was designed by people who don't have to use it - it actually has improved over the years. But every year we see plans that come in low, while last year's low premium plans increase substantially. There's nothing unusual about this year. Most people can probably save money by finding a cheaper plan. BUT: Premiums mean nothing if the plan selected doesn't cover the drugs a person takes or places them in a high tier. The best way to compare is to use the plan finder, sort plans by what is important, and look at the projected annual cost, taking into consideration drug restrictions and preferred pharmacies.

It would be helpful to put the $ increase rather that the % increase. Rather than panic go to the Medicare Gov website and put in your drugs to see what plan works best for you. Remember everyone is different. Each plan will give you yearly cost and a monthly breakdown. Do your homework…example—Humana Wal-Mart plan new premium is $18.50 with a $320 yearly deductable which relates to a $45.50 monthly premium provided you’re using $320 per year. Their enhanced plan is $42.30 with no deductable. If you take no drugs, go for the cheapest plan to avoid that 1% month penalty that could hit you down the road. Remember drug insurance is meant to keep drug cost within reason. Price the drug without insurance and see what the real cost to you is.

At first, not knowing much about Medicare, I did find it difficult to find information even on the new site. I have been reviewing it since I turned 65 a couple of years ago, but didn't join (other than part A) because I had a good plan with my employer. Once you know what the parts A, B, C, D are, it is fairly easy to navigate the site and compare costs.

I had no idea there was a Part D late enrollment penalty separate from the Part B penalty, and that even if you enroll in Part B within the required 8 months (for the SEP) you still pay the Part D penalty if you don’t enroll in it within 2 months of leaving the employer's coverage. (Medicare Enrollment booklet PDF, p. 6 and p. 9.) You have to have Part B to get Part D so I enrolled in B online and then called an insurer for Part D.

I got a letter from Soc. Sec. saying I now have to pay a Part D penalty amount - for the rest of my life - because I was not covered by Part D within two months of leaving my previous insurer. Now, let me stress it is only 90 cents a month and isn’t going to break me.... but why? And forever? I feel like I’m getting my hand slapped for being tardy.

I’m still trying to understand, and I had to use the Medicare site's search feature to find the penalties and enrollment rules. Why are there penalties?

When I called Social Security, the man I spoke with said the penalties were added with the Medicare act passed by Congress in 2003. I just muttered, "oh...Republican congress."

Regarding Nan's suggestion, please remember that SHIP counselors are just like people in general - they can be very good and they also range from bad to useless.

I've heard terrible stories of misinformation people received from SHIP counselors that lost them coverage and cost them penalties.

Many counselors are excellent, but do be wary.

Frank, no one here is panicking. Percentages were used because that's what the story was about - overall increases, not dollar amounts.

All readers, please be careful about advice in the comments. There are errors of information in several of them above. I can't police and correct every one, but you should keep in mind that the minutiae of Medicare is complex and you need to know your sources.

At least with my posts, you've got someone to complain to if I screw up and you can ask for clarification as Cop Car did on this post.

Ronni, you can also complain to Medicare if you get the incorrect advice from a SHIP counselor, because the states get money to run those programs, and complaints and errors would effect how much they get in federal dollars. Also, sometimes the error, if followed up the chain, can result in correction and adjustment by Medicare because it was made by someone in the program. A complaint to the main SHIP office in the state or through a local aging office or even Medicare Rights can be made to help reach the right Medicare person.

Also, as you said, there are errors, we all make them. A person can get Part D with just Part A.

Thanks a bunch for your info. I got my notice last week of my Part D rising five dollars, to $45 per month; however, when I looked up my prescription drugs, the costs appeared to be lower than I am paying now, overall, that is, so I'm keeping the plan. It is indeed a huge pain to check out all the others online. I did that briefly.

Hi Ronni,

As an AARP staffer/long time reader of your blog... just wanted to let you know that Medicare Part D and Medicare Advantage are federal health programs open to anyone who is eligible for Medicare.

You do not have to be an AARP member to enroll in any AARP-branded Medicare plan.

Let us know at mcsupport@aarp.org if you've had folks tell you that.

Tammy,
When I signed up for United Healthcare Supplement (AARP) 2 years ago, I was told that I needed to be a AARP member to get the AARP discount. Made sense to me.

Then, this year, ditto for the joint spousal discount when my wife signed up for United Healthcare.

You say we could have signed up without being AARP members, but I presume we would have missed out on the discounts.

Ronni,
Looks like I have you and all the commenters beat. Just got our Express Scripts 2013 materials. The premium for my Medco "Value" plan (taken over by Express Scripts) is rising from $34.80/month to $61.00/month! Guess the merger of the two major companies failed to produce cost savings.

Looking at the website (https://host1.medcohealth.com/consumer/site/content?contentid=plancostspdp&navHighlightLink=plan_details&navSelectedSection=benefits_resources&accessLink=PlanDetails), the premiums vary widely by state. Being in California, I am hit hardest. So much for the Medicare Part D being a national plan.

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