Millions of seniors rely on Medicare Rx coverage to provide a critical lifeline to their medications for chronic and life-threatening conditions. Over the last few weeks, a number of reports have come out discussing cost projections for Medicare prescription drug coverage. Today, I’d like to break down what these reports really mean, particularly for seniors.
When it comes to the Affordable Care Act (ACA), HHS reports that more than 5.5 million Medicare beneficiaries saved a total of $4.5 billion on prescription medications since January 2011. The savings for seniors are projected to continue as implementation of health care reform continues, culminating in the closing of the prescription drug coverage gap—the so-called “donut hole”—in 2020.
Two recent reports examined the projected premium costs of Medicare prescription drug coverage. The Department of Health and Human Services (HHS) announced that average monthly premiums for basic Medicare prescription drug plans were projected to hold steady at around $30 for the fourth year in a row. Another study on premiums published by Avalere Health, found that premiums for 7 out of the 10 most popular prescription drug plans would increase by 11-23%.
How can premiums both increase and remain steady? Despite the increases in some plans, the premium average remains steady because of the influx of new plans, many of which are available for less than $20. Competition in prescription drug plans helps ensure that seniors can continue to receive quality coverage at a reasonable cost and access to the medicines they need. Taken together, these studies demonstrate the need for older Americans to assess their options and “shop around” as they make important decisions about their health care.