CMS Indicates Lower Drug Premiums Expected

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CMS Indicates Lower Drug Premiums Expected

The Centers for Medicare and Medicaid Services (CMS) has announced that,
due to competition among drug plans, the Medicare prescription drug
coverage that begins Jan. 1, 2006. will have lower premiums than
anticipated. The average monthly premium of $32.20 will be about $5 less
per month than previously estimated. About one-third of all Medicare
beneficiaries will qualify for extra help in paying for their drug
premiums. The total cost to the government will be about $15 less per
month for each beneficiary than previously estimated, amounting to
billions of dollars in reduced costs to taxpayers in the first year of the
program.

Beneficiaries can sign up for coverage starting Nov. 15, 2005. The premium
each person pays will depend on the plan chosen, but CMS anticipates that
there will be a significant number of plans in each region with premiums
below the national average of $32.20. Premiums for prescription drug
coverage in Medicare Advantage health plans are expected to be even lower
than in the stand-alone prescription drug plans on average. Medicare
Advantage plans will frequently offer additional drug coverage beyond the
basic Medicare benefit.

CMS is now completing its review of applications and bids of both drug
plans and Medicare Advantage organizations with a prescription drug plan
component, including the new regional PPOs. CMS is currently reviewing
important factors such as whether plans can ensure that beneficiaries are
able to get their drugs at pharmacies close to their homes.

Subsequent to the bid review, but before plans can begin marketing in
October, CMS will provide more details on the premiums, benefits, and
other features of the prescription drug plans and Medicare Advantage plans
that will be available in 2006.

As previously reported in AGA eDigest, CMS has created a number of tools
that can be used in the health professional's office, including a provider
tool kit filled with fact sheets and reproducible artwork. This
information, as well as detailed information for physicians, is available
at www.cms.hhs.gov/medlearn/drugcoverage.asp.

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