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Medicare Drug Plan Costs Rising

Private Assistance Can Sometimes Fill the Gap

By Mark Huffman
ConsumerAffairs.com

December 5, 2006

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The enrollment period for the Medicare Part D prescription drug benefit runs through the end of the month, a time when consumers can switch plans or sign up for one for the first time. What kinds of costs do new and existing plan participants face for 2007?

It depends.

According to the Centers for Medicare, the average monthly premium will hold steady at about $24. But some participants who paid relatively low premiums last year might not fall into that "average" category.

U.S. Rep. Henry Waxman (D-CA) has done an analysis of 2007 Medicare premiums, finding that the average will actually increase by 10 percent, with some shooting sharply higher. Humana, which offered the lowest cost plans in many states in 2006, will increase premiums by an average of almost 50 percent, according to Waxman's study.

Some participants may find they are paying more and getting less. Waxman's study found that a Humana plan that cost $47.93 this year will rise to $82.10 in 2007. Currently, that $47.93 premium buys coverage for all drugs in the so-called "donut hole." Next year the $82.10 premium will only cover generic drugs in the donut hole.

The donut hole, or coverage gap, will also get bigger in 2007. This year, seniors pay the full cost of drugs after they have purchased $2,250 worth of drugs and until they have spent $5,100. Next year the donut hole is between $2,400 and $5,451.25, a $200 increase.

It all leads Deane Beebe of the Medicare Rights Center, a not-for-profit organization, to advise seniors to "assume nothing." She cautions consumers to be alert to cost and benefit changes in their plans.

"The bottom line is the drug companies and the insurance companies are all making very hefty profits from the Medicare Part D plan," said Tom Lee, Executive Director of Senior Resources of America, of Los Angeles. "Congress will hopefully give the government the power to negotiate for better drug prices for Medicare Part D, just as it now does for the Department of Veterans Affairs."

Alternatives To Medicare

Some seniors on limited incomes can qualify for private assistance programs, administered by these very same drug companies Lee says are getting richer off of Medicare Part D.

The Partnership for Prescription Assistance, a non-profit group set up to coordinate these programs, says it has helped more than three million Americans nationwide find programs that provide prescription medicines for free or nearly free.

The only catch? Not everyone will be eligible, and each program has its own requirements. PPA is one of the groups working to connect low-income, uninsured and underinsured patients to more than 475 public and private patient assistance programs, including more than 180 programs offered by pharmaceutical companies.

NeedyMeds is another. Visitors to the site can find out what drugs are available under what kind of program and download the forms. Assuming, of course, they have access to a computer and the Internet.

"That's one of the ironies here," said Lee. "The people most likely to be in need of these programs are the least likely to have Internet access.

The PPA is trying to publicize these drug assistance programs in ways other than the Internet. It's conducted a "Help is Here Express" national bus tour. The "Help is Here Express" buses criss-crossed the country, visiting all 50 states and more than 500 cities, promoting the programs and informing seniors how to apply.

Even with three million Americans applying for the various private drug assistance plans, receiving tens of millions of dollars worth of drugs, there are still plenty more free or low-cost drugs available. Though income eligibility requirements will disqualify some from participating, Lee says these programs have the capacity to serve many more seniors.

"I think that many of these programs could cover millions of more people if consumers just knew about them, had access to the database, and just filled out a two page application," he said.

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