CMS announces modest hike in Medicare Part D premiums

Seniors enrolled in Medicare's prescription drug program will pay an average monthly premium of roughly $30 next year — about $1 more than the average rate in 2010, the Centers for Medicare and Medicaid Services (CMS) announced Wednesday.

The estimate doesn't represent next year's base premium — $32.34 — but anticipates that current Part D enrollees will switch to lower-cost plans in 2011. Historically, CMS officials said, that shift has dropped the average premium by about $2. (Hence, the $30 figure floated Wednesday.)

Announcing the news in a phone conference, CMS Administrator Don Berwick said the low rates "will add stability" to a prescription drug benefit currently catering to more than 27 million seniors.  

Berwick did not remain on the call to take questions from reporters.

CMS officials were also quick to note the cost-slashing benefits of the new healthcare reform law for seniors in Medicare's prescription drug program. Under a provision of the new law, for instance, roughly 750,000 Part D beneficiaries caught in the so-called "doughnut hole" have received $250 rebate checks already this year, Berwick said. 

And more help is on the way. Next year, the law will cut the cost of brand-name drugs by 50 percent for seniors in the doughnut hole — part of a gradual decrease that will close the coverage gap in full by 2020. 

Consumer advocates — critical of the doughnut hole since its creation in 2003 — have cheered the new benefits for seniors. But the National Business Group on Health (NBGH) this week issued a potential warning for those who thought that closing the coverage gap could mean only good news for seniors. 

A survey unveiled by the NBGH Wednesday found that 5 percent of the nation's largest companies plan to drop health coverage for retirees in 2011, while another 60 percent are eyeing that possibility in the future. 

The reason? NBGH attributes it, at least in part, to "making Medicare Part D benefits richer as the 'doughnut hole' closes."

More in Healthcare

Study: Premium growth slowed after ObamaCare

Read more »