New report shows minimal rise in average Part D premiums for top 10 plans

Costs for seniors enrolled in the most popular plans under Medicare's prescription drug benefit won't jump nearly as high next year as initially thought, an independent group reported this week. Still, the average cost for all plans will rise by nearly 10 percent, the group says.

Avalere Health, a Washington-based policy group, estimates the average monthly premium for Part D's top 10 plans (by enrollment) will rise 0.2 percent in 2011 — a far cry from the 10 percent hike the same group estimated last month.

What caused the change?

New projections from Medicare, Avalere said, reveal that one plan initially thought to be among the most popular next year — First Health's Part D Premier Plus — won't make the list. 

That plan is expected to see premiums rise almost 43 percent in 2011 — an increase that contributed most heavily to Avalere's 10-percent estimate last month.

Avalere policy analyst Margaret Nowak said Friday that the September estimate assumed current enrollees in First Health plans that won't be offered next year would be automatically switched into the company's Premier Plus plan (and therefore face the 43 percent premium hikes). Instead, Medicare intends to switch those beneficiaries into First Health's Premier plan. 

Not that the second option is cheap either. The Premier plan is projected to increase its monthly premium by roughly 20 percent in 2011, to $36.82, Avalere says.

Among the other nine plans expected to be on the 2011 top-10 list, three will decrease premiums next year, between 11.6 and 2.0 percent, Avalere notes. The other seven will see increases, between 19.6 and 3.0 percent, the group says.

Among all plans, the average premium will rise by 9.49 percent — largely the result of cost spikes expected in the enhanced-plan market. 

This post was updated at 12:54 p.m. on Monday, Oct. 18.