- THURSDAY, Aug. 14 (HealthDay News) — The average monthly premium
for Medicare's prescription drug plan will increase to an estimated $28 in
2009, three dollars more than this year's monthly premium, Medicare
officials announced Thursday.

That 2009 figure is 37 percent lower than originally projected when
Medicare's so-called Part D drug coverage was introduced in 2003, the
officials added. The Part D program offers prescription drug benefits to
Medicare beneficiaries.

“Part D continues to come in under budget, achieve consistently high
satisfaction rates, and with it millions of Americans are living
healthier, better lives,” Kerry Weems, acting administrator of the U.S.
Centers for Medicare and Medicaid Services, said during an afternoon
teleconference.

But, he added, “most beneficiaries will see a premium increase in their
current plan. There will be some significant increases.”

There are three reasons behind the premium increase, Weems said.

“First, there is a trend in prescription drug cost growth generally —
prices tend to increase because of price increases for existing drugs, the
growth in the average number of prescriptions per person, and the
introduction of new drugs,” he said.

Second, the 2008 premiums were calculated as part of a demonstration
project that has now expired. This project resulted in premiums being 50
cents less in 2008 than had been projected.

“That change is now reflected in the 2009 premium,” Weems said.

Third, drug distributors participating in Part D have found coverage
for catastrophic care to be higher than expected. “So they have adjusted
their 2009 bids to reflect those higher-than-anticipated costs,” Weems
said.

There are steps Medicare beneficiaries can take to reduce the impact of
premium increases, Weems added.

In 2009, Medicare beneficiaries will continue to have access to what's
known as enhanced drug coverage, which allows people to pay additional
premiums to cover gaps in their drug coverage. Some low-income
beneficiaries will be able to have their gap coverage at minimal or no
cost, Weems said.

“In addition, 97 percent of people in stand-alone prescription drug
plans will have access to a 2009 plan with equal or lower-cost premiums
than their 2008 plan,” Weems said. “Moreover, many Medicare beneficiaries
will have access to a Medicare Advantage plan that offers lower
prescription drug premiums than a stand-alone plan.”

Currently, 24.4 million Medicare beneficiaries are enrolled in the Part
D drug plan.

In a related development, Medicare officials announced Thursday that 10
doctors-group practices participating in Medicare's Physician Group
Practice Demonstration project showed improved quality of care for
patients with congestive heart failure, coronary artery disease and
diabetes.

Based on these improvements, the 10 groups involved in the project are
being paid $16.7 million in incentives designed to reward health-care
providers for improving results and coordinating the health care needs of
Medicare patients.

“We are paying for better outcomes and we are getting higher quality
and more value for the Medicare dollar,” Weems said in a prepared
statement. “And these results show that by working in collaboration with
the physician groups on new and innovative ways to reimburse for high
quality care, we are on the right track to find a better way to pay
physicians.”

More information

To learn more, visit the U.S. Centers for Medicare and Medicaid Services.