Medicare Drug Premiums Set to Rise Yet AgainBy: Sean Patterson - August 1, 2014
In a sign of what may become the new normal over the next few decades, the U.S. Department of Health and Human Services this week announced that the price of Medicare premiums for prescription drugs will be rising again this year. This would mark the second year in a row that the average monthly Medicare prescription drug plan premium has risen.
According to an Associated Press report, the average monthly Medicare drug plan premium will hit $32 next year. This represents a one-dollar increase over this year’s average monthly premiums.
The rise in drug costs for Medicare comes as seniors are living longer and prices for some drugs are increasing significantly in the U.S. As more of the baby boomer generation begins to retire and take up Medicare for their medical costs, the expenses incurred by the government program are expected to rise accordingly. Medicare is currently in its 49th year of operation.
To counter the news of higher Medicare drug premiums, the Department of Health and Human Services this week released statistics claiming that millions of seniors have saved money since the Patient Protection and Affordable Care Act (ACA, colloquially known as Obamacare) was signed into law in 2010. The department claims that 8.2 million seniors on Medicare currently have prescription drug plans due to the ACA. The department also claims that the ACA has saved those seniors a combined $11.5 billion over the past four years, an average of around $1,407 per patient.
This savings amount refers to out-of-pocket drug costs saved by patients via the “donut hole” (drug plans coverage gap) rebates and discounts that began in 2010. Average savings due to donut hole discounts and rebates has risen over $340 since last year.
“Thanks to the Affordable Care Act, seniors and people with disabilities are saving on needed medications,” said Sylvia Burwell, secretary of the Department of Health and Human Services. “By making prescription drugs more affordable, we are improving and promoting the best care for people with Medicare.”
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