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Home / News & IndustryManaged Care Insight and Analysis
Updated: November 24, 2009
CMS: Part D Premiums Estimated to Increase An Average Of $24 Per Year For 2010

The average monthly premium beneficiaries will pay for Medicare Part D next year is estimated to increase about $2 more per month, according to the Centers for Medicare and Medicaid Services’ (CMS) Center for Health Plan Choices.

The figure is based on bids submitted to CMS by the Part D plans. The average monthly premium for 2010 is estimated to be $30 compared to the 2009 average of $28.

CMS said the basic premiums paid by Part D enrollees cover about 25 percent of the actual cost of the standard Part D drug benefit.

While most Part D enrollees should have stable premiums, beneficiaries "should compare their current coverage with the plans that will be offered in 2010 when information becomes available in October," suggested Jonathan Blum, acting director of the Center for Health Plan Choices.

The center said some beneficiaries who receive a low-income subsidy to pay for their premiums will need to move to a new plan to ensure that they can remain in a zero-premium plan in 2010 because the "plan’s premium will be higher than the 2010 subsidy amount."

According to CMS almost 10 million enrollees are receiving drug coverage through the low-income subsidy (LIS) benefit. Average value of the Part D benefit, premium subsidy, and cost-sharing subsidy for low-income enrollees is estimated to be about $4,000 in 2010, CMS said.

The problem is that the agency randomly auto-enrolls beneficiaries in a Part D plan when they become eligible for the LIS benefit. That premium is at or below the premium subsidy amount, if they do not choose a plan themselves. As a result, these beneficiaries do not have to pay any Part D premium.

Now, CMS will assign the beneficiary to a new plan sponsor where they will not have to pay a premium in those cases where an LIS-eligible beneficiary is enrolled in a plan where the 2010 premium will be higher than the 2010 subsidy amount unless the beneficiary affirmatively chooses to stay in the plan, or chooses another plan.

Information on the 2010 national average monthly bid; the base beneficiary premium; the regional low-income subsidy premium amounts for 2010; and the 2010 Medicare Advantage regional preferred provider organization benchmarks are available online at:

Address: Centers for Medicare and Medicaid Services, 7500 Security Blvd., Baltimore, MD 21244; (877) 267-2323,

  This article was taken from:
The Executive Report on Managed Care

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