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Average Medicare Prescription Drug Premiums to Rise 24% Contact: Lindsey Spindle, 202.207.1337,
lspindle@avalerehealth.net Washington, DC – If consumers stay put in their current Medicare prescription drug plans, the average beneficiary will see a 24% increase in their monthly premiums for 2009, says new analysis released by Avalere Health. The top 10 most popular plans by enrollment will increase their premiums by more than 30%. Using newly released CMS data and its proprietary DataFrame® database, Avalere experts computed an “enrollment weighted” average premium for the Medicare Part D marketplace. Under this method, the premiums of plans with the most enrollees are assigned a heavier weight relative to plans with scant enrollment, giving a truer measure of the beneficiary experience. For example, a premium increase for a prescription drug plan (PDP) with 3 million enrollees carries vastly greater impact on more people than a premium increase for a plan with 10,000 enrollees. “2009 is a critical test of consumers’ loyalty to their Medicare drug plan,” said Bonnie Washington, vice president of Avalere Health. “In the past seniors may have been better positioned to stomach annual premium increases, but with rising costs of essentials and falling home values, these monthly increases may prove to be too steep to ignore.” Avalere’s analysis focused on the top ten PDP sponsors by enrollment. The top ten PDP sponsors in Medicare have more than 60% of the people enrolled in stand-alone PDPs. Among those top ten plan sponsors, all have raised their premiums ranging from 8% (United HealthCare’s Medicare Rx AARP Plan-Saver PDP) to 64% (Humana PDP Enhanced). Avalere calculates that Humana has upped its PDP Standard premium 329% since the inception of the Medicare Part D program. “The days of $1.87 premiums are clearly over,” said Washington, referring to the low prices made available in 2006. “Plans’ willingness to push premiums up this hard in 2009 reflects the pressure to make this a profitable part of their business.” Avalere continues to analyze Medicare drug benefit data. Since the inception of the Medicare drug program, Avalere has used its proprietary DataFrame® database to track trends in drug pricing, plan strategy and structure, and the beneficiary experience. For more information on DataFrame® and Avalere’s analytic capabilities, contact Lindsey Spindle, lspindle@avalerehealth.net.Avalere Health is an advisory services company whose core purpose is to create innovative solutions to complex healthcare problems. Based in Washington DC, the firm delivers research, analysis, insight, and strategy for leaders in healthcare business and policy. Avalere's experts span 125 staff drawn from the federal government (e.g., CMS, OMB, CBO, and the Congress), Fortune 500 healthcare companies, top consultancies, and nonprofits. The firm offers deep substance in areas ranging from healthcare coverage and financing to the changing role of evidence in healthcare decision-making. Its focus on strategy is supported by a rigorous, in-house analytic research group that uses public and private data to generate quantitative insight. Through events, publications, and interactive programs, Avalere also translates real-time healthcare developments into actionable information. Learn more at www.avalerehealth.net. Return to the News Room.
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