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Out-of-Pocket Costs Grow in Medicare Part D

Contact: Lindsey Spindle, 202.207.1337, lspindle@avalerehealth.net

11.12.08

Washington, DC – The average Medicare beneficiary will spend more out-of-pocket for their health plan premium and drugs in 2009 if they stay in their current standalone drug plan, says new research by Avalere Health. 

In its newest snapshot of the Medicare marketplace, Avalere looked at the ten most popular prescription drug plans (PDPs) across 5 states – Texas, California, Illinois, New York, and Florida – to see if copayments for drugs had changed since the 2008 plan year.  Avalere’s experts found that in many cases copayments are up in 2009, with average increases ranging from $1 per prescription to more than $13 per prescription, depending on the specific plan and cost-sharing tier.  According to Avalere’s research, copayment increases are most profound for brand name drugs, although there are some increases for generic drugs too. 

Avalere had previously reported that monthly premiums had spiked for 2009, with growth rates ranging from 8% to 63% in the ten most popular plans by enrollment.  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, and the top 10 most popular plans by enrollment will increase their premiums by more than 30%.  More than 60% of all Medicare beneficiaries enrolled in PDPs are in these top 10 plans.  Avalere’s premium analysis table is available here. 

“Plans are managing to profitability at the same time as people are managing against their fixed incomes and financially difficult times,” said Bonnie Washington, a vice president at Avalere Health.  “When open enrollment begins later this week, all Medicare beneficiaries should take advantage of the opportunity to reevaluate their current plan choice.” 

Avalere will continue to analyze the full Medicare marketplace.  For more information or to request special analysis, contact 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.

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