email print share Twitter Digg Yahoo Facebook Delicious Google LinkedIn Reddit StumbleUpon

Avalere Finds Costs to Seniors Creeping Up In Prescription Drug Program

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

03.12.10

Washington, DC – New analysis from Avalere Health shows that average monthly premium charged by the top ten most popular Medicare standalone prescription drug plans (PDPs) increased by 10% in 2010, affecting nearly 10 million insured Medicare beneficiaries.  These top ten plans insure 70% of all people enrolled in PDPs.  Avalere found that the average monthly premiums across all PDPs increased by over 40% since the inception of the prescription drug program.

“Monthly premiums and out-of-pocket drug costs for Medicare beneficiaries continue to rise, with some beneficiaries seeing over 20% increases from 2009,” said Bonnie Washington, a vice president at Avalere Health.  “The fact that ten plans capture 70% of the market effectively puts them in the drivers’ seat in terms of setting financial trends and consumer experience within the program.” 

As of January 2010, 27.6 million Medicare beneficiaries are enrolled in Part D plans, with 17.7 million enrolled in standalone prescription drug plans, or PDPs.  Avalere evaluated current enrollment data as of February 2010 and found that insurance companies UnitedHealth Group and Human cover 35% of PDP enrollees, or more than 5.6 million people. These two insurers offer the three most popular plans in the market; the average rise in premiums across these three plans is slightly lower than the average for the top ten plans, at 7% for 2010.

In its latest analysis, Avalere also found that patients’ drug-specific out of pocket costs continue to rise.  Avalere examined the most prevalent four-tier benefit design and found that average cost-sharing increased in every category, or tier, across formularies.  The average monthly copayment for a non-preferred branded drug is $78.95 in 2010, preferred brands are $36.25, and even generics are up to $6.72.  Cost-sharing for specialty and injectible drugs, often the most costly, remained around a 30% of the drug’s negotiated price, but that typically constitutes an increase in costs to consumers as drug prices rose in 2010. 

“Rising out of pocket costs is not just a commercial insurance market phenomenon, and it will continue in all markets until underlying problems of cost and quality are addressed systemically,” said Washington.

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.