Rep. Waxman Questions CMS On Premium Increases For Medicare Prescription Drug Plans

Main Category: Medicare / Medicaid / SCHIP
Article Date: 20 Oct 2008 - 1:00 PDT

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House Oversight and Government Reform Committee Chair Henry Waxman (D-Calif.) on Tuesday wrote a letter to acting CMS Administrator Kerry Weems expressing concern for how premium increases for the Medicare prescription drug benefit will affect beneficiaries, CQ HealthBeat reports. According to CQ HealthBeat, Waxman believes that CMS was "misleading" when it stated that during the open enrollment period beginning Nov. 15, beneficiaries would have access to drug plans with lower premiums than the previous year.

In a Sept. 25 statement, CMS said that beneficiaries nationwide would have access to "at least one prescription drug plan with premiums of less than $20 a month" and that "97% of beneficiaries enrolled in a stand-alone prescription drug plan will have access to Medicare drug and health plans in 2009 whose premiums would be the same or less than their coverage in 2008." According to data gathered by Waxman's staff, 16.3 million Medicare beneficiaries, including 92% of all drug plan members, will pay higher monthly premiums if they stay with the same plan next year. He also stated that in January 2009, average premiums for the drug benefit will increase by 22%, from $31.15 per month to $38.07 per month.

Waxman said since the beginning of the drug benefit the average Medicare drug plan premium has increased "by almost 50%, costing the average senior an additional $150 annually." He also noted that 2009 will be the third consecutive year that drug plan premiums have risen above the inflation rate. "These price increases are causing significant hardships, particularly seniors who live on fixed incomes, and who are already faced with rapidly increasing costs for food, gasoline and shelter," Waxman added.

Waxman requested that CMS provide his panel with information on the cause of premium increases; their effect on the program's enrollment, costs and beneficiaries; and estimates of increases for 2010 through 2012. He asked that the information be presented by the end of the month.

CMS spokesperson Peter Ashkenaz said the agency is collecting data to respond to Waxman. "We have been telling beneficiaries since August (when we announced the benchmarks) that they will need to compare the value of their current plan by looking at the plan coverage and costs as they enter the open enrollment period," he said, adding, "Ninety-seven percent of beneficiaries do have access to lower cost options, but as we have said before, they may need to change plans" (Vadala, CQ HealthBeat, 10/16).

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