Skip to main content

Advanced Search

Advanced Search

Current Filters

Filter your query

Publication Types



Newsletter Article


CMS Says Many Medicare Drug Plans Will Charge Monthly Premiums $20 or Below

AUGUST 29, 2005 -- Medicare beneficiaries will be able to choose prescription drug plans with monthly premiums of $20 or less, the Centers for Medicare and Medicaid Services (CMS) announced Monday.

That means premiums are coming in considerably below the $35 per month Congress assumed for working purposes when it considered the Medicare drug law (PL 108-173). Plans in many states will charge premiums as low as $10 per month, HHS Secretary Michael O. Leavitt said in remarks to seniors at a Vienna, Va., senior center Monday.

Some plans also may include zero deductibles or deductibles lower than $250 annually, and some plans may offer coverage in addition to the standard drug benefit, officials said, including filling in part of the "donut hole" gap in coverage attacked by Democrats during the debate over enactment of the law.

"Choice and competition among prescription drug plans is working to reduce premiums across the country, making the drug benefit even more affordable for seniors and other Medicare beneficiaries," Leavitt said in a news release.

Earlier this month, CMS estimated the national average monthly premium for coverage equivalent to the Medicare standard coverage would be $32.20. That's still the estimated average, but Monday's announcement details the availability of a number of low-cost options that go into calculating the mean figure.

CMS highlighted some of the options that will be offered to beneficiaries as part of the new Medicare drug benefit. They include:

  • At least one prescription drug plan with premiums below $20 per month, and in some areas significantly below $20, in every region of the country except Alaska. All regions, CMS stated, have multiple plan options with premiums significantly below $30.
  • In every region, prescription drug plans will be available that have zero deductibles or deductibles lower than Medicare's standard $250 annual deductible.
  • Some prescription drug plans will offer coverage that exceeds Medicare's standard plan. This includes help for beneficiaries to pay for costs beyond $2,250 and before their out-of-pocket costs hit $3,600 a year—the "donut" gap in Medicare's standard coverage. Some plans, CMS stated, will cover generic drugs in the coverage gap.

Between 11 and 23 organizations will offer stand-alone prescription drug plans in each region of the country, agency officials said. CMS is now completing the review of stand-alone prescription drug plans and the drug plans to be offered by Medicare Advantage organizations. Plans available may change somewhat between now and the completion of plan reviews.

Leavitt expressed confidence that the large number of choices would not hopelessly befuddle seniors. "Seniors will figure this out. They're smart people," he told reporters after his appearance at the seniors' center.
Leavitt's appearance at the center was part of a country-wide bus tour during which CMS aims primarily to energize community efforts to counsel beneficiaries on choosing drug plans.

In a statement issued Monday, Sen. Edward M. Kennedy, D-Mass., reiterated his criticism of what he called a "fatally flawed" Medicare drug law.

"The truth is that his [Bush's] plan includes billions in subsidies for HMOs and big drug companies at the expense of the Medicare program that seniors know and trust, bars Medicare from negotiating discounts on drug prices for seniors, and puts a ban on importing cheaper medicines from Canada and other industrialized nations," Kennedy said.

But Senate Majority Leader Bill Frist, R-Tenn., a proponent of the new drug benefit, said Monday's announcement was "great news for all Medicare beneficiaries, and proves that injecting competition into the process makes care more affordable, available and dependable."

CMS officials said the agency will provide more comprehensive details on the prescription drug plans and Medicare Advantage plans available in each region as the plan review is completed—which is expected ahead of plan marketing in October. Enrollment begins Nov. 15.

Publication Details