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Families USA: 1.6 Million Medicare Beneficiaries Face Higher Prices or New Drug Plans

By Mary Agnes Carey, CQ HealthBeat Associate Editor

August 16, 2007 – An estimated 1.6 million low-income beneficiaries in the Medicare drug program will either be forced to join or be assigned new drug plans by Jan. 1, or pay more for their drug coverage, according to the consumers group Families USA.

The reassignments and higher costs will occur because of premium increases and technical adjustments in the drug law (PL 108-173), the group contends. As part of the drug benefit, beneficiaries have received subsidies as high as $33 per month to help cover the cost of their monthly premiums, but because of a combination of subsidy decreases and premium increases, those subsidies will not be enough to cover premiums of existing plans. "The choice? Pay more or change plans," Families USA said in a news release.

On Aug. 13 Medicare officials announced that monthly premiums next year for Medicare drug coverage will average about $25, far below the $41 estimated when the drug benefit was first enacted in the 2003. Program officials said that costs were lower than projections because of slower than expected growth in prescription drug costs generally.

Kathleen Stoll, director of health policy for Families USA, said in a statement that "while the administration is touting the fact that premiums have gone up less than they feared, the fact remains that our most vulnerable citizens continue to be victimized by fundamental flaws in the Part D plan ... Hundreds of thousands of those, who in many cases are the least prepared or least able to conduct this kind of research, are going to be forced to wade into this mess again."

Centers for Medicare and Medicaid Services Spokesman Jeff Nelligan said the movement of beneficiaries "is due to the competitive nature of the Part D program, which has resulted in lower costs to enrollees and taxpayers." Nelligan said CMS is working with grassroots organizations across the United States "to ensure a smooth transition for beneficiaries affected by the reassignment process" and the agency is "confident from our experience last year that beneficiaries will be reassigned to a plan that meets their needs based on cost, coverage and convenience."

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