The nearly 43 million Medicare beneficiaries who have enrolled in Medicare Part D can expect to save a bit on prescription drugs next year! The Centers for Medicare & Medicaid Services (CMS) announced that the average basic premium for a Medicare Part D prescription drug plan in 2018 is projected to decline from $34.70 to $33.50 per month, a 3% dip in costs and a decrease of approximately $1.20. While the estimate does not exemplify what each prescription drug recipient consumer will experience in 2018, the news is still positive- especially considering that this is the first decrease in prescription drug premiums in five years.
“We are committed to making prescription drug plan premiums affordable so that seniors and people with disabilities in Medicare can access the prescription drugs that they need,” said CMS Administrator Seema Verma.
The estimated decrease in Medicare Part D premiums remains based on bids submitted by drug plans for basic coverage, and is driven by lower expected drug costs for most recipients, with slightly lower costs for those with very high prescription drug spending. The estimated decrease may come as a surprise to some, as the recent 2017 Medicare Trustees report noted spending for Medicare Part D continues to increase faster than spending for Medicare Part A and Medicare Part B. The increase in spending is largely driven by high-cost specialty drugs.
With Medicare’s Open Enrollment Period about two months away (October 15-December 7), this news is important for Medicare beneficiaries who will compare the quality of their current health insurance coverage and prescription drug plans for 2018 and decide whether to remain in traditional Medicare or to sign up for a Medicare Advantage plan. CMS anticipates releasing the premiums and costs for Medicare health and drug plans for the 2018 calendar year in mid-September.
“Lowering drug costs is a key principle of President Trump’s efforts to address the challenges in our healthcare system, and HHS is committed to doing all we can to increase the affordability and accessibility of care,” said Health and Human Services Secretary Tom Price. “Reflecting President Trump’s commitment to this issue, HHS has begun a broad effort to make drugs more affordable – particularly for America’s seniors. This announcement by CMS comes on the heels of a proposal released last month that would allow seniors to share in the discounted drug prices hospitals are already getting under Medicare.”
The battle to bring down prescription drug costs for Medicare beneficiaries will continue after this recent announcement, through the form of legislation. Nearly 30 Senators have sponsored a bill that aims to give Medicare, through Secretary Price’s office, the power to negotiate the best possible price of prescription drugs. Under current law, only pharmaceutical companies are allowed to bargain on drug costs while Medicare is prohibited from the negotiations.
Factor in the estimated Social Security cost of living adjustment (COLA) of 2.2%, and the savings are slowly building up for senior citizens. At 0.3%, the COLA increase is the biggest uptick in years, particularly after there was no increase in 2016, and means seniors can expect an average increase of $28 per month in Social Security.
Click here to view the 2018 Part D base beneficiary premium, national average monthly bid amount, regional low-income premium subsidy amounts, de minimis amount, income-related monthly adjustment amounts, Medicare Advantage employer group waiver plan regional payment rates, and Medicare Advantage regional PPO benchmarks.