Medicare drug cost to drop off in ’12

WASHINGTON – Even as health costs continue rise, Medicare beneficiaries will see the average price of a Part D drug plan decline slightly next year, the Obama administration announced Thursday, offering some relief amid pressure to cut the federal health insurance program for the elderly.

The Part D drug benefit, created under the Bush administration, allows seniors and others on Medicare to sign up for a privately administered, government-subsidized health plan to get their prescriptions.

Very popular with beneficiaries, the program has also proved far less costly than budget analysts originally expected, in part because of competition among private plans and because of growing use of less expensive generic drugs.

In 2012, the average Part D plan will charge seniors about $30 a month, according to the Department of Health and Human Services.

That’s down from $30.76 in 2011 and would mark the second time since the drug benefit began being offered in 2006 that average premiums had declined.

By comparison, overall health care spending in America is expected to grow by nearly 5 percent a year between now and 2014, according to the latest estimates by government actuaries. Premiums on many private medical insurance policies are rising even more sharply.

The Obama administration has been working to strengthen the Medicare drug benefit with the help of the new health care law the president signed last year. The law gradually phases out the coverage gap known as the doughnut hole, long viewed as a weakness in the program.

Last year some 4 million seniors received $250 rebate checks when they fell into the gap in coverage, thanks to the law. This year, the law will provide 50 percent discounts on prescriptions for those who hit the doughnut hole.

Administration officials also announced Thursday that more than 17 million Medicare beneficiaries have taken advantage of preventive services such as cancer screenings that are now available without co-pays, another new benefit of the law.

And more than one million people have seen a physician for Medicare’s annual wellness visit, which the new law also makes available without requiring a co-pay.

While celebrated by the Obama administration, the widely acknowledged success of the Part D program is also fueling calls from conservatives to expand privatization of the Medicare program.

Many House Republicans pointed to the drug program in pushing their plan to replace the current government health insurance program with a system of vouchers that seniors would use to purchase private health coverage.