Drug plan costs to increase

Pay More, Get Less

Up, up, up.

That’s the direction of the price on practically everything we purchase these days. I don’t know about you, but rarely do I ever see news that the cost of something is going down – permanently.

So it really shouldn’t surprise me to hear that the costs for various prescription drug plans are scheduled to take a giant leap upwards beginning in 2010. That’s difficult news to swallow in today’s economy. But it’s even harder when the people affected by this increase are seniors. Already hit by the stock market crash, steep property value declines, and higher costs for everything, you have to wonder how much more this segment of society can absorb.

Whether they like it or not, the Kaiser Family Foundation expects a rise in 2010 drug plan rates ranging from a low of 11% to a high of 32% or more. At the low end, these percentages translate into an increase of about $10 per month. That doesn’t seem like a lot, but for someone on a fixed income whose budget is already stretched to the limit, it most certainly is.

The increase will be even steeper for seniors participating in other types of prescription drug plans. The Foundation mentioned changes for seniors getting their prescription drug plans through Medicare Advantage. Besides an anticipated 32% increase in price on average, some participants may be subject to a reduction in plan benefits including reductions in vision coverage, dental coverage, and even some benefits that Medicare doesn’t traditionally cover.


Benefits reductions are hard to swallow, but it gets even worse because some participants may lose coverage completely!

But wait there’s more.

If Health Reform passes the way President Obama wants it to pass, he’ll use money saved through cuts in payments made to the Medicare Advantage program to help pay the costs of insuring the uninsured. Private insurers offer Medicare Advantage, a program the federal government subsidizes. Those in favor of cutting Medicare Advantage make the argument that the Advantage plans are considerably more costly than Medicare.

What’s a senior to do?

It takes a lot of time and effort, but any senior with a prescription drug plan would be wise to start shopping around for lower-cost coverage. More than 1,500 different stand-alone drug plans are being offered by private insurers and about 80% of the over 2,300 Medicare Advantage plans being offered will include prescription drug coverage.

With that many options, shopping around will no doubt be confusing, even frustrating. You can alleviate some of the confusion with these helpful tips:

• Determine your prescription drug needs first and your budget second. Then start shopping.
• Get multiple written quotes. When requesting a quote, always request the same coverage options so you can be sure you’re comparing apples to apples.
• Be patient and don’t be afraid to ask for help, either through a state level Health Insurance Assistance Program, by visiting the Medicare website, or calling 1-800-Medicare.

Open enrollment is happening right now so it’s time to start shopping!