No sooner did HHS portend that a recent slew of double-digt premium increases could be a sign of things to come, a new study shows that seniors enrolled in Medicare Advantage Prescription Drug Plans (MA-PDs) are experiencing similar pain. An estimated 8.5 million seniors will have to shell out $39.61 each month, up from $34.69 per month in 2009, a 14.2 percent increase, according to advisory services company Avalere Health.
The timing couldn't be worse for President Obama, as the government already cut payments to Medicare Advantage plans last year, the Associated Press reports. With Democratic bills awaiting Congressional approval that call for more cuts, some seniors might have to drop out of the program. Such a development woudn't go ignored by Republicans. When HHS Secretary Kathleen Sebelius restricted insurance companies participating in Medicare Advantage from lobbying their senior basis against health reform in September, Republicans jumped to the aid of Humana--the insurer in the middle of the controversy--referring to the restriction as an unfair "gag order."
Medicare officials like spokesman Peter Ashkenaz blame the private insurers, pointing out that MA plans are paid 13 percent more than regular Medicare. "The plans need to explain why these increases are necessary," Ashkenaz said, according to the Associated Press.
The study also determined that those who simply stood pat with their MA-PD coverage during last year's open enrollment period, rather than seeking out more economically sound coverage, had their premiums increase by an average of 22 percent.
"Premiums are going up--not just in the individual markets--but also for Medicare Advantage products," said Lindsey Spindle, a vice president at Avalere Health. "They fit into a broader trend of increased financial pressure on the insured through rising co-pays and increased premiums."