Medicare drug benefit to cost less, official says
|
|
Medicare’s controversial new drug benefit for seniors may end up costing less than projected because bids from insurers and others who will provide it have been very competitive, federal officials said on Tuesday.
Some seniors who sign up for the program may not even pay any premiums at all, and it will cost both beneficiaries and the government less than expected, Center for Medicare and Medicaid Services Administrator Dr. Mark McClellan said.
“Based on the actual bids that we have received, the benefit cost per person is going to be 14 percent lower,” McClellan told reporters.
McClellan estimated that the average monthly premium for the prescription drug plan, which will be rolled out in October and become active in 2006, will be $32.20.
“That is $5 less per month than we estimated earlier this year,” he said.
McClellan declined to give a total cost estimate for the plan but said the bids he had seen so far made it possible to estimate a per-person cost.
The Medicare law has been controversial with both Democrats and Republicans. Many lawmakers were alarmed when projections released earlier this year put the cost of the new drug benefit at $724 billion for the 10 years starting in 2006.
That was far higher than the $400 billion the White House told Congress it would cost for 2004-2013, before the legislation was passed in 2003.
McClellan declined to detail how many bids had been received, or from whom. Federal officials have no idea how many seniors will actually sign up for the plan and they will not approve bids from the providers until next month.
But it is expected that insurers, some employers and perhaps pharmacy chains will bid to provide the coverage, under which they will provide drugs to seniors who sign up for their plans and Medicare will reimburse them.
In addition, about one-third of Medicare beneficiaries will qualify for extra help in paying their premiums if their income is below the level, about $14,000 a year, set by Congress and if they choose a plan costing at or below the benchmarks set by region, McClellan said.
“Most will have their full premium paid by Medicare if they enroll in a plan with the premium below this benchmark level,” CMS said.
They may also qualify for a zero deductible and no co-pay, McClellan said.
The Bush administration has been pushing to get older Americans to sign up for the new prescription drug benefit, passed as part of Medicare reform.
“We are far enough along to see that robust competition is translating into lower costs,” McClellan said. He said greater-than-anticipated use of generic drugs and savings caused by better management of drugs - avoiding errors and improper use, for instance - would also save money.
Some critics also say the prescription drug program is too complex, and thus difficult for many elderly people to manage.
Robert Hayes of the Medicare Rights Center said federal officials were acting as hucksters and making an already complicated process even more confusing.
Print Version
Tell-a-Friend comments powered by Disqus
