Medicare prescription costs to increase significantly in 2016
Medicare beneficiaries will pay an average of 13 percent more on their medications in 2016, the largest increase since 2009, according to a new Kaiser Family Foundation brief.
In addition to the increase in medication costs, two-thirds of prescription drug plans (PDPs) will have increased deductibles in 2016. A growing number of PDPs impose the maximum deductible that is allowed by law, which will go from $320 to $360, the largest increase since the start of the program.
The KFF brief also notes that the premium increase will vary by region, with beneficiaries in New Mexico paying an average of $29.70 per month, and those in New Jersey paying $49.61.
Increases are not the only trend for Medicare PDPs. In 2016, the typical beneficiary will have a choice of 26 PDPs, which is down from 30 in 2015.
The existence of fewer PDPs will make the process of price comparison for seniors a little easier during the open enrollment period, but the number of PDPs is still high enough that it may discourage beneficiaries from changing their plan. KFF's analysis shows that 87 percent of beneficiaries stayed in the same plan between 2006 and 2010, even when they were faced with large premium increases.
The rising cost of prescription drugs is a constant concern from both public and private payers, as insurers increasingly push to start paying for value rather than volume. Additionally, the federal government could save billions annually if it negotiated Medicare Part D drug prices directly with the drug manufacturers, a previous report found.
Though the KFF brief does not say what is responsible for the increase in Part D premiums, the rising costs of specialty drugs may be part of what is fueling the trend.
To learn more:
- read the Kaiser Family Foundation brief
Why payers must focus on paying for value for Rx drugs
Why insurers should negotiate with manufacturers for better drug prices
CMS to test enhanced medication therapy model for Medicare Part D
Survey: Specialty drug costs could rise 23% next year