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Seniors in Medicare drug plans may face $ shock

Friday, Nov. 9, 2007

Cha-Ching! Seniors Enrolled in Medicare Prescription Drug Plans Might be in for Sticker Shock Next Year

Consumers Union finds up to $1,900 annual increases in plan premiums, drug costs; urges beneficiaries to check plan costs during Nov. 15 open enrollment period

(Washington, D.C.) — Halloween may be over, but Medicare Part D beneficiaries shopping during open enrollment could be in for a nasty scare, with up to $1,915 in cost increases next year for premiums and five commonly used prescriptions – the equivalent of about two month’s worth of Social Security checks.

“Anyone currently enrolled in the Medicare drug program should sit down with their family this holiday season to make sure their plan still offers a good deal next year,” said Bill Vaughan, senior health policy analyst for Consumers Union, publisher of Consumer Reports.

“Those folks who simply stick with their current Medicare drug plan and fail to check next year’s drug prices and premiums could face financial disaster come January,” Vaughan added.

Consumers Union also found that while many plans are reducing monthly premiums for next year, they actually are increasing overall annual costs for a theoretical basket of five common prescription drugs monitored in the study.

“Lower monthly premiums can be dangerously deceptive to a senior who doesn’t also check on the costs of the drugs they are taking under that plan,” Vaughan said. “Just because you see your monthly premiums go down, don’t assume your drug costs won’t go up, perhaps dramatically.”

In zip codes in five states (New York, Illinois, California, Texas and Florida), Consumers Union compared January 2007 Medicare Part D Plan out-of-pocket prices for five common drugs and monthly premiums with those advertised for January 2008. At least 82 percent of plans in each state increased their overall costs , and out of the total 247 plans, 39 plans, or 16 percent, increased their costs by 25 percent or more .

The largest increase among the five states sampled was for Envision RxPlus Gold of New York, which increased total premium and drug costs 60 percent – or $1,915 – from January 2007 to January 2008. This plan also had the highest increases in Florida and California, and Texas (along with Blue MedicareRx Standard), and was second only to Blue MedicareRx Standard in Illinois.

“It is so important to take the time and shop among plans, and use the Medicare website (www.Medicare.gov) to check your drug costs,” Vaughan said, adding that CU found up to a $2,700 difference between the lowest and highest cost plan within a state for the five drugs sampled. “A plan that was a bargain this year may be the exact opposite next year. Beneficiaries have just a few weeks during open enrollment to avoid being stuck with a high cost plan in 2008.”

While the majority of plans CU sampled increased overall costs, some plans kept costs low, or even reduced their costs from year to year.

In 2007, HealthSpring Prescription Drug Plan–Reg 22 had the fifth lowest overall drug costs of any plan in Texas for the five sampled drugs and premiums, and a 2008 cost increase of as little as 3 percent . This now makes it the least expensive plan in the state for the five drugs (in New York, Illinois and California the least expensive plans for these five drugs are also run by HealthSpring).

“It is essential that beneficiaries look carefully on the Medicare website and in the ‘Medicare and You Handbook’ for plans with prices that start low and stay low,” Vaughan said.

Consumers Union also reminds beneficiaries that many could benefit by reviewing their drug options with their doctors and considering effective, lower-cost alternatives. Savings from moving to a generic or lower cost brand alternative might more than cover their Part D premiums. Information on the safest, most effective drugs is available, free, on the CU website, www.CRBestBuyDrugs.org.

Plan with the greatest percentage increase in total cost

State (Zip Code) Plan Name % Increase in total cost $ Increase in total cost
California EnvisionRx Plus Gold 57% $1,867
Florida EnvisionRx Plus Gold 53% $1,771
Illinois Blue MedicareRx Standard 50% $1,287
New York EnvisionRx Plus Gold 60% $1,915
Texas Blue MedicareRx Standard

EnvisionRx Plus Gold





All numbers to the nearest percent and dollar

Plans with the greatest percentage increase in total costs which also reduced monthly premiums

State Plan Name $ Decrease in Monthly Premiums* % Increase in total costs* $ Increase in total costs*
California Bravo RxII 3 29% $812
Florida Bravo RxII 4 28% $798
Illinois Aetna MedicareRx Essentials 3 21% $722
New York Bravo RxII 1 31% $882
Texas Blue MedicareRx-Standard 3

50% $1,263

All numbers to the nearest percent and dollar