Seniors to reassess health to avoid facing premium hikes

Seniors and disabled using the most popular type of Medicare prescription coverage-a stand-alone drug plan, will face significant premium increases next year unless they switch to more economical plans, the Centers for Medicare & Medicaid Services (CMS) declared today.

Earlier according to the announcement made by the Bush administration the Medicare prescription premiums were to stay the same at $24 per month. However, two weeks later a new analysis by congressional Democrats indicated that for a majority of middle-class seniors the premiums will rise to an average of $29 per month.

Thus, the Democratic analysis revealed that the average premium for all Medicare stand-alone plans would rise from $25.69 per month in 2006 to $29.09 in 2007, giving a 13 percent jump that’s well above the inflation level.

Leading drug companies in the U.S. had been providing prescription medicines at little or no cost to people whose incomes were under a certain level. Though the drug companies will continue to help, but they will no longer offer it to persons who are on, or eligible for, the Part D drug plan.

Medicare is also set to cut its monthly subsidy by 15 percent, to $80 a person, disclosed Medicare official Peter Ashkenaz.

For seniors with good company retirement plans or sufficient assets, Medicare still promises yearly savings under the part D drug plan. But for those elderly Americans who subsist mostly on Social Security, the drug plan actually is costing them more for drugs.

Incidentally, a person who formerly got all his medications free now has to pay between 15-25 percent of the total cost of the drugs. This percentage of the total cost might in some cases be $150-200 a month.

According to healthcare analyst Dan Mendelson, the changing premiums portend a new reality for Medicare beneficiaries. Until now the program offered a standard government-issue benefit for all. However, with the expanding role for private insurers, that's not the case anymore. "Seniors are going to have to constantly reassess their coverage relative to their own health status and relative to what choices are being offered in the marketplace”, he said.