Part D Premiums May Rise

Part D Premiums May Rise

President Bush has proposed legislation to increase prescription drug premiums for higher-income Medicare beneficiaries. The proposal was part of a broader package that is intended to rein in Medicare costs while advancing a larger private role in the health care system. Congress however is unlikely to approve the legislation, although with Medicare’s hospital insurance trust fund expected to run out of money by 2020, Congress will eventually need to consider such proposals.

The prescription drug proposal would create an income-linked system of premiums similar to the one already in effect in Medicare Part B. Prescription drug premiums would increase for any individual with income over $82,000 and any couple with income exceeding $164,000. Premiums would more than triple for many individuals with incomes over $205,000 and for many couples with incomes over $410,000. While current premiums vary by plan, the monthly premium for standard drug coverage is about $28 this year.

Initially, fewer than 5% of people with Medicare drug coverage would have to pay the higher premiums. But this proportion would grow because the income thresholds would remain the same, with no allowance for inflation.

Source: New York Times 2/16/08