76 Cents Worth of Good News

By PAULA SPAN

In a slightly desperate hunt for good economic news, I’ve come up with this small consolation: Average premiums for Medicare Part D, the prescription drug benefit, will not rise in 2012. In fact, they will fall slightly.

The last time this happened was in 2007, the year after Part D took effect. Insurers weren’t certain how to price the new benefit, so they had set the price high to protect their profit margins. They guessed wrong — the drug benefit continues to cost less than originally estimated, according to the federal Centers for Medicare and Medicaid Services — so premiums dropped sharply the following year. But each year since, they’ve crept up, by a buck here and three bucks there — until now, when the national average will drop to $30 from $30.76 a month next year. (Hey, I said it was small consolation.)

Even the comparatively small number of Medicare recipients with incomes of over $85,000 for an individual or $170,000 for a couple — at which point something called an income-related monthly adjustment amount kicks in — will see a little dip, to $11.60 a month from this year’s $12 a month, charged in addition to the monthly premium.

The main cost-control factor is Medicare’s heavy use of generic drugs, the agency says, along with competition, as insurers bid against one another to attract customers, plus the inflation-busting effects of lingering recession.

The other good Part D news is how many people in the infamous “doughnut hole” are getting some relief from the 50 percent discounts on covered name-brand drugs (and 7 percent on generics) that took effect this year. Through June, nearly 900,000 people had used the discounts, a number that will increase as the months pass, and each had saved $517 on average.

Of course, one might argue that small consolations are outweighed by the misery of falling into the doughnut hole, which won’t close completely until 2020, in the first place. Or outweighed by the fact that this is an average of many plans in many regions, so some people may actually find their 2012 Part D premiums rising slightly.

So it makes sense, as Medicare officials always caution, to evaluate those plans carefully before making a choice. The Part D enrollment period comes earlier than usual, too. It starts on Oct. 15 and ends Dec. 7.

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Paula Span is the author of “When the Time Comes: Families With Aging Parents Share Their Struggles and Solutions.”http://newoldage.blogs.nytimes.com/2011/08/18/76-cents-worth-of-good-news/?pagemode=print