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Medicare Blog | Medicare News | Medicare Information

Medicare spending at its lowest in 50 years

Posted by Guadalupe Cantu on Fri, Aug 02, 2013 @ 09:32 AM

Medicare Supplements In 2014, Medicare Part D premiums will reach $31, an increase from the past 3 years of $30. By 2014, Part D deductible will fall to $310 from the current $325.

When the Medicare Part D program began, there was a lot of concern the cost of the program would go up. Instead, the program has had the opposite effect and the cost has been kept low. Much of it is due to the strong competition and bidding parocess from the participating private insurers, according to Jonathan Blum, deputy administrator and director for the Center of Medicare.

Medicare has saved more than 6.6 million people, more than $7 billion on prescription drugs, and averaging $1,061 per beneficiary.

This is largely due to the government reaching out to pharmaceutical industry and bargaining for drug discounts. In order to participate in the 2013 Medicare program, the pharmaceutical industry agreed to a 52.5% discount on name brand drugs and 21% on generic ones. This savings has been passed on to the seniors. However, higher spending could be triggered for discounted premium drugs, cautioned the governments Medicare watchdog.

In March, The Medicare Payment Advisory Commission reported that Medicare's reinsurance payments are the fastest-growing component of Part D spending. Hence, the higher-cost and demand for specialty brand drugs for cancer treatment, which are not available on generic brands. These name brand drugs add to the cost of the reinsurance cost of the Part D program. However the gap that begins when a person’s Part D Coverage reaches $2,970 will close by 2020.

Blum also assured that seniors who reach the gap will ultimately benefit from the program because when the patient takes their medication, they will likely be healthier and may not require hospitalization.


Please give us your feedback!
What do you think of Medicare Part D program? Should there be a concern of seniors over spending on brand name drugs?

 

Source: LifeHealthPro

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Tags: Health Insurance, Medicare, senior insurance market news, Medicare Part D, Mutual of Omaha Medicare Supplement, UnitedHealthcare

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