Prescription drug spending increased nearly 13 percent in 2014, the highest since 2002, according to the Centers for Medicare and Medicaid Services (CMS). And while CMS is still projecting an average 5.8 percent growth in national health expenditures over the next ten years, the government agency projects that the average premium for a basic Medicare Part D prescription drug plan next year will hold steady at about $32.50 a month.
This is good news for seniors and other Medicare beneficiaries, as the average Medicare Part D monthly premium has been between $30 and $32 for the past five years, and especially since Part D costs per capita increased by nearly 11 percent last year. CMS believes high-cost specialty drugs had a ripple effect on spending in the catastrophic benefit phase, causing the spike in Part D costs per capita.
Keeping prescription medications affordable for Medicare beneficiaries is part of the Department of Health and Human Services’ (HHS) mission to achieve better care, smarter spending, and healthier people. As the Affordable Care Act (ACA) closes the Part D “donut hole,” Medicare beneficiaries are saving money on out-of-pocket drug costs. According to HHS, since 2010, more than 9.4 million seniors and people with disabilities have saved over $15 billion on prescription drugs, an average of $1,598 per beneficiary.
CMS additionally noted the Medicare Trust Fund will likely stay solvent for the next 15 years, through 2030. This period of time is 13 years beyond earlier 2009 predictions which precede implementation of the ACA.
CMS bases the 2016 projection on bids submitted by drug and health plans for basic Part D drug coverage, calculated by the CMS Office of the Actuary. The stable premium and better overall healthcare is good news for the Trust Funds, great news for taxpayers, and even better news for people with Medicare.