The Centers for Medicare and Medicaid Services has released its projections for average basic monthly premiums for standard Medicare Part D coverage in 2022, which the agency expects will be about $33 — a 4.9% increase from the $31.47 average premium in 2021.
The projected average basic premium is calculated based on plans’ expectations of per capita drug spending in the coming year. CMS anticipates releasing the final 2022 premium and cost-sharing information for 2022 Medicare Advantage and Part D plans in mid-to-late September.
WHAT’S THE IMPACT
CMS releases the projected average basic monthly premium annually — calculated based on plan bids submitted to the agency — to help beneficiaries understand overall premium trends before open enrollment, when they can select from plan options for the upcoming benefit year.
The Medicare Part D was established to help people with Medicare pay for both brand-name and generic prescription drugs. It remains one of Medicare’s more popular programs, with more than 48 million Medicare beneficiaries enrolled for prescription drug coverage.
CMS said it continues to analyze changes to the Part D program, and engage with stakeholders to identify opportunities for reducing costs in particular.
Driving down prescription drug costs remains a priority for the Biden Administration. Earlier this month, President Biden signed an executive order that was intended to increase competition, reduce drug costs and reduce price gouging.
As part of the announcement, CMS is also releasing other information — such as the Part D national average monthly bid amount — to help Part D plan sponsors finalize their premiums and prepare for Medicare open enrollment. Medicare open enrollment for coverage beginning January 1, 2022 will run from October 15 to December 7, 2021.
THE LARGER TREND
Biden’s executive order this month was broad in its attempts to reduce drug costs, taking the stance that high prescription drug prices are in part the result of lack of competition among drug manufacturers; the order encourages the FTC to ban “pay for delay,” a system in which drug manufacturers pay generic manufacturers to stay out of the market.
The practice has raised drug prices by $3.5 billion per year. Research also shows that “pay for delay” and similar deals between generic and brand-name manufacturers reduce innovation, the order said.
The president also directed the Food and Drug Administration to work with states and tribes to safely import prescription drugs from Canada, pursuant to the Medicare Modernization Act of 2003; directed HHS to increase support for generic and biosimilar drugs; and directed HHS to issue a comprehensive plan within 45 days to combat high prescription drug prices and price gouging.
Source: Healthcare Finance
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