Published Online: Thursday, February 1, 2007

Many Medicare patients who signed on with the lowest cost Part D prescription drug plans last year are facing steep increases this year, while others are seeing their monthly out-of-pocket premium charges shrink for 2007.

These yo-yo premiums—the latest wrinkle in the continuing litany of concerns surrounding the year-old Part D prescription drug benefit—drew nationwide attention when the provider of the least expensive drug plans, Humana, increased monthly premiums for >2 million enrolled seniors by an average of 60%, effective January 1, 2007.

Actually, those facing only "average" premium hikes are the lucky ones. Massachusetts Medicare patients enrolled in Humana's low-cost ($7.32 per month) plan have been hit with premium hikes of 130% (to $16.90), and seniors in several Midwestern states received increases of 466%. At the same time, however, the cost for Humana's low-cost "standard" Part D coverage is going down in 3 states— Georgia, Louisiana, and South Carolina.

Other plans, including those sponsored by AARP, imposed much smaller premium increases for 2007, leading consumer activists to accuse Humana of "bait-and-switch" Part D pricing practices. For their part, however, officials at Humana said that the increases were justified, and that, even at the higher rates, its Part D premiums rank among the lowest of all plans in most states.

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