Cost of Medicare Rx Benefit Drops, CMS Says

The Medicare Part D prescriptiondrug benefit will not take effect untilJanuary 1, 2006, but federal officials arealready predicting that the averagemonthly premiums paid by seniors participatingin the program will be at least13% lower than originally expected.

Thanks to "robust competitionamong drug plans" offering the newdrug benefit for seniors, the averagemonthly premium charged to Medicaidrecipients will be $32.20—"about$5 less per month than previously estimated," Centers for Medicare andMedicaid Services (CMS) officials said.

There is even better news: competitionamong prescription plans will lowerthe cost of the program to the governmentby another $15 per month foreach beneficiary. This change willamount to "billions of dollars in reducedcosts to taxpayers in the first year of theprogram," Medicare officials said.

According to CMS, prescription drugplans offering the new Medicare benefit"can reduce their costs below the averageby taking steps, such as effectively negotiatinglower prices for drugs, by encouragingthe use of generic drugs?and byhelping physicians and patients avoidmedications that are contraindicated orthat may cause costly errors."

Mr. Rankin is a freelance medical writer.