Medicare Drug Price Hikes Continue

Published May 31, 2016

Insurers offering the top ten most popular Medicare prescription drug plans raised prices by an average of 10 percent in 2010, according to a study by advisory services company Avalere Health.

Average premiums have risen to $34.30 so far this year, compared to $31.14 in 2009. The average brand name copayment jumped from $74.31 to $78.95, and average generic drug costs rose from $34.83 to $36.25. All the increases outpaced general price inflation.

Pro-Consumer Shift Advocated

According to Mark Kilmer, a senior fellow at the Maryland Public Policy Institute, the cost increases are no surprise.

“That’s the way things have been going recently. The cost of health care continues to go up at both the state and federal levels, where they are more interested in shifting the cost around instead of addressing the root causes,” said Kilmer. “Until then, you’re going to see premium rate increases.”

Kilmer says the federal government should allow the insured to make their own choices.

“Consumers need to have more control of their health care dollars. We’re looking for people to spend less money on health care and not expect bad outcomes. There aren’t many reforms at the state or federal level going the right way,” said Kilmer. “The Healthy Indiana Plan is a lone exception. In most states, they’re expanding Medicaid, like Massachusetts.”

Continued Cost Increases Expected

Shaun Fink, executive vice president of the Caesar Rodney Institute, says the U.S. health care system is trying to find a balance between cost and quality.

“Health care in America is better than anywhere else in the world. People come from all over the world because it’s the best in the world. Doctors in the nation have the freedom to get the very best as far as tools and medicine,” said Fink. “But we have a major cost problem.”

Fink says the price hikes will continue for the foreseeable future.

“Insurance companies are going to be government-run to the point where they are regulated so much, whatever they are mandated to do will run them in the red. Prices should increase in the immediate term, in part because insurers have to make as much money now while the system still allows them to,” said Fink.

Fink says President Obama’s health-care overhaul will not reduce costs.

“Is that going to be used by the proponents for universal health care as, ‘See? I told you this is what insurance companies do?’ Of course. Prices are going to go up, even after the recent reform,” said Fink. “We haven’t solved anything.”

Krystle Russin ([email protected]) writes from Texas.

Internet Resources

Avalere Health Study: