Cost of Medicares Part D drug plan is dropping

Even as health costs continue to rise, Medicare beneficiaries will see the average price of a Part D drug plan decline slightly next year, the Obama administration announced Thursday, offering some relief amid pressure to cut the federal health insurance program for the elderly.{{more}}

The Part D drug benefit, created under the George W. Bush administration, allows seniors and others on Medicare to sign up for a privately administered, government-subsidized health plan to get their prescriptions.

Popular with beneficiaries, the program has also proven far less costly than budget analysts originally expected, in part because of competition among private plans and the growing use of less expensive generic drugs.

In 2012, the average Part D plan will charge seniors about $30 a month, the Department of Health and Human Services said.

That’s down from $30.76 in 2011 and would mark the second time average premiums have declined since the drug benefit was initiated in 2006.

By comparison, overall healthcare spending in the U.S. is expected to grow by nearly 5% a year between now and 2014, according to the latest estimates by government actuaries. Premiums on many private medical insurance policies are rising even more sharply.

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