Medicare Part D premiums increase slightly, but spending still a problem

CMS announced a small jump in the average monthly premium in Medicare Part D prescription drug plans in 2017, up to $34.

The agency said the move showed premiums remain “relatively stable” following a nearly unchanged average premium of $32.50 in 2015 and 2016. While premiums haven’t shot up, the costs of the program have continued to increase.

“Stable Medicare prescription drug plan premiums help seniors and people with disabilities afford their prescription drugs,” CMS Acting Administrator Andy Slavitt said. “However, I remain increasingly concerned about the rising cost of drugs, especially high-cost specialty drugs, and the impact of these costs on the Medicare program.”

CMS pointed to the latest Medicare Trustees report, which said prescription drug costs continue to grow faster than other Medicare expenses and overall health spending. Spending per Part D enrollee is expected to increase 5.8 percent annually through 2025.

Fraud and abuse could be part of the reason for those increases, according to a separate report from the HHS’s Office of Inspector General (OIG). The report said spending on Part D drugs has increased annually by $10 billion, with more than $4 billion being spent on “commonly abused opioids.” Spending on compounded drugs has also spiked, particularly on compounded topical drugs, which have seen a 3,400 percent spending increase since 2006, which the OIG calls “monumental.”