New Study Finds Premium Growth Lowest Since 1997; Medicare Drug Premiums 40
Percent Lower Than Forecast
WASHINGTON, Jan. 9 /PRNewswire-USNewswire/ -- Health care spending
increases are moderating as consumers and employers take advantage of
health insurance plans' new generation of cost-saving strategies. That's
according to a new study of health care spending conducted by actuaries at
the Center for Medicare and Medicaid Services (CMS) and published today in
Health Affairs, and an updated estimate of the cost of the Medicare
prescription drug benefit released January 8, 2007 by CMS.
(Logo: http://www.newscom.com/cgi-bin/prnh/20040830/AHIPLOGO )
The health spending study found that "the rate of growth in U.S. health
care spending slowed for the third straight year in 2005" and that 2005
"was the third straight year that ... premium growth decelerated and the
slowest rate of growth since 1997." The slower rate of premium growth also
beat government estimates from 2006.
Karen Ignagni, President and CEO of America's Health Insurance Plans
(AHIP), said that a study conducted by PricewaterhouseCoopers, The Factors
Fueling Rising Healthcare Costs, noted a direct relationship between
consumers' enrollment in multi-tiered drug formularies and a slower rate of
growth of prescription drug spending. The CMS study echoed these findings
and found that prescription drug spending "continued a dramatic
deceleration" and that the recent slowdown was driven in part "by the
proliferation of tiered- copayment benefit plans, which slowed growth in
brand-name drug use ... "
Slower health care spending growth is being experienced in both the
public and private sectors. Government officials are now estimating that
the cost of the Medicare prescription drug plan will be much lower than
anticipated. The average premium paid by seniors decreased to $22 a month,
which is 40 percent lower than originally forecast. The combination of
robust competition among Medicare health plans and plans' cost-containment
strategies means the cost to taxpayers will be $113 billion less than
previously projected.
Ignagni said that Medicare health plans are employing many of the same
value-focused techniques that are working in the commercial market, such as
multi-tiered formularies that ensure consumers have access to the most
cost- effective prescription medicines.
"The Medicare prescription drug benefit continues to exceed
expectations as seniors experience lower than expected premiums and lower
out-of-pocket costs on their prescriptions," said Ignagni. "Most
importantly, seniors continue to express overwhelming satisfaction with
their new Medicare prescription drug benefits."
America's Health Insurance Plans - Providing Health Benefits to
More Than 200 Million Americans
SOURCE America's Health Insurance Plans
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Related links:
http://www.ahip.org
Photo Notes:
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CONTACT:
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Plans, +1-202-778-8494
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