Part "D" costs to go up in 2007

Feds announce Part D cost increases for 2007

The Center for Medicare & Medicaid Services (CMS) has announced the increased costs for the Standard Part D parameters that will take effect in January 2007.

2007 will see the following changes:

* Deductible will go up from $250 to $265.

* Beginning of coverage gap ("donut hole") will go up from $2,250 to $2,400 in total drug cost.

* End of coverage gap ("donut hole") will go up from $5,100 to $5,451.25.

The amount of money a Medicare recipient will have to spend out of their own pocket on drugs to get out of the coverage gap and begin receiving the 95% "catastrophic" coverage will go up from $3,600 to $3,850 for the year.

The law requires CMS to increase the cost of the deductible and the beginning/ending of the coverage gap each year based on the increase in drug spending by Medicare beneficiaries in the previous year -- a rate much higher than the Consumer Price Index. The new rates for 2007 are an increase of 6.8%. The Consumer Price Index, which measures overall inflation/price increases (and is used in determining Social Security and other cost-of-living increases) for the same period will be only 1.81%

Real Medicare drug benefit needed now!

Less than 4 months into the private Part D drug plan, it's official -- a bad deal is going to get worse next year and every year after.

Recent studies have shown that compared to the cost of the private Part D plan, a Medicare run drug benefit with negotiated lower drug prices could provide 100% of recipients drug costs -- with no premium, deductible, coverage gap -- and still have a surplus of $40 billion over the first 7 years.

It's time for Congress to fix this private Part D disaster and create a real drug benefit run by and through Medicare with negotiated lower drug prices.

Steve Pittman

Illinois Alliance for Retired Americans

1634 W. Van Buren, Chicago IL 60612

312-243-6296 [phone]

312-243-9532 [fax]