The average Medicare Part D prescription drug benefit premium for calendar year (CY) 2017 is projected to be $34 per month. The projection is based on bids submitted by Part D drug and health plans for basic drug coverage for the 2017 benefit year and calculated by the independent CMS Office of the Actuary. The projection represents an increase of approximately $1.50 over the actual average premium of $32.56 in CY 2016. CMS anticipates releasing the premiums and costs for Medicare health and drug plans for CY 2017 in mid-September 2016.
This stability in average basic Medicare Part D premiums comes despite the fact that Part D costs continue to increase faster than other parts of Medicare, largely driven by high-cost specialty drugs and their effect on spending in the catastrophic benefit phase. For instance, the most recent 2016 Medicare Trustees report to Congress noted that Medicare Part D expenditures per enrollee are estimated to increase by an average of 5.8 percent annually through 2025, higher than the combined per-enrollee growth rate for Medicare Parts A and B (4.0 percent) (see Medicare Board of Trustees issues 51st report to Congress, Health Law Daily, June 3, 2016).
CMS simultaneously released the CY 2017 Part D national average monthly bid amount, base beneficiary premium, and information on the income-related monthly adjustment amounts for enrollees in prescription drug plans who have incomes above certain threshold amounts. For CY 2017:
- The national average monthly bid amount is $61.08.
- The Part D base beneficiary premium is $35.63.
The income-related monthly adjustment amounts for beneficiaries who file individual tax returns with the following incomes are as follows:
- Less than or equal to $85,000 – $0.00.
- Greater than $85,000 and less than or equal to $107,000 – $13.30.
- Greater than $107,000 and less than or equal to $160,000 – $34.20.
- Greater than $160,000 and less than or equal to $214,000 – $55.20.
- Greater than $214,000 – $76.20.
For beneficiaries who file joint tax returns the income amounts above are doubled with the income-related monthly adjustments remaining the same. In addition, the monthly premium rates for beneficiaries who are married, but file separate returns, are as follows:
- Income less than or equal to $85,000 – $0.00.
- Income greater than $85,000 and less than or equal to $129,000 – $55.20.
- Income greater than $129,000 – $76.20.
CMS also released the CY 2017 regional low-income premium subsidy amounts, the Medicare Advantage (MA) regional preferred provider organization benchmarks, and the MA Employer Group Waiver Plan (EGWP) regional payment rates.
