Medicare makes plans to profit

A Medicare Services office in New York City

TEXT OF STORY

John Dimsdale: Tomorrow begins the six-week open enrollment period for Medicare prescription plans. Seniors will be well-advised to look at the changes this year. A lot of premiums are going up. Here's John Dimsdale.


John Dimsdale: Washington consulting firm Avalere Health compared the Medicare prescription drug plans for next year. Premiums for the three most popular plans are going up an average 27 percent. That's faster than overall drug prices.

Avalere's Lindsey Spindle says these plans started out three years ago with generous benefits and low premiums to attract customers.

Lindsey Spindle: Now that they have solidified their customer base, they're trying to maintain their customers' loyalty, but they also have to achieve profitability.

Many plans are boosting patient co-pays and cutting benefits.

Medicare expert Marilyn Moon, at the American Institutes for Research, says insurance companies may be counting on seniors to stick with their existing plan.

Marilyn Moon: They don't like to change, and as a consequence many plans may find they don't have to offer the lowest possible prices.

Not all plans are raising premiums, so Moon says it pays to shop around.

In Washington, I'm John Dimsdale for Marketplace.

About the author

As head of Marketplace’s Washington, D.C. bureau, John Dimsdale provides insightful commentary on the intersection of government and money for the entire Marketplace portfolio.

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