Insurers are continuing to bid hard for Medicare Part D prescription drug plan business, but not quite as hard as they were bidding for Medicare drug plan business a year ago.
The Centers for Medicare and Medicaid Services (CMS) has given clues about insurers’ level of passion for Medicare drug plan business in a new report on the bidding process for the 2020 Medicare plan program.
(Related: Key Medicare Drug Plan Benchmark Price Falls)
The national average monthly bid amount for the 2020 Medicare drug plan program has fallen to $47.59, down 7.2% from the average for the 2019 program.
The average monthly base beneficiary premium fell to $32.74, down 1.4% from the 2019 average.
Insurers now see the Medicare plan market as an attractive market, because earnings on health insurance are not sensitive to changes in stock prices or interest rates, Medicare program rules and subsidies limit claim risk, and federal policymakers have made efforts to keep Medicare program rules and subsidies more stable than the federal rules and subsidies for insurers selling new individual major medical insurance.
Even though vigorous bidding has helped to push down key Medicare drug plan price indicators for 2020, the rate of decrease is lower than it was for the 2019 program year.
For the 2019 program year, the national average monthly bid amount was down 11%, and the average monthly base beneficiary premium was down 5.2%.
The Medicare Part D Drug Coverage Program
The Medicare plan annual enrollment period for 2020 coverage will start Oct. 15 and end Dec. 7.
President George W. Bush signed the bill that created the Medicare drug benefits program, the Medicare Modernization Act of 2003 bill, in 2003.