Press Release             

Contact: Paul Precht
Director of Policy and Communications

August 14, 2009

Statement by Medicare Rights Center President Joseph Baker on CMS’s Announcement of Premium Rates and Low-Income Subsidy Benchmarks for Medicare Prescription Drug Plans

New York, NY – The Centers for Medicare & Medicaid Services has taken important steps to minimize disruptions in drug coverage and to ensure a choice of drug plans for low-income people with Medicare. As a result of CMS’s actions, low-income people with Medicare in all parts of the country will have a choice of at least four drug plans, and one million low-income people with Medicare will be able to keep their current zero-premium drug plan next year. CMS expects that there will be 800,000 low-income people who will be reassigned to a plan that qualifies for a full premium subsidy in 2010, less than half the number that would have had to be reassigned without CMS’s actions.

CMS is using its demonstration authority to base the low-income premium subsidy benchmark for drug coverage on the actual average cost of providing drug coverage under both stand-alone prescription drug plans and drug plans offered by private Medicare “Advantage” health plans, like Medicare HMOs. Because the benchmark is now based on actual bids made by Part D plans and Medicare Advantage plans that offer drug benefits, and no longer includes the impact of subsidies to Medicare Advantage plans, the benchmark is higher, thereby allowing more choice of Part D plans to all Medicare consumers. The Medicare Rights Center, and other consumer advocacy organizations, had urged that CMS adopt this methodology in recommendations made to the Obama administration.

The Medicare Rights Center will continue to help educate and counsel Medicare consumers to ensure they receive affordable drug coverage that meets their needs in the coming year.

- end -

Medicare Rights Center is a national, nonprofit consumer service organization that works to ensure access to affordable health care for older adults and people with disabilities through counseling and advocacy, educational programs, and public policy initiatives.


520 Eighth Avenue, North Wing, 3rd Floor  ∙  New York, New York  10018
1224 M Street, NW, Suite 100  ∙  Washington, D. C. 20005  ∙