The Department of Health and Human Services (HHS) has announced that patients availing of medicare in the health insurance program's prescription drug benefit may have to pay lower premiums next year.
The agency expects average monthly premium for Medicare Part D at around $30 a month, going down from $30.76 in 2011.
The reason behind this, say HHS officials, is lesser competition and more usage of cheaper generic drugs.
The prescription drug benefit pays for medicines for seniors and disabled medicare patients who have availed of separate drug insurance plans and are clients of private insurers like Aetna Inc, Humana Inc, and UnitedHealth.
The gap between the premium paid by clients and the amount that insurers charge is paid out by the US government.
The lowering of the average creates ends up creating more risk for plans like Humana and UnitedHealth that have a significant portion of the Part D members, said a Wells Fargo analyst. He added that the reason behind lower bids could possibly be last year's joint venture between Humana and Wal-Mart Stores to offer Medicare drug coverage with the lowest premiums in the country.