Premiums for Medicare's prescription drug plans are expected to rise by about 4 percent next year, while Medicare Advantage rates will drop by 4 percent, a new analysis found.
Among the 10 most popular Medicare Part D prescription drug plans, some insurers are raising premiums more than others, according to a new analysis from the consulting firm Avalere Health.
The increases come in the wake of news that Medicare is spending far more on pharmaceuticals. That has led to an overall average premium increase of 4 percent for the 10 most popular plans.
For instance, UnitedHealth is raising premiums for its second-most popular plans by about $10 a month.
Another troubling trend for Part D is that the number of plans is dropping.
Next year, about 678 plans will be offered, compared with 886 in 2016, a 23 percent decrease.
The 10 most popular plans now represent more than 88 percent of Part D enrollment.
Avalere said Medicare Part D enrollees need to become savvy shoppers.
"Beneficiaries who choose not to change plans could see higher premiums in 2017," said Kelly Brantley, vice president at Avalere.
The Part D hikes come about a month after a federal report showed Medicare spending on pharmaceuticals increased by double digits in recent years. Medicare Part D spending was $121 billion in 2014, a 17 percent increase from 2013.
Medicare spent the most money on the revolutionary hepatitis C cure Sovaldi, with $3 billion for about 7,300 prescriptions in 2014. Sovaldi's high price tag of $1,000 a pill has been criticized frequently.
However, the analysis didn't take into account rebates or discounts provided by drugmakers to drive down cost, as those rebate amounts are not disclosed.
Meanwhile, Avalere said that things appear to be stable for Medicare Advantage, which allows seniors to buy a private health plan. The option has grown increasingly popular, with more than 30 percent of Medicare enrollees taking advantage of it.
The average premium will drop 4 percent next year to $31.40 a month.
About 78 percent of Medicare Advantage beneficiaries will have an option to pay no premium, compared to 81 percent in 2016.
Avalere crafted the report based on data from the Centers for Medicare and Medicaid Services, which oversees Part D and Medicare Advantage.