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CMS revises Part D cost estimates

Physician Practice Advisor, February 8, 2006

Medicare's new Part D drug coverage will have significantly lower premiums and lower costs to taxpayers than originally estimated, according to a press release by the Centers for Medicare & Medicaid Services (CMS).

According to the CMS Office of the Actuary, beneficiary premiums are now expected to average $25 a month-down from the $37 projected in last July's budget estimates-and the overall cost to taxpayers for 2006 will drop 20% over the July 2005 estimate. The savings result from lower expected costs per beneficiary; projected enrollment in the drug benefit has not changed significantly, according to the press release.

The net cost to the federal government for the drug coverage in 2006 is expected to be $30.5 billion, down from a previously estimated $38.1 billion.

The Part D drug program has drawn criticism for its January 1 start, including recent complaints that the Social Security Administration is having difficulty keeping up with the volume of work created by the new drug benefit and may have to cut some services, according to the Los Angeles Times.

Click here to read the CMS press release and here to read the Los Angeles Times article.

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