updated 8/15/2006 9:24:45 PM ET 2006-08-16T01:24:45

The average monthly premium for people participating in the Medicare drug benefit will remain at about $24 in 2007, but could easily go lower, the Bush administration said Tuesday.

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The projection follows the government's review of bids from insurance companies that will seek to offer drug coverage next year through Medicare. The bids reveal the insurance company's anticipated costs for each beneficiary who participates.

Medicare officials said the average total premium per beneficiary this year — including the government's contribution — came to about $92 a month. The bids show the average total per month will drop to about $80 next year, officials said.

The government covers about three-quarters of the program's expense. Beneficiaries pay the remainder, unless they qualify for extra help. Whether monthly premiums drop next year will also depend upon the choices made by plan participants.

"Bids are down because of strong competition," said CMS Administrator Mark McClellan. "If beneficiaries once again choose less costly plans, we will actually see premiums go down on average in 2007."

The drug benefit began Jan. 1. Under the program, beneficiaries in most states have 40 or more plans to select from. Beginning Nov. 15, the nation's seniors and disabled will have another chance to enroll in the program, or switch plans.

McClellan would not say whether fewer plans would be offered next year. He said many details about the offerings next year won't be known until more analysis is done.

He said that about seven out of eight beneficiaries getting extra help with their drug costs will be able to stay in their current plan and pay no monthly premiums next year. The agency will work with the remaining beneficiaries to find plans that also offer coverage with no monthly premiums.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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