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Seniors with Medicare will have to pay a little more for their prescriptions, but benefits will improve overall, federal health officials announced Wednesday.

The average monthly premium charged by prescription plans will rise to $30 in 2011, an increase of $1, or about 3%.  Simultaneously, the new health care law will cut the cost of brand name drugs by 50% and generic drugs by 7%. According to USA Today, about 27 million Medicare beneficiaries are signed up for the prescription benefit, delivered by private insurers.

"These very modest increases in premiums, along with the new discounts ... are going to make medications more affordable to Medicare beneficiaries," Medicare administrator Don Berwick told the Associated Press.

The decrease in drug costs is intended to help seniors who experience a gap in coverage. Medicare recipients fall into a "doughnut hole" when they’ve exceeded the dollar limit for basic coverage and the new prescriptions do not meet the maximum price requirement for coverage by such insurance.

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“Most Medicare drug plans have a coverage gap,” the Centers for Medicare and Medicaid Services explained in a June press release. “This means that after you and your plan have spent a certain amount of money for covered drugs, you have to pay all costs out-of-pocket for your drugs (up to a limit).”

The pain in Medicare recipients’ pockets could have been worse. In June, President Obama signed a $6.4 billion bill into law that would postpone a 21% cut in Medicare reimbursements through November. Had the cut been initiated, many physicians would have had to increase their prices for doctor’s visits or deny Medicare coverage entirely.

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