Part D Premium for 2007: Just the Facts, Please

I‘ve been reading in newspapers around the country that the average monthly premium for a Medicare Part D plan for next year will be only $24.  This information was contained in a CMS press release.  But in this document, which appears to be the official explanation of what Part D will cost enrollees and the government next year, that figure nowwhere appears.  Instead, the document says:

• The national average monthly bid amount for 2007 is $80.43.

Under the “Medicare Demonstration to Limit Annual Changes in Part D Premiums Due to Beneficiary Choice of Low-Cost Plans,” as approved on August 14, 2006, the national average monthly bid amount is a composite of (i) a weighted average calculated using the 2006 weighting methodology and (ii) a weighted average calculated based on actual plan enrollments. In 2007, 80% of the national average monthly bid amount will be based on the 2006 averaging methodology and 20% will be based on the enrollment-weighted average. For determining the enrollment-weighted average bid, Part D enrollees (in stand-alone prescription drug plans and in Medicare Advantage drug plans) from the reference month of June 2006 are used.

• The Part D base beneficiary premium for 2007 is $27.35.

The base beneficiary premium is equal to the product of the beneficiary premium percentage and the national average monthly bid amount. The beneficiary premium percentage (“applicable percentage”) is a fraction, with the numerator of 25.5 percent; and a denominator which is 100 percent minus a percentage equal to (i) the total reinsurance payments that CMS estimates will be paid for the coverage year, divided by (ii) that amount plus the total payments that CMS estimates will be paid to Part D plans that are attributable to the standardized bid amount during the year, taking into account amounts paid by both CMS and enrollees.

Will someone please be so kind as to explain to me what all that means, and whence comes that $24 figure?