Medco Life Is One Of Five Insurers Bidding For Nevada Rx Program
Executive Summary
Merck-Medco's insurance subsidiary Medco Life is one of five insurance companies bidding on the contract to manage Nevada's new Seniors Rx Insurance program.
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Merck-Medco's insurance subsidiary Medco Life is one of five insurance companies bidding on the contract to manage Nevada's new Seniors Rx Insurance program. In addition to Medco, four other companies have made proposals to run the Nevada program: MatureRx of Nevada, Pharmaceutical Care Network, Sierra Health and Activa. Medco Life is a newly formed subsidiary of the Merck pharmacy benefit management division. Medco's creation of the new insurance company to handle drug coverage and its bid for the Nevada contract represent the next milestones in the company's evolution into a risk-bearing entity capable of administering insurance programs for pharmaceutical purchases under Medicare. Medco informed Rep. Thomas (R-Calif.) in June that it would be willing to provide private drug coverage for Medicare beneficiaries. The announcement was timed to coincide with the legislative progress of Thomas' HR 4680, countering criticism that no insurers would be willing to participate in such a plan. Thomas' plan is similar to a proposal that Medco had floated earlier (1 (Also see "Merck-Medco Assures Congress It is Ready To Insure Drug Coverage" - Pink Sheet, 26 Jun, 2000.)). The Nevada program was created to provide low-income elderly residents of the state with access to comprehensive drug coverage. During the recent debate on Thomas' "Medicare Rx 2000" bill, Rep. Berkley (D-Nev.) cited Nevada's program, which at that point had not received any insurer bids, as an example of how unlikely it would be for the Thomas plan to attract participants. Nevada represents an attractive market for Medco to test its insurance products; the company operates a large mail-order facility in the state. Medco's constituent relationship with the Nevada legislature could help secure a more sympathetic hearing if unexpected liabilities arise from the Nevada program. Medco maintained Sept. 1 that "if chosen to administer [Nevada's] program, it would be a financially viable business for Merck-Medco." |