Part D Low-Income Enrollee Shifts: United May Lose 650,000 Members In 2008
Executive Summary
Next year UnitedHealth Group may lose 650,000 of the auto-assigned low-income members currently enrolled in its stand-alone Medicare prescription drug plans
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Part D growth through MA plans
Membership in Medicare Advantage drug plans increased approximately 6 percent to 8 million following the 2008 open enrollment period, according to CMS enrollment data. Enrollment in stand-alone Medicare prescription drug plans rose by about 1.2 percent to 17.4 million. The largest gain in the MA-PD market was recorded by Humana, adding 92,000 to a total of 1.2 million, based on an analysis of enrollment numbers by Avalere Health. Market leader UnitedHealth added 21,600 MA-PD members for a total of approximately 1.3 million. However, UnitedHealth lost nearly 600,000 stand-alone PDP members in 2008 (to 4.1 million) and Humana lost about 290,000, to 3.2 million. Due to premium increases, United predicted it would lose up to 650,000 low-income PDP members in 2008 (1"The Pink Sheet," Oct. 1, 2007, p. 12). Humana also had forecast losses based on higher premiums (2"The Pink Sheet," Oct. 8, 2007, p. 18)...
Part D growth through MA plans
Membership in Medicare Advantage drug plans increased approximately 6 percent to 8 million following the 2008 open enrollment period, according to CMS enrollment data. Enrollment in stand-alone Medicare prescription drug plans rose by about 1.2 percent to 17.4 million. The largest gain in the MA-PD market was recorded by Humana, adding 92,000 to a total of 1.2 million, based on an analysis of enrollment numbers by Avalere Health. Market leader UnitedHealth added 21,600 MA-PD members for a total of approximately 1.3 million. However, UnitedHealth lost nearly 600,000 stand-alone PDP members in 2008 (to 4.1 million) and Humana lost about 290,000, to 3.2 million. Due to premium increases, United predicted it would lose up to 650,000 low-income PDP members in 2008 (1"The Pink Sheet," Oct. 1, 2007, p. 12). Humana also had forecast losses based on higher premiums (2"The Pink Sheet," Oct. 8, 2007, p. 18)...
Tighter Part D formularies
CMS' 2008 Medicare Part D plan bidding methodology appears to be generating more restrictive formularies for low-income members, UnitedHealth Group exec Simon Stevens comments during United's third quarter earnings call Oct. 18. "Some of the low-income members are about to be switched to alternative plans whose drugs the formulary excludes altogether - some of the top branded medicines that their physicians are currently prescribing them," he said. Each year, low-income beneficiaries eligible for Medicare subsidies are automatically assigned by CMS to plans with premiums below a certain benchmark. United may lose up to 650,000 low-income Part D members in 2008 as a result of the bidding process (1"The Pink Sheet" Oct. 1, 2007, p. 12). In response to tightening margins in 2008, United chose to raise its premiums, rather than limit its formularies, Stevens indicates...