Medicare Part D Prescription-Drug Program: Companies Ready for Massive Marketing Push

As the federal government's Medicare Part D prescription-drug program gears up for its official launch on October 1, health insurance companies have been prepping their marketing efforts to reach millions of elderly and disabled Americans. Top companies, including Aetna Inc., Cigna Corp., and WellCare Health Plans Inc., have been cleared to offer stand-alone prescription-drug plans, with Coventry Health Care Inc. being the 10th company to join the list of approved providers. These companies have established partnerships with Medicare Supplement insurance carriers and brokers, aiming to provide coverage to Medicare beneficiaries representing over 1 million Medicare Supplement policies in force today.

Key Takeaways:

• 42 million elderly and disabled Americans currently have health insurance coverage under Medicare.
• 10 companies, including Coventry Health Care Inc., have been cleared to offer stand-alone prescription-drug plans.
• Aetna Inc. will offer three Part D prescription-drug plans, including a zero-premium option that combines a Medicare Advantage plan with Medicare Part D coverage.
• Cigna Corp. has teamed up with NationsHealth to jointly deliver its national prescription-drug plans, including a no-deductible plan and one that provides increased coverage for generic drugs through the "coverage gap."
• PacifiCare Health Systems Inc. will offer three plans, including a no-annual deductible plan, with premiums ranging from $19.02 to $34.88.
• Humana Inc. will offer the stand-alone plans in 46 states and the District of Columbia, all of the states in which it applied.
• WellCare Health Plans Inc. said its prescription-drug plans wouldn't have any deductibles, and premiums, which range from $17.13 to $54.21, "are among the lowest cost nationally."
• Companies are expected to launch massive advertising campaigns to seniors on October 1, with enrollments beginning on November 15, and coverage taking effect on January 1, 2006.
• The contract awards suggest that publicly traded managed care companies "should be positioned to dominate market share position in Part D," according to a senior managed care analyst with JPMorgan Securities.

Statistics:

• 42 million: the number of elderly and disabled Americans currently with health insurance coverage under Medicare.
• 10: the number of companies cleared to offer stand-alone prescription-drug plans under the Medicare Part D program.
• $50.48: the highest monthly premium offered by Coventry Health Care Inc.'s AdvantraRx Premier plan.
• $25.19: the lowest monthly premium offered by Coventry Health Care Inc.'s AdvantraRx Value product.
• 4% to 5%: the expected increase in average earnings per share for publicly traded managed care companies in 2006, according to JPMorgan Securities.
• 1 million: the number of Medicare Supplement policies in force today that will be covered under the new prescription-drug plans.
• 46: the number of states in which Humana Inc. will offer the stand-alone prescription-drug plans.

Sources:

• A. M. Best Company, Inc.
• Coventry Health Care Inc.
• Aetna Inc.
• Cigna Corp.
• PacifiCare Health Systems Inc.
• Humana Inc.
• WellCare Health Plans Inc.
• JPMorgan Securities