Three Insurers Account for More Than Half of Drug Benefit Enrollment
More than 80 companies are offering more than 1,400 Medicare prescription drug plans nationwide, though insurers UnitedHealth Group, Humana and WellPoint account for 52% of total drug benefit enrollment, according to data released on Friday by the Bush administration, the New York Times reports. About 13.9 million Medicare beneficiaries are enrolled in prescription drug plans, and about 5.9 million beneficiaries are enrolled in Medicare Advantage plans, the Times reports (Pear, New York Times, 4/29).
UnitedHealth has a 27% market share, or 3.8 million beneficiaries, for PDPs, and a 20% market share, or 1.18 million beneficiaries, for MA plans, according to enrollment data as recent as April 18 (Lueck/Fuhrmans, Wall Street Journal, 4/29).
Humana has an 18% market share, or 2.44 million beneficiaries, in PDPs, and a 13% market share, or 792,500 beneficiaries, for MA plans (New York Times, 4/29).
The top 10 PDPs represent 80% of enrolled beneficiaries in those types of plans, according to a preliminary analysis by Avalere Health, a health care consulting firm (Carey, CQ HealthBeat, 4/28).
For MA Plans, Kaiser Permanente has the second-highest enrollment, with a 14% market share accounting for 821,500 beneficiaries (New York Times, 4/29). The top 10 MA plans represent 64% of enrollment for those plans, according to Avalere (CQ HealthBeat, 4/28).
UnitedHealth has the highest enrollment in 29 states, while Humana has the highest enrollment in 13 states. BlueCross BlueShield plans have the highest enrollment in six states.
Health consultant John Gorman, a former Medicare official, said UnitedHealth and WellPoint "are winning on brand recognition," whereas Humana and MemberHealth "are winning on price." He added, "The AARP brand is a license to print money. When seniors are confused and scared about making the wrong choice, brand recognition and trust go a long, long way."
UnitedHealth is offering the only AARP-endorsed drug plan (New York Times, 4/29).
Avalere President Dan Mendelson said UnitedHealth's "offering is pretty mainstream, honestly, but they come in with very solid name recognition both from AARP and from their local managed care presence." Humana, which marketed low-cost plans with premiums as low as $1.87 in some regions, "came in with a very innovative set of offerings," Mendelson said (Freking, AP/Arizona Daily Star, 4/29).
Mendelson said the "high degree of concentration among a relatively smaller number of plans ... means that these plans will probably be able to leverage better prices over some period of time [and] could help keep premiums low" (CQ HealthBeat, 4/28).
The Los Angeles Times on Monday examined how some beneficiaries "are still discovering new catches" in the drug benefit's "complicated inner workings -- details that can defy the scrutiny of even the most careful consumers."
According to the Times, some beneficiaries have enrolled in drug plans without realizing that their medications might fall under a system of coverage levels called "tiers." Plans typically divide prescription drug formularies into multiple tiers, with beneficiaries paying fixed copayments for lower tiers and a higher price -- such as a percentage of total drug cost -- for upper tiers (Alonso-Zaldivar, Los Angeles Times, 5/1).