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Medicare Drug Plan Enrollment

By April 3, 2017Commentary

When Medicare finally added drug coverage for beneficiaries via Part D, it did so through a purely private drug plan option.  There is no fee-for-service arm for drug coverage.  Beneficiaries in Medicare Advantage usually have drug coverage included when they enroll.  A new Mark Farrah Associates report analyzes enrollment in the stand-alone Medicare drug plans.   (MFA Report)   These stand-alone plans provided drug benefits to 25.1 million Medicare beneficiaries as of March 1, 2017, a gain of 1.85 from the year earlier.  43.2% of beneficiaries are in a drug plan, down slightly from 2016.  4.4 million of these members are in employer group plans, primarily for retirees.   Combined with Medicare Advantage enrollment, probably almost 70% of beneficiaries have drug coverage.  Many that don’t are younger and healthier, so there is some adverse selection.

Ten firms control 93% of the market, each having over 300,000 members, and 6 have 87% of the market with a million or more beneficiaries enrolled.  CVS Caremark has the largest number of members at 5.28 million or 22% of the total.  UnitedHealth is not far behind, with 5.22 million enrollees and 21.4% of the market.  Humana has 4.71 million members and registered the greatest growth, gaining 367,000 people in the year.  There is a pretty big drop off from there to Express Scripts at 2.67 million and Aetna at 1.94 million.  Aetna did have good growth at 6.7%, while CVS went up 4.6% and UnitedHealth 2.9%.   As it did in Medicare Advantage, Cigna lost stand-alone drug plan members.  Enrollment increased in all but four states and DC, with he greatest gains in Texas and California.  The report suggests that drug coverage is fairly popular among fee-for-service Medicare beneficiaries.

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