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1 in 3 Medicare Part D Enrollees Select Medicare Advantage Drug Plans for 2009

WASHINGTON, Feb. 24 /PRNewswire/ -- More than nine million people, or 34 percent of all Medicare Part D enrollees, currently receive their prescription drug benefit through Medicare Advantage plans with prescription drug coverage (MA-PD plans), says new analysis by Avalere Health.

Using just released data from the Center for Medicare and Medicaid Services and its own proprietary DataFrame(R) database, Avalere researchers analyzed 2009 Medicare Part D open enrollment data to assess shifts in marketplace trends. Enrollment in all types of MA-PD plans grew for 2009, picking up about 730,000 people relative to mid-2008 levels, while total enrollment in standalone prescription drug plans, or PDPs, increased by about 140,000 individuals over the same period.

"MA plans have increased in popularity for 2009, undoubtedly as seniors sought low upfront premiums and great predictability in out of pocket spending," said Bonnie Washington, a vice president at Avalere Health. "By signing up for managed care, many beneficiaries were willing to forgo physician choice for lower cost - a sign that the economy played a stronger role in plan selection this year."

CVS/Caremark and Coventry Healthcare were among the biggest gainers of beneficiaries in the PDP market. In the case of Coventry, two developments significantly increased its enrollment. First, its low premium, enhanced benefit option - AdvantraRx Value - held premiums low while many competitors raised their premiums. Second, Coventry expanded its reach into the low-income subsidy (LIS) market by offering $0 premiums to LIS beneficiaries through its First Health PDPs in 46 states, 15 more states than last year. As a result, the company picked up more than 600,000 people in its 2009 PDPs compared to mid-2008 levels. CVS/Caremark also benefited from auto-enrollment of low-income beneficiaries for 2009 and completion of its acquisition of Long's Drug Stores near the end of 2008.

United Healthcare solidified its market leader status by claiming the number one and two most popular PDPs, partly through its ability to serve automatically assigned LIS beneficiaries in more states for 2009. Humana, who raised its PDP premiums by 60 and 63 percent, lost 31 percent of its PDP enrollment relative to mid-2008 levels.

"Economic forces are reshaping Medicare," said Washington. "Many beneficiaries appeared to vote with their feet by moving to drug plans with cheaper premiums, as there was a strong correlation between premiums and plan selection. The government was also protected by automatic switching of many low-income beneficiaries to the less expensive plans. Medicare beneficiaries are typically on a fixed income and will likely be looking for these kinds of savings going forward as well."

Avalere Health uses its DataFrame database to track trends in the Medicare Part D marketplace. Launched in 2006 in concert with the first year of the drug benefit program, DataFrame can be used to analyze plans, product placement, cost-sharing, benefit structure and other items that can impact beneficiary experience and commercial business performance.

SOURCE Avalere Health
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