What a Difference a Year Makes

Since the passage of the Medicare Modernization Act, Gorman Health Group has been discussing the value that Medicare Advantage (MA) and Prescription Drug Plans (PDP) offer to both public sector and private sector employers for their Medicare eligible retirees.  The value proposition includes FASB/GASB benefits as well as more affordable coverage.  A number of employers have moved their retirees to these plans over the last seven years.  Some employers contract directly with a MA plan or PDP plan while other employers offer their retirees a choice of plans through a private exchange such as Extend Health. This has been a gradual movement.  However, during the last year, the shift has been very dramatic.  CMS enrollment data for August 2013 show that employer group enrollment in PDPs was 4.4 million which is more than double the 2 million employer group enrollment in August 2012.  Employer group enrollment in MA plans increased to 2.6 million in August 2013 compared to 2.4 million enrollment in August 2012.

One of the drivers of the PDP enrollment has been the repeal of the Retiree Drug Subsidy tax benefits in 2013.  The repeal provided an opportunity for private sector employers to review their coverage of retiree drug benefits and many concluded that the PDP was the best choice for both the employer and the retirees.  We expect this shift to MA and PDP plans to continue as more employers are moving their retirees to private exchanges.  The Wall Street Journal reported on September 9 that Time Warner has joined IBM in shifting retirees to Extend Health which is owned by Towers Watson & Co. to choose a Medicare plan.  Extend Health offers MA plans, PDPs and Medigap supplemental plans.  According to the Journal, Extend Health has 300 companies that use their private exchange and that one third of these employers joined this year.

Resources

We can help your PDP develop and implement efficient and compliant internal operations and prepare effectively for CMS audits with professional services and unmatched compliance tools. Visit out website to learn more.

Join us on Oct. 1 and hear  Gorman Health Group’s Chief Sales and Marketing Officer, RaeAnn Grossman, outline the components of a successful risk-adjustment program.