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 March 24, 2005
Big Insurance Firms Expected to Offer Medicare Drug Coverage
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A substantial number of big insurance companies plan to offer prescription drug coverage to Medicare beneficiaries next year, in a move that defies insurance experts' predictions.

Some companies intend to offer the new benefit nationwide. Others will offer it in certain states or regions, The New York Times reported. Although it is unclear how many of the 41 million Medicare beneficiaries will enroll, it now appears clearer that most will have access to the new drug coverage, which goes into effect in 2006, from commercial insurers, Blue Cross and Blue Shield plans, and pharmacy benefit managers.

John K. Gorman, a former Medicare official who is now a health care consultant, told the Times: "It seems as if the dam broke in January. Ninety days ago, everybody was on the fence. In January, many insurers and pharmacy benefit managers completed their feasibility studies, and green lights started popping off all over the country. We now see widespread interest in offering a prescription drug plan to Medicare beneficiaries."

There were several reasons companies decided to stake out positions in the Medicare market, the newspaper reported: the need to remain competitive as the population ages, the promise of government subsidies to minimize financial risks, and an obligation to help make the new law work.


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