The report said employers and other organizations that drop their current coverage and pay a premium for retirees' Part D drug coverage would save 83 percent on drug costs over a 50-year period, the report said. In another option, employers that wrap their drug plans around Part D--in other words, supplement the Medicare benefit--could save from 31 percent to 49 percent of drug costs over that period, the report said. Even those firms that elect to keep their own drug plans and a receive a federal subsidy for maintaining the coverage could save between 18 percent and 41 percent, it added. The study estimated savings for several of the options that are available to Medicare drug plan sponsors, including: . maintaining their current drug benefit program and getting a 28 percent federal subsidy for doing so, . offering a wrap-around plan, or . terminating current drug coverage for Medicare-eligible retirees and paying retirees' Part D premiums. Costs were estimated for 50 years to yield results for use in preparing retiree health evaluations required by the Financial Accounting Standards Board and the Governmental Accounting Standards Board, according to the report, Estimated Impact of Medicare Part D on Retiree Prescription Drug Costs. "The Medicare Part D program is really going to have an impact on those groups with large numbers of Medicare eligible retirees with prescription drug coverage--state and county governments, older manufacturing companies, and schools," Kevin Dolsky, a SOA fellow, said in a news release accompanying the report. "This is a big deal for a lot of organizations," he said. "With an employed population, a company's drug costs may be 20 percent of the total health benefit cost, but with retirees, drug costs may be 50 percent of the total cost. It's a significant windfall." The study, conducted by Actuarial & Health Care Solutions LLC, assumed an annual increase in prescription drug costs of 8.5 percent, as well as an annual 3.33 percent increase in utilization. The report
is available at
http://www.soa.org/ccm/content/areas-of-practice/health/research/estimated-impact-of-medicare-part-d/
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