Projected Cost Analysis of Potential Medicare Pharmacy Plan Designs

Research Projects – Health


What is the cost of providing a prescription drug benefit plan for Medicare enrollees? The following research report: Projected Cost Analysis of Potential Medicare Pharmacy Plan Designs, sponsored by the Society of Actuaries Health Section and Health Practice Area, explores this important and pressing issue that has been the subject of recent front page headlines. The study, which was conducted by Reden and Anders, estimates and compares the current costs of providing prescription drug coverage for approximately 30 representative benefit plans. Further, for two of the plans, the study forecasts these costs over the next 10 years. Of equal importance, the study points out the myriad of factors that can impact these costs now and in the future to better inform readers comparing proposals currently under consideration by Congress.

For health practitioners, the report also contains a series of prescription drug cost continuance tables based on the data used in the study. Practitioners can use the tables to estimate figures such as the per member per month cost of providing coverage for generic prescriptions above a certain copay.

A related Congressional Staff briefing presented jointly by the AAA and SOA in Washington, D.C. occured on July 21, 2003 at 12:00 p.m. For more details on the briefing, please see the Academy Website.

  • Researchers–Reden and Anders
  • Corey Berger
  • Tim Feeser
  • Lynette Trygstad
  • Project Oversight Group
  • P. Anthony Hammond, Chair
  • Barabara Bald
  • April Choi
  • Kara Clark, SoA Staff
  • Joseph Korabik
  • Mark Litow
  • Cynthia Miller
  • Jim O' Connor
  • Garry Reed
  • Steven Siegel, SOA Staff
  • David Steinberg
  • Cori Uccello
  • Margaret Wear