Estimated Impact of Medicare Part D on Retiree Prescription Drug Costs
Research Projects – Health
The Health Section Research Team is pleased to make available the following report that estimates the impact on plan sponsor retiree pharmacy costs when Medicare Part D is implemented in 2006. The research was conducted by Kevin Dolsky and Richard Marchel of Actuarial & Health Care Solutions, LLC (AHCS).
The report provides estimated savings measured over a 50 year time frame for several of the options that will be available to plan sponsors after implementation of the Medicare prescription drug program. These options include:
- Maintaining the current drug benefit program and receiving the 28% government subsidy.
- Offering a plan that wraps around or integrates with the new Part D benefit.
- Terminating the current drug coverage for their Medicare-eligible retirees.
Note: This report is intended as a reference guide and resource for actuaries estimating the impact of Medicare D on plan sponsor costs, including the application to retiree valuations. It is not intended as a substitute for an analysis of available claim and exposure data for a specific plan nor should be inferred as providing standard valuation tables or values for FASB type calculations or other purposes.
The Health Section Research Team wishes to thank the following individuals that served on the Project Oversight Group:
- Corey Berger
- April Choi
- Tony Hammond
- Joe Korabik
- Gary Reed
- Steven Siegel
- Cori Uccello
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