KFF examines impact of low enrollment in Part D program
This Kaiser Family Foundation study estimates the potential impactin monthly Medicare drug premiums if enrollment does not reach 29million in 2006 as the Congressional Budget Office (CBO) assumed, andif those who do enroll have relatively high total prescription drugcosts.
The study, prepared by Avalere Health LLC and based on amodel developed by Actuarial Research Corporation, looks at variousparticipation scenarios for the beneficiaries who are projected by theCongressional Budget Office (CBO) to enroll in a Medicare drug plan in2006. The paper examines the effects of varying enrollment on monthlypremiums and federal costs of the Medicare prescription drug benefit,particularly if beneficiaries with relatively low drug spending do notenroll.
This analysis solely focuses on the impact of variousparticipation scenarios, based on beneficiaries’ prescription drugcosts, on average Medicare prescription drug plan premiums. Theanalysis holds constant other factors that also could affect averageplan premiums in the future, including drug prices and utilization, andother market dynamics that could affect plan participation. Thesefactors were held constant to illustrate the implications of variousbeneficiary participation scenarios on Medicare drug plan premiums.
The report concludes, inter alia, that average premiums for the Medicare prescription drug benefit could be significantly higher in 2007 than current CBO projections if enrollment is significantly
concentrated among beneficiaries who have high expected drug spending.
Thestudy was prepared for the Kaiser Family Foundation by Jonathan Blum,Jennifer Bowman, and Chiquita White of Avalere Health LLC.