Summer 2006 Survey Report, "Results of the Segal Medicare Part D Survey of Public Sector Plans."

Abstract

As the first plan-sponsor subsidy payments under Medicare Part D begin to arrive from the Centers for Medicaid and Medicare Services (CMS) in June, many public employers continue to assess their options for retiree health care programs. In May, The Segal Company, in cooperation with the Public Sector HealthCare Roundtable, asked public entities what actions they have taken in this first year of the program and what they are thinking about doing for 2007. This Survey Report addresses the following key findings of The Segal Company's Medicare Part D Survey of Public Sector Plans:

  • A large majority of plans decided to apply for Medicare's Retiree Drug Subsidy (RDS) for 2006, but far fewer plans are likely to select that option for 2007.
  • Almost half of plans taking the RDS this year decided to terminate coverage (prescription drug coverage alone or that coverage plus medical coverage) for retirees who also enroll in a Medicare plan on their own.
  • Although few plans opted to contract with a Medicare plan stead of taking the subsidy for 2006, more than twice as many plans expect to choose that option for next year.
  • Also expected to almost double between 2006 and 2007 is the small number of plans offering coverage to "wrap around" Medicare Part D coverage
  • The survey found that there is little or no interest in either applying to "become" a Medicare Prescription Drug Plan (PDP) or dropping retiree prescription drug coverage entirely
  • For almost two-thirds of plans, statutory or regulatory obligations affect their ability to change retiree health coverage

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