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February 15, 2005 at 07:00 PM
Many companies have not yet decided what they will do about the new Medicare prescription benefit program.[@@]
A team led by Kathryn Allen, a health insurance specialist at the U.S. Government Accountability Office, has published data supporting that conclusion in a study conducted for several congressional committees.
When Congress passed the Medicare Prescription Drug, Improvement and Modernization Act of 2003, which is set to create the Medicare Part D prescription drug program, it included a subsidy provision for existing employer-sponsored retiree drug programs, to encourage employers to keep the programs rather than dumping retirees into the new Medicare Part D drug program. Employers will get the subsidy only if retirees stay out of the Part D program.
But program rules are complicated, understanding the effects of choices on retiree plan costs is difficult, and the result is that only 2 of 12 private employers GAO officials surveyed have decided to choose the subsidy option for all of their retirees, Allen writes in a report on the survey findings.
Another 2 employers have decided against choosing the Medicare subsidy, 3 have decided to choose the subsidy for some retirees, and 5 continue to consider the subsidy option, Allen writes.
