Sierra Health Services Inc. says offering complete Medicare prescription drug coverage seems to have attracted consumers who make unexpectedly heavy use of prescription benefits.
The basic Medicare Part D comes with a "donut hole," or gap in coverage that affects plan members who exhaust everday drug benefits and have not yet spent enough on covered prescriptions to qualify for catastrophic coverage
This year, the donut hole extends from $2,400 to $3,850.
If January is a sign of what the future holds, the 42,000 Medicare beneficiaries who signed up for plans from Sierra Health, Las Vegas, that include donut hole coverage will saddle the company with about $3 million in losses, the company says.
The 163,000 beneficiaries who signed up for basic coverage are on track to generate about $11 million to $14 million in income, Sierra Health estimates.
Sierra Health says it hopes to come up with a formal estimate for the losses on the full-coverage plans and set aside a premium deficiency reserve for the first quarter.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.