The competition just got a whole lot tougher for Humana in the bargain basement Medicare drug plan category.
As of Oct. 1, Medicare Advantage and Part D plans could start marketing their new offerings for 2012. Perhaps the most talked-about products will be prescription drug plans that have preferred pharmacy networks to encourage generic drug utilization, which will become more prevalent next year.
In 2011, Humana attracted more than 1 million members to its Humana Walmart-Preferred Rx Medicare prescription drug plan. The unique plan made waves across the industry because it offered the lowest monthly premium nationwide and had a preferred pharmacy network through Walmart, which allowed Humana to offer preferred generic drugs for a $2 copay after the plan deductible of $310 was met. Unlike in 2011, Humana will have plenty of competition from carriers that are offering similar plans that encourage generic drug usage in 2012.
For instance, Aetna, which had CMS marketing sanctions lifted earlier this year, may lure away thousands of Humana members next year because of its new Aetna CVS/pharmacy PDP plan. The new plan has a $320 deductible, the standard deductible for next year; however, that only applies to branded drugs. Members who go to a preferred CVS pharmacy will be able to receive a month's supply of a preferred tier 1 generic drug for a $3 copay and a non-preferred tier 2 generic drug for a $10 copay. The plan also offers preferred brand tier 3 drugs at a preferred pharmacy for a $29 copay. However, a member who takes a non-preferred brand tier 4 drug will be slapped with a whopping 41 percent coinsurance, while tier 5 drugs will be covered under a 25 percent coinsurance.
Although Humana's Walmart-Preferred Rx PDP still offers the lowest monthly premium in 2012, $15.10, it may not be enough to persuade members to stay since the plan's deductible will still apply to generic drugs. Aetna's new plan will cost members $26 per month, but, for high utilizers of generic drugs, the plan may be more attractive since they may never have to pay toward the deductible before drug coverage begins.
Another product that could be a thorn in Humana's side is Coventry's First Health Value Plus PDP plan. In 2011, Coventry lost hundreds of thousands of PDP members because CMS did not approve a low-cost PDP offering and regulators required Coventry to discontinue some PDP plans that were too similar. However, with the First Health Value Plus plan, Coventry will likely regain much of its lost membership.
The First Health Value Plus PDP has no annual deductible and a preferred pharmacy network through Target, Walgreens and Walmart. The plan has an average monthly premium of $25.60, which is comparable to Aetna's. If a member goes to a preferred pharmacy he or she will be able to receive tier 1 generic drugs at no cost. However, for branded drugs, the member will be hit with a 25 percent coinsurance for tier 2 drugs, a 39 percent coinsurance for tier 3 drugs and a 33 percent coinsurance for tier 4 drugs.
When January 2012 rolls around, it should be interesting to see who will be the best at attracting members to low-cost PDP plans. By offering more competitive Part D plans, carriers hope to attract a membership segment that is healthier, uses fewer drugs and mainly relies on generic drugs.