In a press release on the study the SOA says companies that choose to drop their current drug plans, but pay their retirees’ Medicare D premiums have the potential to save the most in costs – about 83% for a typical plan in 2006.
Sponsors that select to integrate or wrap their plans around the Medicare D plan can save from 31% to 49% on pharmaceutical costs, the study found, while companies who choose to retain their own drug plans and receive a government subsidy will save almost 30% in costs. In addition, sponsors who receive the subsidy will be eligible for special tax benefits that would further increase their savings.
The study predicts potential savings to businesses during a 50-year period, and shows businesses’ savings will decrease over time with the exception of those that choose to drop their plan and pay the retirees’ Medicare D premiums.
“The Medicare Part D program is really going to have an impact on those groups with large numbers of Medicare eligible retirees with prescription drug coverage – state and county governments, older manufacturing companies and schools,” said Kevin Dolsky, AHCS consultant and Fellow of the Society of Actuaries, in the release.
The study report can be found here .