ABSTRACT
The launch of Medicare's prescription drug plan marks a major milestone in federal health policy. Nearly 90 percent of Medicare's 43 million beneficiaries now have some form of prescription drug coverage, approximately 6 million of whom had no coverage prior to the introduction of Part D. The enrollment boom presents a tremendous opportunity for health insurers. But the new enrollments also present a challenge, as insurers' ability to build customer loyalty will depend on their success in reorienting themselves to the consumer market where tastes can be even more fickle than in the group business. The good news is that as insurers focus on serving senior customers, there is an even more promising opportunity on the horizon than Medicare Part D: providing products that help consumers-particularly retirees and those nearing retirement-to plan for and manage their out-of-pocket health care spending. The retirement health market beyond Medicare Advantage and Part D could significantly impact many health insurers' bottom line; it's expected to generate $80 billion in revenues and $8-$12 billion in pre-tax profits by 2014.
