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UnitedHealth No. 1 in Drug Enrollees

April 29, 2006|From the Associated Press

WASHINGTON — UnitedHealth Group Inc. and Humana Inc. are the biggest winners among insurers offering the new Medicare drug benefit, according to enrollment numbers released Friday.

Though about 90 companies are administering more than 3,000 private plans around the country, enrollment is heavily concentrated in just a few companies, according to the Centers for Medicare and Medicaid Services.

UnitedHealth, which has a joint marketing relationship with AARP, the largest lobbying group for older Americans, was a clear No. 1. It obtained 27% of the enrollment in stand-alone drug plans, or 3.8 million enrollees. It also led among the Medicare Advantage offerings with 20% of the market share, or 1.2 million enrollees. The Medicare Advantage offerings operate like an HMO in which consumers get comprehensive healthcare coverage rather than just prescription drug coverage.

Humana was the only other insurer capturing a double-digit share of the market in stand-alone drug plans. About 2.4 million beneficiaries enrolled in Humana plans, or 18% of total enrollment so far.

Humana was also third in the Medicare Advantage offerings, with about 800,000 enrollees, or 13%.

Dan Mendelson, president of Avalere Health, a consulting firm, said the companies with the largest enrollment numbers early on would have a big marketing advantage going into the second year.

Mendelson said the partnership with AARP was a huge boost for UnitedHealth.

"Their offering is pretty mainstream, honestly, but they come in with very solid name recognition both from AARP and from their local managed-care presence," he said. "They are the largest managed-care company in the country."

Mendelson said Humana distinguished itself by offering low premiums. In some regions, those premiums were as low as $1.87 a month, attracting beneficiaries who had low drug costs.

"Humana came in with a very innovative set of offerings," Mendelson said.

He said companies with a small market share were not necessarily facing a losing proposition.

"Plans that don't attract significant market share are unlikely to persist for that long. They'll likely become merged or divested," Mendelson said. "The exception is if a plan is regionally focused. In those cases, you can make offerings profitable without attracting huge market share."

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