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CVS expects decline in Medicare Part D subsidy enrollees
October 2nd, 2009
WOONSOCKET, R.I. – CVS Caremark Corp. projects that the number of low-income subsidy members enrolled in its Silverscript and Accendo Medicare Part D plans will fall by 30% to 35% next year.
The drug store and pharmacy benefits management company said Friday that it based its conclusions on a preliminary review of the results of the 2010 Medicare Part D competitive bidding process released by the Centers for Medicare and Medicaid.
According to CVS Caremark, the results indicate that Silverscript and/or Accendo plans qualified to receive automatically assigned low-income subsidy members in 15 regions covering 27 states in 2010, down from 30 regions comprising 46 states plus the District of Columbia in 2009.
The total number of beneficiaries that will be enrolled in Silverscript and Accendo Medicare Part D plans during 2010 won't be known until early that year, after the close of the open enrollment period, the company noted.
Based on those results, CVS Caremark estimates that the member decrease could negatively impact 2010 earnings by 3 cents to 4 cents per share. When reporting fiscal 2009 second-quarter results in early August, the company said a regulatory change that effectively eliminated Medicare Part D network differential likely would negatively impact 2010 earnings by 5 cents to 7 cents per share. So the total impact on 2010 earnings is forecast at 8 cents to 11 cents per share.
"While we are disappointed that we will serve fewer auto enrollees in 2010, the Medicare Part D business will still provide good returns and remain solidly profitable," Dave Rickard, executive vice president, chief administrative officer and chief financial officer at CVS Caremark, said in a statement.