AARP Study Makes Medicare Recommendations

The study recommends that lawmakers:

• Balance an adequate benefit with affordable contributions
• Encourage people to enroll as soon as eligible
• Restrict or avoid later enrollment, which might occur on an as-needed basis
• Make enrollment automatic with the choice being to opt-out, not to opt-in
• Offer catastrophic coverage to attract higher-income beneficiaries
• Deduct premiums from monthly Social Security checks
• Keep the program design simple
• Use pharmacy benefit manager cost-containment techniques to encourage efficient spending on prescription drugs
• Balance individual flexibility in choice of drugs with savings and affordability.

William M Mercer conducted the study. It comprises an actuarial analysis, which applies basic insurance principles to the design of a Medicare prescription drug benefit and makes recommendations to policy makers who are currently searching for the best way to add a voluntary prescription drug benefit to Medicare.

– Camilla Klein                                     editors@plansponsor.com