WHAT IT MEANS AND WHY IT'S IMPORTANT Launching a pre-emptive campaign to capture a major share of the Medicare prescription market, Walmart and Humana have unveiled a boldly conceived, co-branded Medicare Part D prescription drug plan that offers steeply discounted premiums and co-payments.
(THE NEWS: Walmart, Humana unveil new Medicare Part D prescription drug offering. For the full story, click here)
The plan, announced to reporters late Thursday under strict embargo agreements, is priced low enough for cash-strapped seniors that it could have the kind of dramatic impact on the pharmaceutical market that Walmart had when it rolled out its $4 generic drug pricing four years ago.
The Humana Walmart-Preferred Rx Plan offers one low national monthly plan premium of $14.80. That’s less than half the average national monthly premium set by prescription drug plans serving Part D, Walmart and Humana officials asserted, and is the lowest national plan premium in 2011 for a stand-alone Medicare Part D plan premium offered in all 50 states and Washington, D.C., according to the Centers for Medicare and Medicaid Services.
Given the current state of the economy, said John Agwunobi, president of Walmart’s health and wellness division, “this couldn’t be more timely.” It will give nearly 18 million Americans relying on Medicare for their prescriptions an affordable alternative, he added. “We know every dollar counts, especially when you live on a fixed income. We believe no one should have to choose between buying their groceries or their medications. We are committed to doing everything we can to ensure seniors have access to the medications they need at a price they can afford,” Agwunobi said.
Savings for seniors aside, the Walmart-Humana PDP may shift a considerable chunk of the Medicare Part D prescription market to the world’s largest retailer and its more than 4,000 pharmacies. The plan gives preferred status to Walmart’s own pharmacies, so Medicare beneficiaries who enroll in the plan will get low co-payments when they fill their prescriptions at a Walmart, Neighborhood Market or Sam’s Club pharmacy. In-store co-payments for those plan members will start as low as $2 for generic prescriptions at the company’s own pharmacies.
“This new co-branded prescription drug plan,” the two companies asserted in a joint statement, “can save a typical Medicare Part D beneficiary who enrolls in the Humana Walmart-Preferred Rx Plan an estimated average of more than $450 in 2011 on plan premiums, prescription medication co-payments and cost-shares, when compared with the average total costs for a Part D prescription drug plan in 2010.”
The rollout of the new plan, Agwunobi acknowledged late Thursday, “is intended to grow out business.” It also cements a partnership with Humana that dates back to the inception of the Medicare Part D program in early 2006, when the two firms linked up to educate seniors about their options under Part D and provide pharmacy services through a co-branded prescription insurance card.
Under terms of the original agreement, Humana administered a Walmart drug benefit network and provided seniors guidance about the Part D program at kiosks in most Walmart, Sam’s Club and Neighborhood Market stores. But with the launch of the co-branded, discount PDP program, Agwunobi said, “we have taken our relationship to a new level.”
Humana, which markets other Part D plans of its own at considerably higher premium rates, also stands to gain a bigger share of the Medicare drug market. Plan members who fill their scripts via Humana’s RightSource home-delivery prescription service may be able to waive co-payments entirely for some generics, according to William Fleming, VP pharmacy solutions at Humana. “One of the primary goals of healthcare reform is to make health coverage more affordable –– and that’s what we’re doing with the introduction of this low-cost Medicare Part D plan,” Fleming said. “People are more likely to take the medications prescribed for them when they can afford those medications.”
The two companies are offering information on the plan beginning today through both companies’ websites and other media, and Humana has brought back its information kiosks, which have been set up in some 3,000 Walmart stores across the country. Humana Walmart-Preferred Rx Plan will be signing up seniors when annual enrollment for Medicare plans begins Nov. 15.