March 07, 2005

Ensuring Insurance for new Medicare drug benefit

Surprising many experts, a large number of substantial insurance companies have stated they would offer prescription drug coverage to Medicare beneficiaries next year.

In a New York Times article released on Sunday, the Times reports that early predictions surrounding the new Medicare plan were wrong. In 2001, the president of the Health Insurance Association of America said that "private drug insurance policies are doomed from the start. The idea sounds good, but it cannot succeed in the real world."

Now it seems that insurance companies think the plan makes practical sense as well. Citing the business opportunities with the older population and the reduced financial risks created by heavy federal subsidies, insurance companies aren't willing to stand back and let competition steal the market.