In order to boost their prescription drug businesses, Humana Inc. (HUM) and Wal-Mart Stores Inc. (WMT) have launched a Medicare Part D prescription drug plan, which is estimated to provide the lowest monthly Medicare prescription drug premium in the US, as well as low co-pays and cost-shares to its beneficiaries in 2011.
 
The Humana Walmart-Preferred Rx Plan (PDP) will cost a monthly premium of $14.80 for prescription drugs, and the co-payments for generic drugs would be only $2 for Medicare beneficiaries who are using preferred pharmacies such as Walmart, Neighborhood Market and Sam’s Club. Also, there will be no co-pays for some generic prescriptions filled through Humana’s mail-delivery service.
 
The prescription drug plan has been designed to target the requirements of every individual within various income groups, regardless of the location. Further, it provides Medicare beneficiaries including seniors and disabled to save more than $450 on average in 2011 on premiums, prescription medication co-payments and cost-shares than the drug plans in 2010.
 
The interested members for the plan can enroll from November 15 through December 31 at the Humana or Medicare websites, at Walmart stores with Humana informational kiosks, or by calling Humana by phone.
 
Medicare is the U.S. government health coverage program meant for the elderly and disabled, which began offering a drug benefit, known as Medicare Part D, in 2006 through private plans approved by the government. Nearly 18 million Americans depend on Medicare Part D for their prescriptions.
 
Currently, Humana earns heavily from its Medicare plan with 3.5 million Medicare enrollees as of June 30, with slightly more than half enrolled in prescription drug-only plans. Through the Humana Walmart-PDP, Humana will be able to provide an affordable prescription solution to the desired individuals. Besides, it will enhance its membership in prescription coverage plans and boost its mail-order drug business. Walmart too will be able to further expand its prescription drug business.
 
However, we remain concerned about Humana’s profitability, which might be impacted by increased membership for the Humana-Walmart plan.
 
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