Humana executives say Trump drug rebate proposal would raise premiums


The move would require individual drug discounts to be passed directly to those buying high-cost drugs at the pharmacy counter to reduce their out of pocket costs. But some argue that those discounts are now used to lower overall drug plan insurance premiums, so the proposal would likely result in higher premiums and less consumer choice, executives said. It also presents a major challenge for companies now with an uncertain future and planning to determine coverage for 2020 beginning this spring.

“As a company we completely support what the administration is trying to do … to lower the drug costs. We believe that’s the right thing to do,” said Bruce Broussard, Humana CEO on the company’s earnings call with analysts Wednesday. But the proposal comes down to “just reallocating dollars.”

Humana executives say seniors in the standalone Medicare Part D market are drawn to plans with the lowest monthly premium costs. This year that will result in the company’s co-branded Medicare Part D plan with Walmart losing market share to competitors that offered cheaper plans; the company forecast a decline of 700,000 to 750,000 in its Part D enrollments for 2019.

Humana reported fourth-quarter profits of $2.65 per share, which exceeded Wall Street analyst estimates, on revenues of $14.2 billion which also topped expectations. Despite warning of lower Part D prescription drug plan enrollment for 2019, the insurer reaffirmed its expectation that its Medicare Advantage growth will be on track to add more than 375,000 members.

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