Boomer birthdays, Universal American acquisition put CVS at top of Medicare Part D game
WHAT IT MEANS AND WHY IT'S IMPORTANT — The news that CVS Caremark has entered an agreement to acquire the Medicare Part D business of Universal American is important on several fronts: Not only will the deal more than double the size of CVS Caremark's Medicare Part D program, but the move also comes just as the first baby boomers turn 65.
(THE NEWS: CVS Caremark acquires Universal American. For the full story, click here)
Universal American's Part D business currently serves about 1.9 million Medicare PDP members, while CVS Caremark serves roughly 1.2 million Medicare PDP members. These numbers reflect current levels of membership and do not include 2011 auto assignment or the results of the annual enrollment period, which ended Dec. 31, 2010.
The transaction is expected to close by the end of the second quarter. Once completed, CVS Caremark will become one of the nation's largest providers of prescription drug services for Medicare beneficiaries enrolled in Medicare Part D, which is the federally subsidized prescription benefit program provided to Medicare beneficiaries, those who are ages 65 years and older or who otherwise qualify through disability.
In announcing the acquisition, Per Lofberg, president of Caremark Pharmacy Services, indicated that the Medicare Part D program is "integral to its long-term growth strategy" and a growing portion of the country's population will receive their prescription drug coverage under Medicare plans due in part to age demographics. And clearly that is the case.
Starting Jan. 1, approximately 7,000 baby boomers will turn 65 each day, according to the AARP. Furthermore, health care is undoubtedly top of mind for many baby boomers.
According to a recent AARP survey on the attitudes, feelings and outlooks of Americans born in 1946 at the beginning of the baby boom generation, an overwhelming majority (84%) said they plan to take better care of their health when asked what changes they expect to make over the next few years.
The study also found that 3-out-of-10 boomers said their health (31%) and personal finances (32%) are in worse condition than they previously expected. And more than a quarter cited money (26%) and health (28%) as the biggest obstacles to achieving their dreams over the next five years.
The survey of 801 people turning 65 years old in 2011 was drawn at random from the United States and conducted by Woelfel Research for AARP. It was conducted by telephone between Nov. 11 and 15, 2010.