3 firms are big Medicare drug-benefit winners

With Monday's sign-up deadline for the Medicare drug benefit looming, three companies have emerged as the biggest winners in the battle for the lucrative business of selling prescription drugs to the state's senior citizens.

UnitedHealth Group of Minnesota signed up 54,700 seniors through April 27, or 18 percent of the Massachusetts market for stand-alone drug plan coverage, according to numbers compiled by the Centers for Medicare & Medicaid Services, or CMS, which runs the drug plan.

It was followed by Humana Inc., the insurance company based in Louisville, Ky., which had 48,700 members in Massachusetts, or 16 percent, and Blue Cross Blue Shield New England Alliance, which serves seniors in four New England states. The alliance signed up 47,300 members in Massachusetts, 15 percent of those who enrolled in stand-alone drug coverage under the Medicare plan, called Part D.

At the far end of the spectrum are about eight companies, each with 1 percent or less of the market, or just a few thousand members each in the state. Some could eventually leave the state because they did not attract enough enrollees, said Dr. Mark McClellan, the CMS administrator, who has predicted that market choices will be reduced as the program continues.

''We're seeing that seniors like the fact that our plans have no deductible, simple and predictable copays, and a broad formulary that includes every Part D approved drug," said Brandon Lau, a UnitedHealth manager in charge of the drug benefit.

UnitedHealth teamed up with AARP, the nation's largest advocacy group for older Americans, and sells its drug plan under the AARP Rx brand name. ''AARP is an organization that people know and trust, and certainly it's a factor" in UnitedHealth's success in Massachusetts, Lau said.

''I'm not surprised the AARP plan is the leader in Massachusetts," said Kathy Bakich, senior vice president at Segal Co., an employee benefit and human resource consulting firm in New York. ''In my experience, many people are very comfortable with AARP's existing Medigap plan." Medigap plans add additional insurance coverage to traditional Medicare, which covers hospital stays and doctor visits.

UnitedHealth in December merged with PacifiCare Health Systems Inc., which also offers a Medicare drug plan. Combined, the two firms have about 25 percent of the Massachusetts market for stand-alone drug plans. Until now, however, they have been marketed separately.

A Humana spokesman, Tom Noland, said senior citizens have responded to Humana's rates, which are the lowest possible premiums for Medicare drug coverage in many states.

''Very often, seniors find the Humana plans are the least expensive," he said. The company also offers several drug plans, enabling seniors to choose one that suits their needs, he said.

''Seniors are not a monolithic socioeconomic group at all," Noland said.

He said Humana had predicted it would enroll 2.2 million seniors nationwide in its Medicare drug plan by the end of the year, and has already signed up 2.6 million.

Kenneth J. Arruda, director of senior health plan product for Blue Cross, said the insurer had signed up many members in recent weeks and now has more than 70,000 enrollees in Massachusetts. ''We've seen an increase in enrollment activity in the past few weeks," Arruda said. ''Last fall, I naively thought that all seniors would want to sign up for Jan. 1. Most did not choose to enroll for Jan. 1. They're taking their time to make the right choice."

The Medicare drug plan has been criticized for its complicated structure, under which dozens of private companies provide drug coverage to seniors and disabled people. Many found the plan difficult to understand and the choices overwhelming.

Since benefits started Jan. 1, the program has been plagued by administrative and computer problems. That made it necessary for many states, including Massachusetts, to guarantee payment for drugs for low-income, disabled residents whose drug coverage was being switched from Medicaid to Medicare.

The confusion and difficulty are expected to be key campaign issues for Democrats during midterm election campaigns this fall. But many seniors who didn't have drug coverage previously have said they are saving money on drugs under Part D.

Medicare and Bush administration officials do not acknowledge any problems with the overall design of the drug benefit.

And while many members of Congress have asked for a postponement of the May 15 enrollment deadline, the administration has said the deadline is necessary to prompt seniors to reach a decision about signing up for the benefit.

Those who don't have drug coverage and who enroll after May 15 will pay a penalty equal to 1 percent of their drug coverage premiums for each month they wait. The penalty is permanent.

Meantime, officials are crisscrossing the country to promote the drug plan at local events. Today, McClellan and other officials will meet with seniors at the Revere Senior Center.

Jeffrey Krasner can be reached at krasner@globe.com.