CVS Caremark: Enrolled members in subsidy programs will decrease

WOONSOCKET, R.I. CVS Caremark announced on Friday that the number of low-income subsidy members enrolled in its Silverscript and Accendo Medicare Part D plans likely will decline by about 30% to 35% in 2010, which could negatively impact 2010 earnings by 3 cents to 4 cents.

In addition, the company previously noted in its second-quarter 2009 earnings call that the effect of a regulatory change that effectively eliminated Medicare Part D network differential is expected to negatively impact 2010 earnings by 5 cents to 7 cents. Consequently, the aggregate impact on 2010 earnings is expected to be 8 cents to 11 cents.

"While we are disappointed that we will serve fewer auto enrollees in 2010, the Medicare Part D business will still provide good returns and remain solidly profitable," stated Dave Rickard, EVP, chief administrative officer and CFO.

The company based its conclusions on a preliminary review of the results of the 2010 Medicare Part D competitive bidding process recently released by the CMS. Those results indicate that Silverscript and/or Accendo plans qualified to receive automatically assigned LIS members in 15 regions in 2010 as compared with 30 regions in 2009. The total number of beneficiaries that will ultimately be enrolled in Silverscript and Accendo Medicare Part D plans during the 2010 year will not be known until early 2010, the company stated.