You should clearly understand what the ex-president of Health Insurance Association of America said
Defying Experts, Insurers Join Medicare Drug Plan
By ROBERT PEAR
WASHINGTON, March 5 - The new Medicare drug benefit passed a major milestone in recent weeks as a substantial number of big insurance companies said they would offer prescription drug coverage to Medicare beneficiaries next year, defying the predictions of many industry experts.
...In 2000, however, when the legislation began moving through Congress, Charles N. Kahn III, who was then president of the Health Insurance Association of America, said: "Private drug insurance policies are doomed from the start. The idea sounds good, but it cannot succeed in the real world."
Insurers say they now find the risk acceptable because the government will protect them against large financial losses, at least in the first years of the program.
Under the law, the government offers subsidies to insurers, pays more for sicker patients and pays still more if the claims significantly exceed what the insurer expected.
