There have been some questions about why health plans and PBMs would want to be quite so enthusiastic about becoming Participating Drug Plans or Medicare Regional PPOs, or for that matter getting back into being Medicare, given that they all risk adverse selection. The answer is pretty simple. The amount of money paid to Medicare HMOs went up dramatically at the start of 2004, and Part D PDPs and now the Medicare PPOs are all basically being insured by the government against losses.
The real test will com when those subsidies are taken away in a few years. Last time that happened, managed care dropped the Medicare ball in a big way.