A Medicare Prescription Drug Update

The Medicare Prescription Drug Discount Card program now is up and running, producing both benefits and controversy.

Seniors could sign up for a program starting May 1 and could begin using the cards June 1. Advertising for the cards by both the government and card sponsors began in May.

The Centers for Medicare and Medicaid approved 73 plans offered by more than two dozen companies. Each card is not available everywhere. In the Washington, D.C. area, for example, about two dozen cards are available.

Medicare has detailed information on the programs, allowing you to compare programs. On the web, the prices for medicines under each card and other terms of the cards are available at http://pricecomparison.medicare.gov. Those who don’t want to use the Internet can learn details by calling 800-MEDICARE.

The controversies began right away. The wrong prices were posted for some drugs for some programs on the web site. The government says it used data provided by the card sponsors. Some gave the wrong data to the government, while others didn’t provide data. The government said any incorrect prices were fixed quickly.

In addition, different users might pay different prices for the same drug under the same card, because of the terms of the program. For example, there might be one price for mail order and one price to buy in person at a pharmacy. In those cases, Medicare lists the highest price a card member might pay. Some say this could be misleading, but Medicare says it wants to post the lowest price every consumer is guaranteed to get. That means you need to examine program details closely. You might get a better deal than the posted price if you have flexibility in how the medicine is purchased.

There were allegations that drug companies increased prices before the program began so that they could offer discounts under the cards without changing the amount of revenue they receive. The drug companies denied that and said the critics misrepresented the complicated world of pharmaceutical pricing.

Another controversy is that Medicare recipients can select only one card and can change cards only once when enrollment for the 2005 year begins in the fall of 2004. Yet, each program sponsor can change prices at any time, and new programs can be offered at any time. There were reports of card sponsors changing prices several times during the initial month of the program, and many say they expect to change prices (by lowering them) as time passes.

Medicare members should remember that they do not have to sign up for a drug discount card, and after signing up for one they do not have to use it.

My advice from the start has been, and remains, that Medicare members should not rush to pick a card. It will take some months for all interested organizations to offer programs and for other programs to firmly establish the discounts they will be able to provide. Sometime this summer or fall things should settle down. Lower-income Medicare members should sign up for a card if only to get the $600 of free drugs available to those with incomes no more than $12,750 for singles and $16,863 for married couples. This group also won’t have to pay membership fees for their discount cards but might owe copayments and deductibles on purchases.

In addition to checking prices in the programs listed on the Medicare web site, check other longstanding drug discount programs. Many are listed on the Retirement Watch members’ section of the web site. In addition, check retailers that regularly offer drugs at discounted prices. These include Costco and Wal-Mart pharmacies.  Also check prices on the web sites www.costco.com and www.drugstore.com.  Surveys by The Washington Post and The Wall Street Journal found that for at least some medicines these traditional sources offer better prices than the Medicare drug discount cards.
Also check, www.medicarerights.org for information about many drug discount programs available.

The Medicare Prescription Drug Discount card program is scheduled to disappear on Jan. 1, 2006, when it will be replaced by Medicare’s new prescription drug program.