Medicare drug discount cards now available

May 3 2004

HHS Secretary Tommy G. Thompson announced today that seniors and people with disabilities who receive Medicare can now begin to compare and choose the Medicare-approved drug discount card that best fits their needs in providing savings on their prescription medicines. The new cards are expected to offer Medicare beneficiaries discounts on their prescription drugs of between 10 and 25 percent. Low-income beneficiaries may also receive a credit of up to $600 each year in 2004 and 2005 to help pay for their prescriptions.

Beginning today, private organizations can begin marketing their Medicare-approved discount cards to people with Medicare and beneficiaries are now able to compare cards and enroll in the one they choose. Medicare is providing a new Price Comparison Web site at www.Medicare.gov, on which industry drug prices are being posted for the first time.

Secretary Thompson said the drug discount cards are an important new way for seniors to save money on their prescriptions, and he encouraged people with Medicare to shop and compare the prices offered by various cards. Secretary Thompson said competition between card sponsors will work to drive down prices even further, particularly in the first couple weeks of the program -- providing an even greater opportunity for seniors to save.

“The power to save on prescription drugs is now in hands of seniors and people with disabilities,” Secretary Thompson said. “This is a first. Industry is competing on-line for the business of millions of Medicare beneficiaries and those beneficiaries have now pooled their purchasing power to demand the best price.

“Seniors should compare prices and choose the card that’s best for them,” Secretary Thompson said. “Help in comparing cards is only a phone call away to 1-800-MEDICARE, where a customer service representative will send beneficiaries a personalized comparison of cards available to them for the drugs they take.”

Secretary Thompson particularly urged low-income seniors who may qualify for the $600 credit in addition to the discounts to participate in the drug card program. The discount card program is providing unprecedented assistance to low-income seniors and persons with disabilities to pay for their medicines, he said.

“Those in greatest need will receive the most help from the drug discount card program,” Secretary Thompson said. “Seniors and their caregivers should pursue whether they are eligible for the $600 credit and avail themselves of this helpful new benefit.”

Low-income Medicare beneficiaries may qualify for the $1,200 credit over the 18-month life of the discount card program to help pay for the prescription drugs if their income in 2004 is no more than $12,569 if single or no more than $16,862 if married.

In addition, the Centers for Medicare & Medicaid Services (CMS) recently announced that low-income Medicare beneficiaries enrolled in state pharmacy assistance programs that provide discounts on prescriptions drugs may, at the state’s option, be automatically enrolled for the $600 credit on a Medicare-approved drug discount card. States that have the authority to act as an “authorized representative” of a beneficiary (as defined by state law) will be permitted to enroll beneficiaries in drug discount cards on the beneficiary’s behalf. This step will make it easier for low-income beneficiaries in states with pharmacy assistance programs to get $600 in additional help.

To make it even easier to sign up for a discount drug card as well as the $600 credit, CMS has established a standard enrollment form that all card sponsors will have to accept. This form will also be used by State Health Insurance Assistance Programs (SHIPs), and other partners and organizations that assist beneficiaries with their health care decisions. While Medicare is providing comparisons and assistance with enrollment, the beneficiaries must enroll directly with the card sponsor they choose.

All Medicare beneficiaries, except those who have outpatient drug coverage through Medicaid, are eligible to enroll in a Medicare-approved drug discount card program starting today. Beneficiaries who enroll by the end of May will be fully eligible for the discounts and financial assistance beginning in June. The card sponsors may charge an annual enrollment fee of no more than $30, though many cards have lower fees and some have no fee. There is no enrollment fee on any card for people who qualify for the $600 credit.

To date, CMS have approved 40 national cards available to all eligible beneficiaries, 33 regional cards available. This includes a national Long Term Care card available for those in nursing homes and a regional card available for the Territories. A small number of additional card applications are still being reviewed, and the number of cards that meet all Medicare requirements is expected to increase. The Web site will post the prices of more than 60,000 drug products at nearly 50,000 pharmacies.

“It’s important for beneficiaries and their family members to take the time they need to look into all the cards that are available,” said CMS Administrator Mark B. McClellan, M.D., Ph.D. “But beneficiaries who qualify for the $600 credit and free enrollment should try to sign up this month, so that they can get the maximum assistance with their drug costs.”

Secretary Thompson said the opportunity for beneficiaries to band together to get lower negotiated prices, along with an unprecedented, large-scale public reporting of prescription drug prices, will put pressure on card sponsors to reduce prices so that beneficiaries will get the best savings on their medicines. HHS is offering tools and personalized assistance to help seniors and other people with Medicare to compare cards and choose the one that provides them with the best savings.

Beneficiaries can compare the prices of drugs offered by the drug cards at www.medicare.gov or by calling 1-800-MEDICARE (1-800-633-4227). This information will help them compare the discounted prices negotiated by the card sponsors, as well as the enrollment fees, and other discount card features. They can also compare the prices of drugs being charged at their local pharmacies and find out the cards the pharmacies honor. The card sponsors provide the pricing and pharmacy information to CMS and that information is being updated weekly.

Customer service representatives at 1-800-MEDICARE can answer questions about the program, help callers compare the drug cards on price and network pharmacies, and provide additional information for low-income beneficiaries on prescription drug assistance programs sponsored by their state and by drug manufacturers. The customer service representatives will mail the personalized results of the comparison to callers.

“If you tell us your zip code and your medicines, we will sort through information on about 60,000 drug products and nearly 50,000 pharmacies to find the best prices for your needs,” Dr. McClellan said. “And if you want to focus on cards that include particular pharmacies, or particular sponsors, or low or no fees, we can do that too. The next business day after you contact us, we’ll mail you an individualized booklet that gives you detailed information on the cards that meet your preferences and provide the best prices, on other sources of personal savings like discounted generic drugs, and on how to enroll.”

In addition to 1-800-MEDICARE and www.medicare.gov, HHS is reaching out to seniors and others who receive Medicare to inform them of the benefits of the Medicare-approved drug discount cards, including:

• Issuing a detailed “Guide to Choosing a Medicare-Approved Drug Discount Card” that explains the program, including eligibility and enrollment information, and provides step-by-step guidance for comparing discount cards and choosing one. The booklet is now available at www.medicare.gov and through 1-800-MEDICARE.
• Increasing funding for and working with SHIPs to provide one-on-one counseling and distribute educational material to people with Medicare to help them make choices. SHIP counselors are located at senior centers and other locations accessible to beneficiaries and their families to help them better understand Medicare and assist them with their particular concerns and choices of drug discount cards.
• Continuing the 1-800-MEDICARE advertising campaign with a national television ad campaign of $18 million to inform people with Medicare about the discount cards and place an emphasis on explaining the $600 credit. The broader campaign also includes print and Internet advertising in both English and Spanish.
• Mailing a shorter, overview publication directly to every Medicare household.

“We are making it as easy as possible for Medicare beneficiaries to get the information they will need to make a decision that best fits their own prescription drug needs,” Secretary Thompson said.

Medicare-approved drug discount cards must offer discounts on prescription drugs for all of their Medicare enrollees. At least some of these savings must come from manufacturer rebates.

Card sponsors also must publish prices for the prescription drugs their cards will cover, provide access to an extensive retail pharmacy network, operate call centers and have a process to respond to beneficiary concerns. Card sponsors may add drugs or lower prices at any time, but can only increase the negotiated price for covered drugs if there is a legitimate change in the sponsor’s costs, such as changes in the discounts, rebates or other price concessions received from a drug maker or pharmacy. Medicare will also collect and track consumer complaints about Medicare-approved cards.