SENIOR BENEFITS GROUP

World Class Senior Advice and Solutions

Gregory S. Jordan, LUTCF, CSA

MEDICARE'S NEW DRUG DISCOUNT PROGRAM

Drug discount cards with Medicare's seal of approval will soon begin offering partial relief to high prescription costs, but the complexity of the program prompts many questions.  Here's some general questions/answers you may find of interest.

What are Medicare discount cards?

The cards are intended to provide interim help toward prescription drug costs from June 1, 2004, until the full Medicare drug benefit begins in January, 2006.  They offer discounts on some drug prices.  They do not provide drug coverage.

There is no single "Medicare" card.  Many competing cards will be offered by private companies that include health insurers, Medicare HMOs, pharmacy benefit managers - of whom have been approved by Medicare.  There will be a choice of at least two cards in each state and many more in some areas.

Who can get a discount card?

All Medicare beneficiaries, except those who receive drug coverage from Medicaid.  However, you should check your eligibility if you're in a state pharmacy assistance program in Florida, Maryland, Illinois, Vermont or Wisconsin.  You do not have to sign up for the program.  You should be notified by Medicare.

How many cards can I use?

You can choose only one (1) Medicare-approved card.  During the 18 month program, you can change to another card only once, at the end of 2004.  If you are enrolled in a Medicare HMO that sponsors a card, you can apply only for that card.  You can use non-Medicare discounts (for example, from pharmacies) as well, but not for the same prescription.

Do I need a Medicare card?

If you already have adequate drug coverage, are getting better savings through other cards, are in an assistance program or a mail order from abroad, this card may not be worthwhile.  If you currently pay full retail price for your prescriptions, or your drug coverage doesn't meet all your costs, a card could help up to a point.  If you're eligible for the low-income credit, a card will have real value.

What will the cards cost?

By law, no card can cost more than $30 a year, and some may cost less.  People eligible for the low-income credit pay no fee.

What discounts would I get?

Discounts will vary between cards.  Medicare officials estimate savings averaging 10% to 15%, with perhaps up to 25% on certain brands and more on some generic brands.  There is one drawback in that sponsors will be allowed to change prices weekly.

Can I get discounts on all my drugs?

Some cards will offer "open formularies," which means they will include discounts on all drugs.  Others will discount only certain drugs, but they are likely to offer greater savings than those with open formularies.

Can I use the card at any pharmacy?

NO!  Each sponsor will specify which pharmacies accept its own card.  Some will also offer mail order, which can mean greater savings.  None of the cards can be used to buy drugs from other countries.

What is the low-income credit?

It is a federal subsidy, under which Medicare will pay 90% to 95% of drug costs up to $600 per year in 2004 and 2005, as well as waive the $30 enrollment fee.

You can get this credit if your 2004 income is below $12,569 (single) and $16,862 (married).  There is no asset test.

Even if you qualify by income, you do not qualify if you have drug coverage from Medicaid (including state pharmacy programs that receive Medicaid funding), group health insurance, military or veterans health benefits or the federal employees health program.

But you do quality if you are enrolled in a Medicare HMO that sponsors a discount card or in a state pharmacy assistance program that doesn't get Medicaid funding.

The $600 a year credit will be added to any Medicare-approved discount card you choose.  Any credit unused at the end of 2004 can be rolled over to next year and used together with the $600 credit for 2005.

How doe I decide which card (if any) is right for me?

The tricky part is comparing the different Medicare cards to see which of your drugs they offer at a discount, how much you might save and whether those savings are better than other discounts available to you.  To assist you in your decision -

  • A comparison of Medicare cards will be posted on the official Medicare website after May 1, 2004.  You can type in your Zip Code and see the drug prices and services offered by each sponsor in your area.  The website is www.medicare.gov or you can call 800-633-4227 for similar information.

How do I apply for a card?

You can apply any time after May 3, 2004.  Sponsors will send out mailings this month with application forms for discount cards and the $600 credit.  Fill out and return the form(s) to the sponsor of the card you've chosen.

What if I have more questions?

 

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