Private Sponsors of Medicare Drug Cards Unveiled

WASHINGTON —  Promising senior citizens and the disabled that “savings are on the way,” the government Thursday rolled out the first major benefit of the new Medicare law available to almost all 41 million beneficiaries.

In announcing the 28 private sponsors of the Medicare-endorsed drug discount cards that will be activated June 1, the Bush administration also sought to counteract the political drubbing that the landmark Medicare reform legislation, and the administration’s handling of it, have taken in recent weeks.

The drug discount cards represent “only the beginning of the benefits seniors are going to see from this wonderful bill,” said Health and Human Services Secretary Tommy G. Thompson. “There has been so much misinformation.... This is a very good law.”

But Democratic opponents of the Medicare law were not convinced.

“The administration’s discount cards are no substitute for a meaningful program to reduce the exorbitant prices American patients pay for prescription drugs,” said Sen. Edward M. Kennedy (D-Mass.)

“For many medicines, price increases in just the last 12 months have already wiped out any savings that these cards may provide. The fundamental problem is that the Bush Medicare bill is a sweetheart deal for big drug companies and a raw deal for senior citizens.”

Thompson said the government would aggressively promote the cards, which he said would provide price discounts from 10% to 25%, especially to the 7.2 million low-income and disabled seniors believed to be eligible for a $600 annual subsidy.

Sponsors will be authorized to charge an annual enrollment fee of up to $30 to users of the cards, which are intended as a temporary device to make prescription drugs more affordable for seniors until the new Medicare prescription drug benefit takes effect in 2006.

In addition to the 28 private card sponsors who will offer a range of national and regional programs, another 43 sponsors will offer discount cards through 84 Medicare HMOs.

Medicare beneficiaries will start learning about their discount card options as soon as next week by logging onto the Medicare website, www.medicare.gov.

Beginning next month, they also will be able to request a free brochure about the cards by calling (800) MEDICARE.

In addition, the government will run television, radio and print ads about the discount card program, mail a brief explanation of the cards to all beneficiaries and work with state programs to tell beneficiaries about the cards and how to choose one.

People who are eligible for the low-income subsidy -- individuals earning less than $12,569 a year and couples who make less than $16,862 -- should receive notices from the Social Security Administration.

Mark Merritt, president and chief executive of the Pharmaceutical Care Management Assn., a trade group for pharmacy benefit managers, rejected a widely expressed concern that many beneficiaries, who could be bombarded with marketing materials in early May, would find the choices daunting.

“That is really patronizing to seniors,” Merritt said. “If the problem is a luxury of choices, that’s not much of a problem.”

Thompson praised an interactive tool for comparison shopping that his department developed to help seniors and the disabled choose the card best for them.

By logging onto the Medicare website or calling the toll-free Medicare number, seniors who list the drugs they take each month will be given a comparison of cards according to drug prices, enrollment fees and participating pharmacies.

Thompson predicted that competition among insurance companies, HMOs and pharmaceutical benefit managers for the drug-buying business of the country’s fastest-growing demographic group would lower drug prices for all Americans.

“This is going to be a remarkable tool for reducing drug prices across the board for all Americans,” he said.

Thompson said the Medicare market would be so valuable to sponsors of the discount cards that many of them would waive the annual enrollment fee and pass along price discounts of 25% or more.

But the new Medicare law does not set minimum required discounts, and it allows card sponsors to change drug prices, as well as the drugs they offer, as often as once a week.

Medicare beneficiaries, who soon will begin receiving marketing materials from card sponsors, must choose one card and can change cards only once.

Thompson said the Centers for Medicare and Medicaid Services would impose “strict monitoring” of the card sponsor’s behavior to prevent bait-and- switch operations.

Senate Majority Leader Tom Daschle (D-S.D.) and other Senate Democrats introduced a bill Thursday that would require card sponsors to pass on to Medicare beneficiaries at least 90% of the price discounts they negotiate with drug manufacturers.