Savings in the cards
Picking the best Medicare drug discount card is tougher than ever
The wallets of senior citizens sure have been getting fatter over the past few years--but not from extra cash. Instead, they've been bulked up by the host of prescription discount cards sponsored by groups ranging from AARP to drugstore chains. The most recent entrant into the discount derby? Uncle Sam. As part of the Medicare bill passed last year, the government in May began offering a discount-card program aimed at the more than 13 million Medicare beneficiaries without prescription drug coverage. It's intended as a stopgap measure to give some relief before the more extensive--and more complex--Medicare drug benefit kicks in at the beginning of 2006. Four months after launch, the program is garnering mixed reviews. And while there is still no quick rule of thumb for deciding whether the federally endorsed discount card is the best choice, some trends have emerged that make it easier to sort out.
First, a short primer. The card program is voluntary and open to any Medicare recipients who aren't covered by Medicaid, though it is less likely to be helpful for those who already have good private drug coverage. Participants sign up online or by mail for one of numerous national or regional cards, all of which have the Medicare seal of approval but are sponsored by for-profit entities, mostly pharmacy benefit managers or managed-care companies. Choosing a card is complicated, but key factors to take into account are which programs are accepted by local drugstores, which drugs are covered, and the size of the discounts on the drugs you take. (Most cards also offer a mail-order option.)
Once you've chosen a card, which may have an annual enrollment fee of as much as $30, you're locked into that program for a year--though card sponsors can change prices at will, a much-criticized provision of the program. (Despite fears of bait-and-switch price hikes, two studies have found that prices haven't significantly moved since June.) Another provision of the new law gives a free card and a $600 drug-purchase credit to low-income cardholders--individuals who make less than $12,569 or couples making less than $16,862--who don't already have coverage through Medicaid.
So, after three months, what's the verdict? Measured by foot traffic, not good. About 4.3 million people are now enrolled in the program, according to the Centers for Medicare and Medicaid Services, including over 1 million who qualify for the $600 low-income credit. That doesn't bode well for getting CMS, as the Medicare agency is known, to its target of 7.3 million people signed up by the end of this year. Even President Bush said in June that "we've got some problems" with the cards. And the interest may have fallen off recently. "We had a forum scheduled in Orange County at a retirement community where they usually get several hundred people for anything," says Bonnie Burns, training and policy specialist with California Health Advocates, a consumer group. "They asked us to cancel."
Confusion. Why so little interest? Advocacy groups like Families USA and the Medicare Rights Center criticized the sign-up as confusing. Initially, the website designed to compare the programs (www.medicare.gov) had bugs--including problems listing correct dosages for liquid medicine--and calling the help line (1-800-MEDICARE) produced interminable waits. Since many elderly people lack Internet access or have trouble hearing over the phone, sons, daughters, and neighbors have stepped in--and they have found the process complex as well. "I spend my life doing policy-wonk stuff, and I was confused trying to help my mother," says Gail Shearer, director of health policy analysis with Consumers Union. Without some Internet savvy, or help from a friend or relative, evaluating the cards was extremely difficult.
CMS has revamped its site, adding different ways to search for drug names, distilling the number of card choices down to the top five best deals for the individual, adding an online link to the card sponsors that allow enrollment--and CMS Administrator Mark McClellan said recently that telephone hold times were down to a maximum of two minutes. The government has also ramped up outreach efforts, which explains the commercials you've seen on TV lately. State and community groups have received grants to do person-to-person outreach, since many Medicare recipients don't have easy access to the Internet--the easiest way to compare the programs side by side and then choose one. "The biggest challenge is how we better reach out to seniors eligible for this help," says Mary Grealy, president of the Healthcare Leadership Council, a coalition of health industry executives.
These problems received top billing in the press, discouraging many people. A recent survey by the Kaiser Family Foundation, a nonprofit health policy group, found that 53 percent of those surveyed agreed the cards weren't worth the trouble because the confusion was too high and the perceived benefit too low. "People are quite skeptical," says Tricia Neuman, a vice president with Kaiser. Ruth McKay, 85, of Concord, N.H., hasn't heard anything good about the cards and doesn't trust the current administration; she'd prefer to save money by buying her drugs in Canada. "I was really very wary," she says. She says few of her friends in her retirement community have gotten the discount cards either.
Yet some of the nonbelievers may be missing out on real deals. Another Kaiser study found that in some cases the cards really do provide value, especially if you use the mail-order option (chart, Page 56). A study by the Healthcare Leadership Council found that the best cards offer savings of more than 20 percent, adding up to more than $850 in savings over 18 months for a typical Medicare recipient. But Ed Mills is going to do even better than that this year. The 66-year-old retired banker in Ukiah, Calif., couldn't believe his eyes when he took his new Rx Savings Access card to the drugstore for the first time. His usual monthly bill of $132 for two drugs--Lipitor and a blood pressure medication--dropped to less than $10. "The young lady there the first time I used it said, 'Wow, where'd you get this?'" he recalls. "I got home and thought, 'Maybe she charged you the discount instead of the price.' But when I renewed the prescription, it was the same thing."
Money on the table. So, should you follow his lead? If you qualify for the $600 annual credit, as Mills does, and aren't already covered by Medicaid, you should most likely sign up. Because it's an annual benefit, you'll get $600 this year and another $600 in 2005. "You should absolutely not leave money on the table," says Burns. Even if you're already enrolled in a state pharmacy assistance program (SPAP), the programs may work together to get you greater savings (check with yours for details). For that reason, advocates for the poor are urging the government to automatically enroll all those who already qualify under other aid programs. There's a precedent: Some 2.5 million people were automatically enrolled in the cards by their Medicare HMO s. (CMS says it's still working on the legalities of expanded auto-enrollment; advocates are hoping it will be resolved this fall.) Many big pharmaceutical companies are now working with the Medicare card program to offer discounts and additional aid; many provide free or deeply discounted drugs after the $600 credit is exhausted (story, Page 60). People are automatically enrolled in the manufacturer's discount program when they sign up for the card affiliated with the manufacturer. (To see which cards are affiliated with which companies, go to http://www.cms.hhs.gov/medicare reform/drugcard/mfragre ements.asp .)
If you don't qualify for the $600 low-income credit, the decision of whether to use the new card is less clear. "It's drug by drug, person by person," says Burns. First, are you already enrolled in discount card programs? The pile of plastic already issued by nonprofits like AARP, pharmaceutical companies, and drugstore chains may get you a better deal than the Medicare-approved cards. A report by the Medicare Rights Center found that someone living in Washington, D.C., would receive about the same discount on 10 common drugs from an existing card sponsored by a pharmacy benefit manager as he or she would from the Medicare-approved card.
Those earning a modest income--too high to qualify for the government's $600 credit but low enough to be helped out by programs sponsored by states or manufacturers--should also do their homework before signing up. The Medicare Rights Center report also found that an older adult earning $17,000 a year, living in Washington, D.C., and taking the drugs Lipitor and Celebrex would do better with a Pfizer Share Card, which gives the drugs for $30 per month, compared with $147 with the Medicare-approved card. (The report notes that the Medicare card is more prominently featured on the CMS website, which might mislead people into signing up for a lesser bargain.)
Those SPAP s--which are available in more than 30 states--may also provide better benefits. In Illinois, for example, those making less than $21,218 ($28,480 per couple) might get a better deal under the state's Circuit Breaker program. New York has even higher income limits--$35,000 for individuals and $50,000 for couples--to participate in its cost-sharing EPIC (Elderly Pharmaceutical Insurance Coverage) program. Show your Medicare card at an in-state pharmacy in California, and you'll pay no more than what the state Medicaid program pays for drugs, plus 15 cents, no matter what your income. Check out your state's program to see if it makes the Medicare cards redundant. (AARP has a good guide on its website: http://www.aarp.org/bulletin/your money/Articles/statebystate.html .)
So, are the new discount cards worth the effort? Clearly, there's no easy answer to that question. But the new program provides a good incentive for people who haven't waded into the thicket of options to spend some time researching how Medicare-sponsored cards measure up to the other options. Those who don't have Internet access or who find the process confusing can check with their state health insurance assistance program (known as SHIP) or a community group for assistance. Or ask a trusted friend or neighbor. "There's a lot more help out there than people realize," says James Firman, who heads the Access to Benefits Coalition, which helps low-income Medicare beneficiaries negotiate the system.
One helpful tip for everyone: Beware of scams. There are so many Medicare-endorsed cards that it's hard to keep track of them all, and con artists are taking advantage of that confusion, trying to sell seniors bogus cards that cost $30 per month instead of per year. AARP says to beware of anyone hawking drug discount cards door to door, by E-mail, or on the phone. The legitimate cards require that you, not a salesperson, make the initial contact. And don't respond to phone calls or E-mails asking for personal information in conjunction with your card. If you want to know if a card is legit, call 1-800-MEDICARE to check.
Meantime, policy experts are hoping the government learns some lessons it can apply to the upcoming full Medicare Part D benefit, which kicks off in less than 16 months. "This is just a precursor to 2006," says Robert Hayes, president of the Medicare Rights Center. "There will be a ton of plans offering drug coverage, which will be equally inexplicable to mortal human beings. I hope Congress takes some lessons from the failure . . . to simplify."
HOW MUCH MONEY CAN YOU SAVE?
A Medicare card can cut drug costs, but be sure to compare it to savings available from other discount programs. A Medicare card can reduce the cost of prescriptions at the drugstore, and even more by mail order.
CELEBREX
$198.99 Baltimore retail price (30-day supply)
$159.19 Best price with card (at retail*)
$143.27 Best price with card (mail order**)
FOSAMAX
$87.49 Baltimore retail price (30-day supply)
$62.99 Best price with card (at retail*)
$58.62 Best price with card (mail order**)
FUROSEMIDE
$10.89 Baltimore retail price (30-day supply)
$ 4.25 Best price with card (at retail*)
$ 2.07 Best price with card (mail order**)
LIPITOR
$85.99 Baltimore retail price (30-day supply)
$67.93 Best price with card (at retail*)
$60.19 Best price with card (mail order**)
PREMARIN
$36.99 Baltimore retail price (30-day supply)
$27.37 Best price with card (at retail*)
$23.67 Best price with card (mail order**)
*Best discount among seven selected Medicare discount cards
**Per 30-day supply; mail order requires 90-day supply
Source: Kaiser Family Foundation
Stephen Rountree--USN&WR
Choice of Card Makes a Difference
The difference between the highest and lowest retail drug prices offered by Medicare-approved drug discount cards (30-day supply).
RETAIL PRICES for a 30-day supply of a typical senior's brand-name and generic drugs in Baltimore
Rx PRESCRIPTION
BENAZELPRIL
lowers blood pressure (hypertension)
LIPITOR
lowers blood cholesterol
LEVOTHYROXINE
treats thyroid problems like hypothyroidism
FOSAMAX
prevents bone loss and
increases bone density
PREMPRO
relieves menopause symptoms,
helps prevent osteoporosis
Card with the highest price $278
Card with the lowest price $234
$44 difference
Sources: Medicare.gov, June 28, 2004; Kaiser Family Foundation
Stephen Rountree--USN&WR
This story appears in the September 20, 2004 print edition of U.S. News & World Report.