Under the plan Medicare would endorse discount cards issued by private drug benefit management companies. The companies would negotiate discounts from pharmacies and drug manufacturers on behalf of Medicare members. Beneficiaries are expected to save 10%-25% on prescriptions. Sponsors could steer beneficiaries to preferred pharmacies, preferred drugs, and fill prescriptions by mail.

According to the Bush Administration, the discount drug card program known as Medicare Rx could be implemented quickly without new legislation. Since a protracted battle is expected while Congress and the White House struggle over how to add prescription drug coverage to Medicare, uninsured Medicare beneficiaries could receive some savings right away.

Drugstores oppose the idea - they say they will be forced to sell at prices dictated by government-approved entities. Representative Pete Stark (D-CA) adds that the White House set unlawful standards for the cards and ignored rules that required consultations with Congress and open meetings.

TSCL Legislative Alert: While some discount on prescription drugs is better than paying full retail, TSCL is concerned that employers and other organizations may view this program as an excuse to drop real prescription drug coverage for retirees. In addition, a pharmacy discount card that gives a savings of 10% to 25% will be small help if drug companies and pharmacies respond by raising prices a corresponding amount to maintain profit margins. Please contact your Members of Congress and ask them to take action now to add a prescription drug benefit to Medicare.

Sources: "Democrats Step Up Attack On Bush's Medicare Plan," Adam Entous, Reuters, July 19, 2001. "Medicare Will Endorse Discount Programs," press release, Health and Human Services, July 12, 2001.

If you would like to compare the different Medicare Prescription Plans, click the following link to read "Sorting Through the Maze of Medicare Prescription Drug Proposals" http://www.tscl.org/newcontent/101058.asp 

For updated information on the President’s Prescription Drug Plan click here to read the September 9 Legislative Update with an article entitled, “Prescription Drug Discount Program Blocked by Judge”: http://www.tscl.org/newcontent/101169.asp

This article first appeared in Volume 6, Issue 10 of `The Social Security and Medicare Advisor` newsletter (October 2001). To receive future editions of `The Advisor` in its special, free e-mail version, please click here.