Final Rule Issued for Medicare Drug Discount Cards

Send this article to a friend.

Printer friendly version.

Final Rule Issued for Medicare Drug Discount Cards

The Bush Administration is once again trying to offer prescription drug discount cards endorsed by Medicare. The long-delayed program is undergoing a court challenge, and despite revisions to the original proposal, its future remains uncertain.

The Medicare Rx prescription drug discount card was proposed to help Medicare recipients with no prescription drug insurance buy their drugs at discounted prices. While not a replacement for prescription drug insurance, the government expects Medicare beneficiaries would save 10% to 13%. Department of Health and Human Services (HHS) officials estimate that the typical senior spends $1,350 per year on prescription medications. They expect savings of $170 per person once the program is phased in.

In 2001, trade groups representing pharmacies, which fear they will lose money under the program, sued to stop it. The court put the plan on hold saying the administration lacked the authority to implement the program without congressional authorization. Although HHS recently issued final regulations, it remains unclear whether the changes will satisfy the court.

Editor’s note: According to a survey by the Kaiser Family Foundation, prescription discount cards appear to offer significant savings, especially for Medicare recipients with limited or no prescription drug insurance and who need drugs to treat chronic conditions. But despite revised regulations there continues to be no government guarantee that the proposed Medicare Rx Discount card will offer any better deal to beneficiaries than what they might find among currently available prescription drug discount cards. Indeed, Medicare Rx may leave some worse off than before.

Shortcomings of Medicare Rx include the following:

The amount of savings to Medicare beneficiaries is uncertain. The Centers for Medicare and Medicaid Services (CMS) would allow card sponsors the option of providing either lower prices or “pharmacy services.” Discounts will vary from company to company, just as they do now.
Medicare Rx card sponsors may charge as much as $25 per person per year. Current commercial discount drug card enrollment fees vary, from as much as $84 per family member per year, to no enrollment fees at all. TSCL members, for example, pay no additional enrollment fees for the Mature Rx® prescription drug discount card. (For more information on the Mature Rx® card, click here: http://www.tscl.org/NewContent/100200.asp.)
Medicare recipients would only be allowed to enroll in one Medicare Rx plan at a time, and could only switch every six months. Currently Medicare recipients may enroll in as many discount drug card programs as they wish. Because the discount drug card savings vary, some programs save more money on certain drugs than others. Seniors taking multiple prescriptions may find it advantageous to enroll in more than one plan. This would not be allowed for persons enrolled under Medicare Rx.
Comparative price information may be hard for many Medicare recipients to access. The new regulations strengthen requirements for comparative information on drug prices and require that prices must be available on the Internet. Seniors without Internet access may have problems getting the information they need. Currently comparing prices among the multiple discount card plans is difficult due to a lack of standard understandable methods for describing discounts and pricing.
Frequent price changes. Regulations permit card sponsors to change prices or remove drugs from the approved list every 60 days, representing little improvement over existing programs.

Sources: “HHS Issues Final Regulation on Medicare-Endorsed Prescription Drug Card Initiative,” CMS, August 30, 2002. “Final Rule Is Issued For Senior’s Drug Cards,” Marc Kaufman, “The Washington Post,” August 31, 2002.

For a related story, see “Medicare Rx Discount Card Sent Back to Drawing Board” at http://www.tscl.org/NewContent/101304.asp.

December 2002