Medicare Drug Discounts: Confusing But Worth It

Report finds program's early bumps can be smoothed out

WEDNESDAY, July 28, 2004 (HealthDayNews) -- A new report finds the Medicare drug discount card program is still bewildering to many beneficiaries, but it can offer savings to those who persist long enough to figure it out.

"Everyone recognizes that this is really a heroic effort on the part of the administration to get this program up and running on schedule," said Julia A. James, one of the authors of the report. "There are still some bumps in the road. This is our first look at this card program."

The report, Medicare Drug Discount Cards: A Work in Progress, was prepared by Health Policy Alternatives for the Kaiser Family Foundation and unveiled Wednesday.

The discount card program and a transitional assistance program for low-income beneficiaries are intended to serve as a bridge to the Medicare Prescription Drug, Improvement and Modernization Act of 2003, which will add outpatient drug benefits to Medicare at the beginning of 2006. The discount drug card program first became available in early June.

According to the Dr. Mark McClellan, administrator for the Centers for Medicare and Medicaid Services, more than 4 million beneficiaries have now signed up for a Medicare-approved discount card. Most were auto-enrolled, but the number of voluntary enrollees seems to be on the rise. About "100,000 are signing up almost entirely on an individual basis per week," he said at a news conference Wednesday. "That's close to 25,000 every business day, putting us well over the 50 percent mark of what people thought was going to be the total."

In general, however, slow enrollment has been attributed to the overwhelming amount and quality of information. "There are too many choices," said Michael M. Hash, another of the report's authors. "Choices clearly have value, but what we've learned so far is that excessive choice is confusing and probably accounts for the slowness of enrollment of benefit into this program."

The report authors, at least one of whom holds a Ph.D., admitted that they had a hard time getting information from publicly available Web sites, the same ones that Medicare beneficiaries are likely to consult. The card sponsor Web sites, in particular, were "not consistent and not terribly informative," said Beth C. Fuchs, another author. That, in turn, made it difficult to know who the sponsors really were, she added.

It was also difficult to figure out which drugs were covered on different cards. Some programs used the adjectives "most" or "many" to describe medications covered by their cards. Others had only partial lists. "If you have high-cost drugs, you need to be careful," Fuchs warned.

Outreach, enrollment and education efforts seem to have improved somewhat, with the average wait time on the toll-free number down to two minutes. One reporter attending the briefing, however, said she had recently been kept waiting an hour.

To get a sense of the bottom line, the authors compared 10 commonly prescribed medications on seven different card programs. Although the findings cannot be generalized, James said, "We did find that at least some of the cards do offer savings [compared to retail prices]. Choice of card makes a difference. You have to do comparison shopping if you want to maximize savings."

The cards surveyed could offer savings of between 8 percent and 61 percent compared to retail prices cited by the Maryland attorney general on one drug. Using mail order resulted in even more savings -- 23 percent to 89 percent, depending on the product, the card program and the location.

If someone were to purchase all 10 drugs at once (which they wouldn't in real life), prices in the card programs were 19 percent to 24 percent lower than retail prices cited for the Baltimore area; 17 percent to 22 percent less than rural Maryland prices; and 27 to 32 percent lower for mail order compared with Baltimore prices. offered prices that were competitive with the cards.

The report said that prices of drugs did not increase notably after the start of the discount card program.

While one would think this level of confusion would not bode well for the inauguration of the 2006 program, the study authors stated that the infrastructure being developed now would greatly ease that transition.

More information

Visit the Kaiser Family Foundation to view the report.

SOURCES: July 28, 2004, teleconference with Mark McClellan, M.D., Ph.D., administrator, Centers for Medicare and Medicaid Services, and Beth C. Fuchs, Ph.D., Michael M. Hash, Julia A. James, all of Health Policy Alternatives; Kaiser Family Foundation report, Medicare Drug Discount Cards: A Work in Progress
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