(9/04) - New Medicare drug discount cards were launched in May and were aimed at helping Medicare recipients until the full prescription drug benefit program begins in 2006. The discount cards save consumers money but not all seniors have taken advantage of it.

This may be because there’s a large array of choices among several dozen drug cards. This is causing confusion among older and disabled seniors. But, consumes will now be able to compare and make choices in selecting the best card to meet their needs.

A wide variety of options are available to consumer including private discount cards and low margin retailers. AARP boasts average discounts of nearly 20 percent off retail prices. Major retail chains like CVS sponsor drug discount programs. Several major pharmaceuticals have sponsored senior discount programs to help low-income seniors without prescription coverage. Campaigns to publicize these programs are underway.

There’s lots of help available through the Medicare Web site www.medicare.gov and toll-free phone number at 1-800-Medicare where a pared-down list of the five best cards by price and convenience based on ZIP code and drug needed is available.

Although the Medicare drug discount card is available to 77% of our Medicare beneficiaries, it is of greatest value to those who have no other source of prescription drug coverage regardless of income.

Low income seniors, whose income is under 135% of the federal poverty level ($12,569 for singles and $16,682 for couples), are eligible for a $600 a year subsidy to help with their drug purchases if they have no other drug coverage. In addition, many of those beneficiaries are also eligible for special low prices offered by pharmaceutical manufacturers through senior drug discount card programs and patient assistant programs.

There is a co-pay associated with this program. Those below 100 percent of the poverty rate would pay 5 percent of the cost of their prescription until they exhaust their cash subsidy, with the rest deducted from their Medicare account. That amounts to $30 for beneficiaries spending $600 for prescriptions.

Seniors with incomes of 100 percent to 135 percent of the poverty rate would pay 10 percent of the cost until they exhaust their cash subsidy. That amounts to $60 for a beneficiary spending $600 for prescriptions.

After the cash subsidy is spent, low income beficiaries are liable for the full discount cost of their prescriptions. That’s where the discount cards offered by manufacturers can have an effect.

According to a U.S. Department of Health and Human Services study, prices for brand-name drugs under the discount program could range from 10 to 17 percent below retail. Many discount cards offer lower-cost through their mail order service. Other research for the Kaiser Foundation showed that cards offered 8 to 61 percent savings off retail prices.

According to The Chartis Group, the estimated economic value to the Medicare beneficiaries in Vermont without drug coverage today from discount cards in 2004-2005 is $12.7 million.

The Chicago Tribune published a matrix last fall showing how the new RX discount plan benefits Medicare recipients. The following are some spending points from the matrix.

                         Senior Income
               Poor       Low     Moderate - High
Annual RX
Drug Expense
  $1,000       $ 64      $  613       $  858
  $3,000       $191      $  913       $1,920
  $5,000       $229      $1,092       $3,920

   Poor:     Annual income under $12,569 (single) or 16,862 (couple)
   Low Income:     $12,569 - $13,965 (single) or $16,862 - $18,735 (couple)
   Moderate or Higher Income:     Annual income more than $13,965 (single) or $18,735 (couple)

There are about 17,000 seniors in Vermont who aren’t eligible for the benefits of the new Medicare prescription drug discounts because their income source is too high. These seniors can still benefit from private insurance and Vermont in the past looked at ways to reduce drug costs through some sort of catastrophic coverage based on a percent of a person’s income.

Both the temporary discount card program and $600 annual subsidy end in 2006 to be replaced by the full Medicare prescription drug benefit program, often called Part D. However, if this interim program is successful, it could continue and even replace the Part D program in 2006.

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Thank you for your calls and notes. I can be reached at 658-3975 (home), 1-800-322-5616 or 228-2228 (State House) and via e-mail.

Rep. Frank Mazur
South Burlington