Medicare Drug Discount Cards: How Do They Work?

On June 1, 2004, Medicare beneficiaries were able to use their new drug discount cards for the first time. But around the country, many Medicare beneficiaries, family members and service organizations were asking questions about how to choose a card and exactly how the cards will help beneficiaries reduce their drug costs.

As of May 3 — the first day that beneficiaries could enroll — 73 sponsors were offering discount cards. Of these, 40 were available nationally, and 33 were available regionally. In addition, Medicare HMOs were sponsoring 83 cards, which werw available to their enrollees only. The discounts were valid through December 2005.

Some sponsors were choosing to waive annual enrollment fees, while others were charging up to $30. Prices for some drugs vary significantly. More than seven million lower income beneficiaries were eligible for a free discount card and a subsidy of $600, in addition to the discounts, to help pay for their prescription drugs.

To help address questions about the discount card program, the Alliance for Health Reform and the Kaiser Family Foundation sponsored a May 17, 2004 briefing. Panelists were: Mark McClellan, administrator of the Centers for Medicare and Medicaid Services; Kris Gross, director of the Iowa Senior Health Insurance Information Program; and Tom Paul, chief pharmacy officer of UnitedHealth Group’s Ovations program, which will provide discount drug cards to beneficiaries through AARP. Ed Howard of the Alliance and Diane Rowland of Kaiser moderated the discussion.