Senate Committee Hearing Addresses Medicare Prescription Drug Discount Cards

Medicare prescription drug discount cards "will be very powerful incentives to lower the price of prescription drugs," acting CMS Administrator Dennis Smith told members of the Senate Aging Committee on Tuesday during a hearing, Congress Daily reports (Rovner, Congress Daily, 3/9). Beneficiaries who participate in the drug discount card program, to begin in June, could save an estimated 10% to 25% on prescription drugs, and beneficiaries with lower incomes will receive a $600 annual subsidy for medications, Smith said. However, Craig Fuller, president of the National Association of Chain Drug Stores, told the committee that discounts offered through the cards could change weekly and that the discounts that initially prompt beneficiaries to chose a card may no longer be in effect when they fill their prescriptions. Beneficiaries must remain enrolled in one discount card for a year before they switch cards (Sherman, AP/Dallas Morning News, 3/9). Smith said he thought it was unlikely that card sponsors would try to manipulate recipients into buying their cards and then decrease the discounts because most of the 100 organizations that have applied to offer the cards "are positioning themselves for 2006," when the Medicare prescription drug benefit begins. He added that CMS plans to establish a Web site that would allow seniors to compare discount cards. Fuller also expressed concern that beneficiaries might expect the discount card program to provide more savings than are likely, adding that "some of the expectations are that this is a coverage program with a $10 copay and it's not that" (Congress Daily, 3/9). During the hearing, James Firman, president of the National Council on Aging, said, "It's going to be complicated, but the savings are there if people can navigate through." NCOA, an advocacy coalition of 3,800 seniors organizations, is heading a campaign to inform Medicare beneficiaries about the new law and the discount cards (Sherman, AP/Dallas Morning News, 3/9). Enrollment in the program could be difficult for beneficiaries who would benefit the most, Firman said, adding, "Unfortunately the track record of various past efforts to enroll low-income populations in public and private benefits programs has been at best inconsistent and uneven." AARP said in a written statement that outreach efforts could be threatened by the program's "regulatory barriers" -- such as having two separate enrollment forms for each card -- that could be "unmanageable, with great potential for confusion and error" for outreach workers, CongressDaily reports (Congress Daily, 3/9). The federal government is expected to announce discount card sponsors by the end of March (AP/Dallas Morning News, 3/9).

In related news, AARP CEO Bill Novelli on Tuesday said that he does not regret AARP's endorsement of the Medicare legislation, adding that the group "would do it again in a heartbeat," Congress Daily reports. Novelli was speaking at a policy forum sponsored by America's Health Insurance Plans, the new name of the merged American Association of Health Plans-Health Insurance Association of America. AARP will "work tremendously hard" to inform beneficiaries about the new drug coverage and will "address faults in other parts of the Medicare bill," Novelli said, CongressDaily reports. Novelli also said that it is "unclear" how the public will eventually view the legislation, but he added that a majority of U.S. residents do not yet know enough about its details, according to CongressDaily (Rich, Congress Daily, 3/10).

AARP on Wednesday ran a full-page ad in the New York Times, stating that the group "is continuing the fight for affordable prescription drugs," calling for "pharmaceutical companies ... to do their part" (AARP ad, New York Times, 3/10). Novelli on Monday sent a letter to 16 major prescription drug companies, requesting that they increase prices for existing drugs no faster than the Consumer Price Index and that they support legislation that would permit U.S. residents to purchase medicines from foreign nations, as long as such bills include strict procedures to ensure safety (California Healthline, 3/9). The ad directs reader to AARP's Web site to "read our letter or to learn more about the new prescription drug benefit in Medicare" (New York Times, 3/10).