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Prescription Discount Drug Cards:
A Step Forward

For all the hype that preceded the June 2004 activation date for the discount drug cards, several surveys are already showing that while American seniors agree that the drug cards are a good idea, most of them know very little, and in many cases, nothing at all about the Medicare discount drug program and how it works. As information about the Medicare-approved drug discount cards becomes more widespread, more seniors will be able to save as much as 20% on name-brand drugs, and at least 40% on generic drugs. It’s important to remember that all of these Medicare-approved drug discount cards will not be a permanent fixture. They were created to fill a void to help beneficiaries with prescription drug costs until the complete, federal prescription drug coverage program - Medicare Part D - takes effect in January 2006. 

All those who have Medicare and do not receive prescription drug coverage through Medicaid are eligible for a Medicare-approved discount drug card. Depending upon your annual income, you may still have to pay a 5% or 10% coinsurance for your prescription drugs even with the use of a discount card. According to federal guidelines with respect to the discount drug cards, “income” is considered to be money received through retirement benefits from Social Security, Railroad Retirement, the federal government, or other sources. Income also includes benefits received for a disability or as a veteran, plus any other financial sources that would be reported for tax purposes. These income limits change every year, and if you live in Alaska or Hawaii, the income limits may be different from the rest of the country. Medicare beneficiaries who have incomes below 135% of the federal poverty limit ($12,569 for singles and $16,862 for married couples) and do not have other types of prescription drug coverage are eligible for the $600 credit. If you apply between the following dates, you’ll receive the corresponding amount of credit, if you qualify:

 January 1 - March 31, 2005 $600 credit
 April 1 - June 30, 2005 $450 credit

 July 1 September 30, 2005 $300 credit
 October 1 - December 31, 2005 $150 credit

However, you won’t receive the $600 credit if you already have outpatient prescription drug coverage from any of the following: Medicaid; TRICARE for Life (military health insurance); employer group health plan or other health insurance coverage including some Medicare Managed Care plans (other than a Medicare + Choice plan or Medigap policy); or FEHBP (health insurance for Federal employees or retirees). Even if you don’t qualify for the $600 credit, you can still qualify for a discount drug card. The discount cards are good until December 31, 2005, when Medicare’s new prescription drug benefit starts on January 1, 2006. For a small annual enrollment fee (usually between $25-$30), these cards are designed to help save on outpatient prescription costs. You’ll have to pay a new enrollment fee at least every calendar year, or you may have to pay it more often if: you voluntarily decide to switch to a different discount card because of moving to another; you switch to a different discount card after you join or leave a Medicare Managed Care plan; you choose a new discount card because the company stopped offering your discount card; or, you switch to a different discount card after you enter or leave a long-term care facility. Remember, if you don’t pay the annual enrollment fee, the company can cancel your discount card at any time. Also, it doesn’t matter what part of the calendar-year in which you joined a Medicare-approved drug discount card, you’ll still have to pay the entire annual enrollment fee.

The Medicare-approved drug cards have been designed to help lower outpatient prescription drug costs by offering a discount from the actual price of prescription drugs, as well as from some over-the-counter medications, if: you don’t have health insurance that covers outpatient prescriptions; you have health insurance that limits how much it will pay for outpatient prescriptions; you don’t get any type of discount off the price of your outpatient prescriptions; or, if you currently get a discount that is less than what is offered by a Medicare-approved drug discount card. It’s important to note that the discounts offered by the drug cards will not apply to drugs that Medicare currently covers (like some cancer drugs). The Medicare-approved discount drug card program works by having private companies, like large pharmaceutical or insurance companies, offer a discount card to people with Medicare. For these companies to become a part of this program, they must apply to Medicare and meet certain standards set by Medicare...Continued
 

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