The Medicare Drug Discount Card: A publicprivate partnership July 28, 2004 GraceMarie Turner Galen I

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The Medicare Drug Discount Card A
public-private partnership July 28,
2004Grace-Marie TurnerGalen Institute
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Benefits of the Medicare drug card

• Immediate drug discounts for all Medicare
  beneficiaries
• Generous assistance for lower-income seniors
• Private competition and negotiated pricing
  introduced into Medicare

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Three levels of assistance

• Discounts on prescription drugs
• 600 subsidies this year and next for low-income
  seniors
• Easier access to pharmaceutical company
  assistance programs

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Prescription drug discount cards

• Cards were activated June 1, but no penalties for
  delayed enrollment
• Cards available to all Medicare beneficiaries,
  except those on Medicaid
• Seniors can enroll in the card plan of their
  choice, but only one card at a time

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Discount cards

• About 34 national cards, 6 with zero enrollment
  fees (30 is maximum)
• Plans must provide at least one drug in each of
  209 therapeutic categories
• Studies show savings estimates range from 11 to
  95

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Transitional Cash Assistance

• Special help for low income seniors
• Subsidies of 600 a year this year and next on
  the discount card
• Available to seniors lt135 of poverty (12,569
  indiv. / 16,862 couple)
• Small co-payments free enrollment
• Any balance left in December rolls over to 2005.

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Private drug assistance plans

• Many companies will boost value of the drug
  discount card
• Pfizer 15 for a months supply
• Lilly 12 for a months supply
• Merck 0 after 600 is spent
• GSK and Together Rx offer discounts up to 40 and
  free drugs for low income

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Coordination with State programs

• Medicare beneficiaries can join the discount card
  program and still participate in any State
  Pharmaceutical Assistance Program
• States are educating seniors about discount cards
  and 600 subsidy
• States can pay co-payments for low-income
  beneficiaries and enrollment fees for
  higher-income beneficiaries

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Studies show huge savings

• Medicare approved drug discount cards
• Transitional low-income assistance
• Drug company assistance programs
• Studies show the three components supercharge
  the temporary drug benefit.
• Antos, AEI study is the best. Others

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Center for Medicare and Medicaid Services

• 85 savings off retail prices with drug
  discounts, 600 transitional assistance, and drug
  company wrap-around programs.

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The Lewin Group

• Drug price discounts and 600 subsidy equal
  savings of 29 to 92 for low-income seniors.

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Business Roundtable

• Seniors will receive 24.1 billion in new drug
  benefits between 2004 and 2006.
• Savings shown on state by state and district by
  district basis. E.g. Virginia. 131.7 million
  in savings this year and next.

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Answering the critics

• All drugs may not be covered
• Sponsors may drop the drug seniors need most
• Plans can change prices weekly
• Rising drug prices will erode savings

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New incentives

• Seniors will have a choice of private plans, with
  incentives to shop wisely
• Competition will force companies to treat
  beneficiaries fairly
• Information available at 1-800-Medicare or
  www.medicare.gov

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Political battles will continue

• Key parts of the new Medicare law can lead to
  transformative changes
• But cost pressures will continue to drive
  political demands for changes
• One recommendation Allow the funded drug card
  program to continue as a option in 2006 with more
  generous funding and private catastrophic
  coverage.

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Making consumersthe winners
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