The new Medicare prescription drug benefit will roll-out in two stages. The first stage began this month (May 2004). Medicare beneficiaries can now sign-up for a Medicare drug discount card that will offer benefits starting June 1, 2004. Those with low income may be eligible for a $600 credit on their card for each of the years 2004 and 2005. The discount card program is scheduled to be phased out beginning in December 2005 with the start of Medicare Part D, the second stage of the drug benefit.

Those with Medicaid/MassHealth are not eligible for a discount card, as they already have drug coverage. When Medicare Part D begins, MassHealth will no longer offer drug coverage and members will choose whether or not to participate in Medicare Part D. Ideally they will be automatically switched unless they opt out, but this has yet to be determined.

The Cards

• The program is voluntary.
• Annual enrollment fee can be no more than $30.
• The discount is expected to average about 15%. Benefits will vary from card to card.
• The Medicare drug discount cards are offered by private companies. Nationally Twenty-eight companies, mostly large insurers and pharmacy benefit managers are offering the discount cards to anyone who qualifies. Another 43 companies, including Blue Cross, will offer them exclusively to their own HMO members. So the challenge to consumers of finding the right card for them is daunting.
• Those enrolled in a Medicare+Choice plan (Medicare HMO) that offers a Medicare discount drug card, can only choose that card. Of the Massachusetts Medicare HMOs, only one, Blue Cross' Medicare HMO, Blue Care 65, is offering a card, and only to their members. If these members want a card their only option is the Blue Cross card. Tufts Health Plan's Secure Horizons and Harvard Pilgrim Health Care's First Seniority, and other Massachusetts Medicare HMOs are not offering a card to their members, so members can choose any of the other open discount card programs.
• Beneficiaries are advised to compare cards before signing up for one. Beneficiaries should take into account whether the medications they take are included in the benefit for that card, the discount available via that card, and other factors such as whether the card offers access to local pharmacies (plans must offer retail pharmacy access; they may also offer mail-order). To compare cards, contact Medicare via the website, www.medicare.gov , or through the Medicare hotline 800 633-4227, TTY 877 486-2408. Note that Medicare has been overwhelmed by queries. They have pledged to add more capability, but in the meantime beneficiaries may want to contact them off-hours or be prepared to wait.
• One can only sign-up for one Medicare discount card at a time (though one can also have other, non-Medicare cards. See accompanying story). One can disenroll at any time, but generally cannot switch to another card until the next "annual coordinated election period". There are exceptions: those who are moving to a new service area, moving in or out of a nursing home, joining or leaving a Medicare HMO, or whose card sponsor is terminating the drug-discount card program, will have a "special election period."
• The company/sponsor that provides the card, however, can change benefits at any time during the year INCLUDING CHANGING DRUGS COVERED AND DISCOUNTS PROVIDED. The sponsor can only drop an individual's coverage if the individual does not pay the annual enrollment fee in a timely manner.
• The annual coordinated election period for 2004 is from now until December 31, 2004. The annual coordinated election period for 2005 is from November 15, 2004 until December 31, 2004 for coverage beginning January 1, 2005 and ending December 31, 2005. In early 2006 a "transitional period" of coverage will continue as beneficiaries are enrolled into Medicare Part D.
• Medicare-approved cards will bear the "Medicare Approved" logo and will be listed on the Medicare website and via the hotline. There are other cards being offered that are not Medicare-approved (see accompanying story).

Discount Card Eligibility

• Must be a Medicare beneficiary.
• Not Medicaid/MassHealth Member

$600 Low-Income Credit or "Transitional Assistance"

• One is not eligible for this credit if the federal govern-ment (such as through the VA or military retiree health [TRI-CARE]) helps pay for his/her prescription drugs.
• If an EMPLOYER provides coverage that helps pay for prescription drugs:
  • IF through a Medicare HMO or Medigap policy- eligible for the credit,
  • BUT otherwise not eligible for the credit.
• The low-income guideline for 2004 is $12,569 for an individual and $16, 862 for a married couple (note this is a federal benefit, so at this time, same-sex married couples would not be viewed as married, ironically benefiting them). Limits are higher in Alaska and Hawaii.
• If one meets the low-income eligibility criteria, Medicare will pay the card's enrollment fee and will pay 90 - 95% of the cost of drug purchases until Medicare has paid $600. The beneficiary is responsible for the 5 - 10% co-pay during this period.
• If one signs up for a discount card in 2004 and meets the low-income guideline, she/he will receive the full $600 credit for 2004 (any leftover credit will rollover into 2005, even if enrolled in a different card pro-gram) and an additional $600 in 2005. If one does not sign-up for a card before March 31, 2005, there are reductions in the 2005 credit; it decreases $150 for every 3 month period. (i.e., of one enrolls between April 1 and June 30, 2005 she/he would only receive a $450 credit).

Will the drug card give me the best deal?

That's a good question. It depends.

• Generally beneficiaries will need to compare plans and cards based on what medications they take. The challenge is that costs and benefits may change while beneficiaries are "locked in" to a particular Medicare-approved card.
• Medigap benefits and employer sponsored plans will likely offer better prices than the discount card programs.
• As mentioned above, most Mediare HMO plans in Massachusetts are not offering a card to their members because they already receive sizable discounts without a special card. According to the Boston Globe, Tufts Health Plan and Harvard Pilgrim Health Care expect their members to get higher discounts than will be offered by the Medicare-approved cards.
• For those with Prescription Advantage, IF they also qualify for the low-income "transitional assistance" from the Medicare discount drug card, they will be better off using the Medicare card first. In that instance the co-payment under Medicare would likely be lower than the Prescription Advantage co-pay. Those with Prescription Advantage who do not qualify for "transitional assistance" would probably be better off using Prescription Advantage.
• Non-Medicare-approved cards may offer better discounts depending on the drug (see accompanying story).
• Buying from Canada may be less expensive.

Medicare "Part D" Update

As of January 2005 Medicare will expand coverage for preventative services that will include an initial physical exam on enrollment and heart disease and diabetes screening. Medicare will also be creating and evaluating a Chronic Care Improvement Program. It will include components such as education, care coordination and the use of new health monitoring technologies.

Additional Information

This article was adapted from the following publications which also offer more information. Staff can review the CRC's copy or you can order your own:

• Medicare Changes That Could Affect You, AARP Medicare Drug Discount Card: helping those with limited incomes, AARP
• SHINE Fact Sheet: Frequently Asked Questions about the Medicare-Endorsed Discount Drug Card Program, SHINE Health Insurance Counseling Program, MA EOEA, 1/28/04
• Consumer Advisory: Medicare Reform, Office of Attorney General Thomas F. Reilly, Spring 2004
• Drug Discount Plan Moot For Many In Mass. A Number Of Seniors Already Get More Benefits Than Medicare Bill Will Provide, Health Insurers Say, the Boston Globe, by Liz Kowalczyk, 04/20/2004.

05/2004