Individuals with annual incomes less than $12,123 and couples with less than $16,362 in 2003 will be eligible for special benefits when they get a drug discount card as long as they have no other drug coverage, including medicaid and Tricare. (The income limits will increase slightly in 2005.)
For those who qualify, the Centers for Medicare Services pays the fee for the card and 90% to 95% of drug costs, up to $600 a year. You don't need to prove your income, as CMS can verify it by reviewing available data, such as tax returns and social security records. There is no asset test. All medicare drug discount cards will offer low-income benefits.
HEALTH How to Win Medicare Card Monte by Matt Dembicki
The promise behind the new medicare drug discount cards, available in May, was simple: A break on drug costs of at least 15%. But choosing the right card for you or someone you know could be as tricky as finding the queen in a game of three-card monte.
One rule of thumb: If your former employer offers drug coverage, that benefit will likely be superior to any card discount.
You also can be sure that discounts from cards issued by medicare HMOs and PPOs will be at least as generous as those from cards sold by private pharmacy-benefit companies and drug chains. The system was set up that way to make HMO drug coverage more competitive than traditional fee-for-service medicare with additional medigap coverage, thus encouraging beneficiaries to switch to managed care.
The Department of Health and Human Services launched a site April 28 to help you compare cards and drug discounts. You can also call 800-633-4227 for help choosing among the 28 issuers approved to provide the cards.
Rules of the game
Regardless of income or other drug coverage, anyone on medicare may buy a card, which will cost $30 or less. Enrollment in card programs begins May 3 and participants will begin receiving discounts June 1, perhaps earlier. You can buy only one medicare-approved card, but at least two cards must be offered in each state. The cards themselves will fall into two general categories:
General cards will be offered through companies such as pharmacy-benefit managers and chain pharmacies. A company that issues a general card must offer it to all medicare beneficiaries wherever it offers the discounts.
Exclusive cards will be offered by some managed health-care plans, such as HMOs and PPOs that participate in Medicare Advantage plans (formerly Medicare+Choice). The cards will be issued to enrollees in the plans' service areas.
If your HMO offers a card, it will be the only medicare-endorsed card that you can use.
Details on how the exclusive cards will work aren't clear yet. But one possibility is that buying a card would give enrollees access to additional discounts on the drugs listed in an HMO's formulary.
Although it's still uncertain how many cards you'll have to choose from, residents of large cities, such as New York City, and states with a large number of HMOs, such as California and Florida, are likely to have several options. Of course, for you to use an exclusive card, you'll have to move from traditional medicare to a Medicare Advantage HMO or PPO.
And even if you have more than one general card to choose from, you may find it difficult to compare the potential cost savings. That's because:
An issuer can change the discounts it offers as often as every week. If you buy a card because it offers the lowest price on your prescription drugs, be aware that the price could change.
Card issuers will offer different discounts on the same drugs, and a single issuer can offer varying discounts on the same drug in different areas. Card sponsors must offer drugs in each of 200-plus therapeutic classes -- such as anticoagulents, for instance -- but that doesn't mean that each card will offer discounts on the same drugs. For example, the cards in your area may not cover the brand-name drug you have been prescribed, or the issuer may offer a generic or other brand-name substitute.
If you are taking several drugs, a single discount card is not likely to cover all of them. If that's the case, you'll have to get the drugs' prices from each card issuer and do the math to determine which card will save you the most.
Some of the best drug-discount cards will be available only through HMOs. "I think most beneficiaries are going to find that the cards offered by the health plans they are enrolled in are going to be as good as they get in the market," says John Gorman, a health-care industry consultant in Washington, D.C. (If your HMO doesn't offer its own card, it may team up with another issuer, such as a pharmacy-benefit manager, to offer a discount.)
Another incentive for you to give HMOs a second look is that the plans received higher payments from the government this year. Most plans are using the payments to lower premiums and co-pays, and enhance their overall drug benefits.
Before you sign up
Keep these points in mind before you sign up:
Be alert to scammers. Swindlers don't miss a beat. CMS has already received reports of unscrupulous individuals selling fake discount cards either by going door-to-door or through phone solicitations. These people are out to steal personal financial information from you.
All legitimate cards will carry an official medicare seal, and the seal will also appear on all promotional material. Also, visit the medicare Web site to confirm that the card issuer is an approved participant.
You can sign up for only one medicare-approved card. You can continue to use non-medicare discount cards, but you get only one discount on each purchase.
You can switch to another card. If you want to switch, the open-enrollment period runs from November 15 to December 31, 2004. Your new medicare-approved card will last for one year beginning January 2005.
Make sure your pharmacy will accept the card. Not all pharmacies will accept all cards, so check first. A card may not be a good deal if receiving a discount requires a lot of extra driving. If you travel often or spend weeks or months in another state, find out if the drugstores you use there will also accept the card.
What happens if you move outside the card's service area, transfer into or out of a long-term-care facility, or enroll or disenroll from a Medicare HMO? You can apply for another discount card. Notify your current sponsor that you intend to buy a new card. Doing so requires paying another enrollment fee of $30 or less, and you won't get a refund on the first card.
GETTING STARTED
