On May 20, the House Energy and Commerce Subcommittee on Health heard testimony regarding the implementation of the Medicare Prescription Drug Discount Card and the Transitional Assistance Programs that will go into effect in June. The programs were enacted as part of the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 (P.L. 108-173).
Chair Mike Bilirakis (R-FL) said that the new Medicare Prescription Drug Discount Card Program is “an important first step” in providing millions of seniors with assistance in purchasing their prescription drugs. He noted that although the discount cards may not be perfect, the savings they provide are “a heck of a lot better” than what seniors had under the traditional Medicare program.
Arguing that what seniors liked most about the Medicare program was its simplicity, Ranking Member Sherrod Brown (D-OH) said that seniors are now faced with “mountains of glossy brochures” promoting the new discount cards, which will intimidate many seniors from taking advantage of the discounts.
Explaining that drug card sponsors began marketing and enrollment efforts on May 3, Centers for Medicare and Medicaid Services (CMS) Administrator Mark McClellan stated, “We are already seeing evidence of significant savings between 10-17 percent off the retail prices that the average American pays, and even greater discounts of 30-60 percent or more on generics.” He also noted that low-income individuals eligible for the Transitional Assistance Program could “save 30 percent to over 96 percent on individual brand name drugs that are commonly used by the Medicare population when both the discount and transitional assistance are taken into account.”
Dr. McClellan addressed concerns that Medicare beneficiaries are having difficulties accessing the Medicare website and toll-free number. “We have worked quickly to improve the program and we will continue to do so as we identify problems,” he stated, adding, “At 1-800-Medicare, we tripled the number of customer service operators from 400 to more than 1,400 available by last week. In recent days, we added another 600 customer service staff, and we expect to add many more trained representatives in the next couple of weeks to handle the unprecedented number of callers in a timely and effective manner. We’ve also taken steps to reduce the time that our customers have to take when they call, by adding voice messages that can help callers to be better prepared when they reach a customer service representative.” Dr. McClellan also noted that low-income Medicare beneficiaries participating in State Pharmacy Assistance Programs could be automatically enrolled for the $600 credit on a Medicare-approved drug discount card.
Testifying on behalf of the National Association of Chain Drug Stores, Craig Fuller shared the Pharmacy Care Alliance’s experience in developing a discount card program. “Our card program is structured around simple principles, which we believe are resonating with seniors,” he stated, “Namely, that seniors should have the right to choose the retail pharmacy from which they want to obtain their pharmacy services, and that seniors should have the ability to obtain their maintenance medications through their local retail pharmacy or mail order.” Mr. Fuller offered suggestions for improving the Medicare Prescription Drug Discount Card Program: information about “wrap around” benefits must be provided to pharmacies at the point of care quickly by the card sponsor to coordinate benefits; all card sponsors should collect information from beneficiaries at the point of enrollment about other potential card programs or sources of coverage they already have; the CMS must allow card sponsors to adjudicate claims transactions for drugs and supplies covered under the discount card program online; and the CMS must be diligent in its education materials to make it clear to beneficiaries that card-sponsored prescription drug prices will likely not remain the same during the year and that drugs covered by the discount are subject to change.
Describing the drug discount cards as “much ado about very little,” Ron Pollock of Families USA argued that Congress should have enacted legislation to contain prescription drug costs or allowed Medicare to negotiate for lower drug prices in a similar fashion to the Department of Veterans Affairs. He stated, “These savings would have allowed Congress to provide a comprehensive benefit that would truly excite Medicare beneficiaries and that would have helped the states deal with their Medicaid budget crises.” Mr. Pollock also contended that the new program is too complex for most seniors. “Most seniors are not internet comfortable,” he stated, “And most of all, we need to remember that about 20 percent of Medicare beneficiaries, about 9 million people, have some form of cognitive or mental illness. For these people, it is not a joy to shop among 40+ different plans — it is a nightmare — a task so daunting many will not even try.” Mr. Pollack urged Congress to provide more funding for Medicare to implement the prescription drug benefit in 2006 and for the State Health Insurance Assistance Programs.
