On June 8, the Senate Finance Committee heard testimony regarding the implementation of the Medicare Prescription Drug Discount Card and the Transitional Assistance Programs that went into effect on June 1. The programs were enacted as part of the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 (P.L. 108-173).
In his opening remarks, Sen. Charles Grassley (R-IA) said that the Medicare drug discount card “is an important first step in filling a void for many of our nation’s seniors and disabled, a void that has prevented them from getting life-saving and life-improving prescription drugs.” Explaining that the program “has been the target of a deliberate campaign to discredit it and confuse seniors about how it works,” he stated, “This kind of politically motivated subterfuge disappoints me. It’s a disservice to the millions of older Americans and people with disabilities who can benefit from a Medicare-approved drug discount card.”
Ranking Member Max Baucus (D-MT) highlighted a number of the problems associated with implementing the discount card program, including incorrect and inconsistent information on the Medicare website, long waits for callers to 1-800-MEDICARE, and low enrollment for those who were not automatically enrolled in the program. “But in my view,” he stated, “the main problem and the root cause of many other problems is that there are simply too many drug card options…I believe in meaningful choice not choice for the sake of ideology. This drug card program has elevated the ideology of choice over the best interests of Medicare beneficiaries.”
Explaining that drug card sponsors began marketing and enrollment efforts on May 3, Centers for Medicare and Medicaid Services (CMS) Administrator Mark McClellan stated, “Recent studies show that the prices on brand-name drugs available through the cards are 11 to 18 percent or more below the average prices actually paid in neighborhood pharmacies by all Americans.” He also noted that a new CMS study “shows that the savings on generic drugs range from 37 to 65 percent” below average prices. Finally, low-income individuals eligible for the Transitional Assistance Program could “save 39 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,” he stated.
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 greatly increased the number of customer service operators from several hundred to 3,000 as of last week, and we expect to maintain this number of trained representatives to handle the unprecedented number of callers in a timely and effective manner. We have 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.” In order to reach out to the more than 7 million Medicare recipients who also are eligible for the Transitional Assistance Program, Dr. McClellan explained that the CMS is working with the Social Security Administration to send letters to low-income beneficiaries, has set up an “auto-enrollment” program to enroll beneficiaries currently participating in State Pharmacy Assistance Programs, has made $4.6 million available for community-based organizations to help educate and enroll seniors in the program, and has provided additional funding to State Health Insurance Assistance Programs.
During the question and answer session, Sen. Tom Daschle (D-SD) said that a woman in his district was informed that her food stamp benefits would be reduced if she enrolled in the Transitional Assistance Program. Dr. McClellan explained that low-income individuals receiving the additional $600 would not lose their existing federal benefits. He also said that the CMS, state pharmacy and health insurance assistance programs, and community-based organizations would help Medicare beneficiaries to enroll in all eligible federal programs, including the Food Stamp Program and Medicaid.
Robert Hayes of the Medicare Rights Center explained that he is a critic “of a hopelessly complex and wasteful program because all it would take to help everyone at much less cost is for the government to negotiate fair drug prices with the pharmaceutical industry.” Noting that the Transitional Assistance Program would help “some” Medicare beneficiaries afford to buy “some” medications, he said the Medicare Rights Center would work to enroll as many low-income individuals as possible. Referring to the CMS website, Mr. Hayes said that beneficiaries “need to understand the discount card program is most important for low-income people who have the most to gain $600 annually from transitional assistance. But last week’s survey by the Kaiser Family Foundation found that only 15 percent of seniors that’s one in seven with incomes below $20,000 have ever used the Internet.” Mr. Hayes argued that the CMS should require automatic enrollment for anyone who has established eligibility through an existing program, such as the Medicare Savings Programs. “That alone could bring nearly a million very low-income Americans into the discount card program. It is a humanitarian act, and it is a prudent political act. It will do what the Administration repeatedly says it wants to do: help bring affordable prescription drugs now to the neediest men and women with Medicare.”
