Christopher B. Clark, CEBS
Palmer & Cay
The expansion of Medicare to add insurance coverage for prescription drugs, Medicare Part D, does not begin until 2006. Between June 2004 and the Part D effective date, Medicare beneficiaries may choose to enroll in a prescription drug discount program. The discounts cards are issued through private vendors, will cost no more then $30 per year, and are projected to save enrollees 15% - 25% of overall prescription drug costs.
The discount cards are available through private vendors. There are many card sponsors, including retail pharmacy chains, pharmacy benefit managers (PBMs), drug manufacturers, and retiree advocacy groups. The best value for a individual retiree will depend on his geographic location and what drug he takes. The Medicare website, www.medicare.gov, offers a questionnaire that can help guide the retiree to the best discount card for his circumstances. Retirees may also get similar help by calling 1-800-Medicare.
Most retirees without drug coverage will enjoy some level of savings by using a discount card. Retirees with health insurance that includes drug coverage will generally not get any additional benefit from the discount cards. The savings available through the discount cards can vary widely based on the card sponsor, the drugs being purchased, the retail pharmacy utilized, and if a mail order option is offered. Most pricing is similar to, but slightly higher than, what many self-funded employers get through PBMs.
Medicare beneficiaries with limited incomes can get $600 in direct financial assistance in both 2004 and 2005. These low-income seniors may also qualify for additional discounts on many brand drugs. The Medicare website and toll-free phone number provide assistance in determining eligibility for these additional benefits.
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