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Medicare�s Interim Benefit: The Drug Discount Card

excerpt from: ELDER LAW FAX -- February 23, 2004
A free weekly newsletter by Tim Takacs, Certified Elder Law Attorney

The Medicare-Approved Drug Discount Card, created by the Medicare Prescription Drug, Improvement and Modernization Act signed into law last December, will be available in June 2004. The U. S. Centers for Medicare & Medicaid Services (CMS) will contract with private companies to offer the new cards.

This is an interim benefit that is being offered until the Medicare prescription benefit starts in 2006. The cards could save beneficiaries between 10 to 25 percent at the pharmacy cost on prescription drugs.

Here�s a summary of what Medicare beneficiaries and their health care providers need to know about the cards, from CignaMedicare:

Enrollment:

• Voluntary enrollment begins in May 2004
• Card is effective beginning June 1, 2004 and ending December 31, 2005
• Annual enrollment fee of up to $30; waived if income is below 135% of  the Federal Poverty Level (FPL)
• Beneficiaries with Medicare Part A or B are eligible unless enrolled in Medicaid or covered through a Medicaid 1115 state waiver
• Choice of at least two Medicare-approved card programs per state, but only one program at a time
• Change enrollment, if desired, between November 14 and December 31, 2004
• Special election period if change in residence or Medicare Advantage plan
• Discounts on prescriptions only at participating pharmacies.
• Drug cards approved by CMS will carry a Medicare-approved seal on the card authenticating that it is a �Medicare-approved� card program.

Special $600 Credit for Low-Income Beneficiaries:

• $600 credit in 2004 and 2005 for incomes below 135% FPL (For 2003--$12,123 or less if single, or $16,362 or less if married.)
• Persons with drug coverage through Medicaid, TRICARE for Life, or an employer group health plan cannot qualify for the credit
• The $600 credit will flow through the card; 2004 balance carried over to 2005
• 5% coinsurance for individuals with incomes below 100% FPL
• 10% coinsurance for individuals with incomes below 135% FPL
• No asset test for the discount drug card or for the $600 credit

Drug Card Plan:

• Drug card discounts required to be available to all enrollees; can be limited to a formulary
• Formulary must include one discounted drug in each of 209 classes commonly used by elderly
• Must provide convenient access to pharmacies; cannot require mail-order only
• May offer discounts on over-the-counter drugs (OTC); $600 credit cannot be used to purchase OTC
• Required to offer price comparisons on a Web site and a grievance policy

More On the Drug Card Coming Soon�:

CMS is currently conducting outreach to providers and beneficiaries about this interim benefit. CMS is also warning the public about scams. No Medicare drug discount cards are currently available.

Beneficiaries can get information about the drug card by calling 1-800-MEDICARE, or by visiting http://www.medicare.gov/MedicareReform.

Full Drug Benefit to Take Effect January 2006

When the newly enacted prescription drug benefit goes into effect in January 2006, it will give coverage to the nearly 10 million estimated Medicare beneficiaries who are currently without any drug coverage. In addition, low income beneficiaries can choose to receive significant assistance through substantial subsidies to pay their drug costs�on
top of what all seniors will receive.

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