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Senate Special Committee on Aging
Testimony Indicates Medicare Drug Discount Plan On
Schedule
March 10, 2004 - At a hearing yesterday the U.S.
Senate Special Committee on Aging held about the soon-to-be issued
Medicare discount drug cards, titled, "The
New Medicare Drug Discount Card: An Advance Prognosis,”
Chairman Larry Craig said he is pleased that the program is getting a
positive response from a variety of companies.
“The Centers for Medicare and Medicaid Services has already received
more than twice the number of card sponsor applications than they
originally anticipated – over 100 applications in all. Many who were
originally critical of the Medicare drug discount effort are now saying
they will be full participants in the program. That’s the good news and
it’s just phenomenal,” Craig said.
“This whole effort to help America’s seniors wouldn’t have happened
without the leadership of President Bush. But much needs to be done to
educate the public, and Medicare officials have a lot of work ahead of
them to make sure this program runs as Congress intends. Undoubtedly
some attempts at fraud will be made and federal officials, including my
Aging Committee staff, will have to be vigilant,” Craig said.
Starting this May, seniors who want the drug discounts and who qualify,
will sign up to receive drug discount cards from private companies,
which will be endorsed by Medicare. In June, the companies involved in
the program will mail the Medicare-approved cards to the seniors who
have signed up.
Medicare officials estimate the program will save seniors now without
coverage an estimated 10 to 15 percent on their total drug spending,
with discounts of up to 25 percent or more on individual prescriptions.
Seniors who have no drug coverage and whose incomes are below $12,100 a
year for an individual or $16,300 per couple, will receive an additional
$600 in immediate assistance from the federal government to help them
buy the discounted prescriptions.
“The $600 will be added to the card this year and will operate like a
debit card from a bank. That will truly help seniors who need help the
most purchase the medications they need,” Craig said. Another $600
will be added to the cards for low-income seniors in 2005.
Acting Medicare Administrator Dennis Smith told Craig’s committee that
Medicare will provide reliable, easy-to-compare information that will
show beneficiaries what programs are in their area, and allow senior
citizens to choose the discount card program that best meets their
needs. (Read Smith's testimony - click
here)
“While not a drug benefit, the voluntary drug card program is an
important first step in providing Medicare beneficiaries with the tools
they need to better afford the cost of prescription drugs,” Smith
said.
The Acting Medicare official said that card sponsors may be Pharmacy
Benefit Managers (PBMs), wholesalers, retail pharmacies, insurers,
Medicare Advantage plans, or any other non-governmental legal entity
that meets the requirements. “States may choose to pay the enrollment
fees for beneficiaries not eligible for the $600 credit and coinsurance
for low-income who are eligible,” Smith said. “To ensure that
beneficiaries have convenient access to their neighborhood pharmacies,
card sponsors will not be permitted to limit their services to
mail-order programs.”
The prescription drug discount cards will be effective until the full
Medicare prescription drug benefit goes into effect starting in January
of 2006.
Jim Firman, President and CEO of the National Council on the Aging (NCOA),
testified that the savings to low-income seniors now without drug
coverage may be even greater than Congress anticipated. Firman used
the example of an 82-year-old senior from Idaho who has an annual income
of $10,000 and assets worth $20,000. Using additional “wrap around”
assistance that will be made available by the drug companies, his
organization estimates that senior could save over $5,000 alone during
2004 and 2005.
“Enactment of the new Medicare law is the single-most important
opportunity to help low-income Medicare beneficiaries to have emerged in
the past 35 years,” Firman said. But as good as the program is, he
said his organization is concerned that many older Americans are unaware
of the new benefit and do not understand how it will work. His
organization will be working with AARP and others in the newly formed
Access to Benefits Coalition (ABC) to help seniors understand the new
discount drug cards.
Forest Hunter, who runs Pfizer Inc.’s “Share Card” for low-income
seniors, testified that his company and many other prescription drug
makers will participate in the federal effort to help America’s elderly.
“For more than 30 years, Pfizer has been reaching out to people in
need. Every day, we donate well more than $1 million in medicines
through our U.S. outreach programs – in fact, in 2003 we donated $500
million in medicines, helping more than 1.2 million patients,”
Hunter said. “Because of Pfizer’s commitment, we are actively working
with other companies to create a cooperative program which brings
together leading healthcare organizations to offer America’s 40 million
Medicare beneficiaries immediate assistance in getting needed medicines
through the Interim Medicare-Approved Drug Discount program.”
Sen. Craig said that he encourages seniors with questions about the new
drug benefit to call Medicare’s toll free number – 1-800-MEDICARE
(1-800-633-4227).
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