Friday, May 14, 2004

73 Card Monte

As the White House recently unveiled one of the crown jewels of the new Medicare prescription drug benefit law, the vaunted discount drug cards, the vast majority of seniors remain either mystified by the magnitude of choices of cards and benefits or unimpressed with the discounts afforded, or both.

Part of the problem is that there are 73 competing cards. Each card offers a different package of discounts for a different set of medications. Senior's that take more than one prescription drug must try to figure out which plan offers the best combined savings for all of their prescription drug needs, since no two cards are the same in terms of benefits and coverage. For example, one card may offer savings for Lipitor and Ambien but not Vioxx and Fosamax, while another might offer savings on Vioxx and Lipitor but not Fosamax and Ambien, and so on. Considering that most seniors take a multitude of different prescription drugs, this system is complex, confusing and in most cases ineffective.

Adding to the confusion is the fact that the entities that offer the discount cards can change the benefits offered at any time, while seniors are required to make a one-year commitment to the cards that cost up to $30 each. So even if a senior is successful in weeding through the 70+ cards to find the one that presents the best package of savings for his or her particular needs, the card company can change the discounts, or eliminate them completely. Not exactly a good deal.

Furthermore, it is not clear if these "discount" cards represent any real savings anyway, as many senior's have claimed. Apparently, many of the "discounts" do not equal the savings that seniors can find from Canadian pharmacies, from existing state or union plans and from low-cost outlets in the United States. A study by the Committee on Government Reform in the U.S. House of Representatives, completed this April, came to the following conclusion:


This analysis compares discounted prices and prices currently available to Medicare beneficiaries with the prices that will be available with the new Medicare discount drug cards. It finds that the prices with the cards are far higher than discounted prices, such as those available in Canada or via the Federal Supply Schedule. And it finds that Medicare beneficiaries already have access to the same prices offered by the discount drug cards, through outlets such as and Thus, the new Medicare discount drug cards appear to offer few advantages."

The full report can be found here.

So if the Medicare discount drug cards do not offer substantial savings for seniors, and they remain subject to the whim of the entities offering the cards, what is the purpose of issuing them? David Sirota does a good job of detailing the influence that pharmaceutical companies and other health profession industries had on the crafting of the underlying legislation, and how these cards represent a windfall for these industries while the actual savings for seniors were diluted to the point of non-existence. His piece can be found here.

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