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The Medicare Drug Discount Card: A public-private partnership July 28, 2004 Grace-Marie Turner Galen Institute 2 Benefits of the Medicare drug card Immediate drug discounts for all Medicare beneficiaries Generous assistance for lower-income seniors Private competition and negotiated pricing introduced into Medicare 3 Three levels of assistance 1. Discounts on prescription drugs 2. $600 subsidies this year and next for low-income seniors 3. Easier access to pharmaceutical company assistance programs 4 Prescription drug discount cards Cards were activated June 1, but no penalties for delayed enrollment Cards available to all Medicare beneficiaries, except those on Medicaid Seniors can enroll in the card plan of their choice, but only one card at a time 5 Discount cards… About 34 national cards, 6 with zero enrollment fees ($30 is maximum) Plans must provide at least one drug in each of 209 therapeutic categories Studies show savings estimates range from 11% to 95% 6 Transitional Cash Assistance Special help for low income seniors: Subsidies of $600 a year this year and next on the discount card Available to seniors <135% of poverty ($12,569 indiv. / $16,862 couple) Small co-payments; free enrollment Any balance left in December rolls over to 2005. 7 Private drug assistance plans Many companies will boost value of the drug discount card… Pfizer: $15 for a month’s supply Lilly: $12 for a month’s supply Merck: $0 after $600 is spent GSK and Together Rx offer discounts up to 40% and free drugs for low income 8 Coordination with State programs Medicare beneficiaries can join the discount card program and still participate in any State Pharmaceutical Assistance Program States are educating seniors about discount cards and $600 subsidy States can pay co-payments for lowincome beneficiaries and enrollment fees for higher-income beneficiaries 9 Studies show huge savings 1. 2. 3. Medicare approved drug discount cards Transitional low-income assistance Drug company assistance programs Studies show the three components supercharge the temporary drug benefit. Antos, AEI study is the best. Others… 10 Center for Medicare and Medicaid Services 85% savings off retail prices with drug discounts, $600 transitional assistance, and drug company wrap-around programs. 11 The Lewin Group Drug price discounts and $600 subsidy equal savings of 29% to 92% for low-income seniors. 12 Business Roundtable Seniors will receive $24.1 billion in new drug benefits between 2004 and 2006. Savings shown on state by state and district by district basis. E.g.: Virginia. $131.7 million in savings this year and next. 13 Answering the critics All drugs may not be covered Sponsors may drop the drug seniors need most Plans can change prices weekly Rising drug prices will erode savings 14 New incentives Seniors will have a choice of private plans, with incentives to shop wisely Competition will force companies to treat beneficiaries fairly Information available at: 1-800-Medicare or www.medicare.gov 15 Political battles will continue Key parts of the new Medicare law can lead to transformative changes But cost pressures will continue to drive political demands for changes One recommendation: Allow the funded drug card program to continue as a option in 2006 with more generous funding and private catastrophic coverage. 16 Making consumers the winners 17 18