Easy does it on picking drug card, say officials

A bewildering array of Medicare drug discount plans rolls out Monday. The advice: Be patient.

WASHINGTON - Dozens of companies will start taking applications for Medicare's new drug discount cards on Monday, but federal officials are urging seniors to wait a few weeks and compare prices before they sign up.

Officials from the Department of Health and Human Services said prices could drop because new companies will join the program and others will cut prices to stay competitive.

"We don't want individuals to rush right in and sign up," said Tommy Thompson, the secretary of HHS. "What we're trying to do in the first week in May is to really educate seniors about the card and all of the ramifications."

The cards take effect June 1. Seniors can sign up any time.

The discount cards are part of an interim program to reduce drug prices until Medicare launches its sweeping new drug coverage in January 2006.

The card program seems relatively simple: Seniors can choose the one that offers the lowest prices. But many seniors could have difficulty sorting through the complicated options.

"People are likely to be pretty much overwhelmed by the choices and the complexity," said Gail Shearer, senior health policy analyst with Consumers Union.

To cut through the confusion, Medicare's Web site (www.Medicare.gov) leads a senior through the process of comparing prices for specific drugs under all available discount plans in their community.

The same information is available by calling 1-800-MEDICARE (toll free 1-800-633-4227). Once callers provide their ZIP codes and the drugs they take, Medicare will mail them a customized list of card options.

Companies can charge seniors up to $30 to enroll in their discount plans, but some are charging less or even offering the cards for free. The cards vary widely in which drugs they cover and the amount of the discount, so officials say seniors should shop for the card that offers the best deals on the medicines they take at the pharmacies in their neighborhood.

While there's already debate over how much middle-class seniors will save with the discount cards, there's a substantial bonus for low-income seniors.

Singles earning no more than $12,569 and married couples earning no more than $16,862 are eligible for a $600 credit on their purchases this year and an additional $600 next year. Also, they do not have to pay the enrollment fee for a card. Medicare officials say several major pharmaceutical companies also have agreed to provide drugs free of charge, or for a minimal dispensing fee, to low-income seniors once the $600 allowance has been exhausted.

The program was changing so rapidly last week that Medicare officials were having difficulty keeping track of how many cards had been approved. There will be at least 40 national cards and 33 others that cover only certain states.

Medicare released the first batch of prices on Thursday, revealing relatively modest discounts on most drugs. The prices vary widely depending on the drug and the competitiveness of the local market.

So far, though, pricing remains capricious and deals are hard to discern. For example, compare the price of the popular cholesterol-lowering drug Lipitor (10 mg, 90 pills) from a variety of sources.

While the lowest-priced Medicare card sponsor is charging $197.20 for downtown St. Petersburg residents, two Internet pharmacies - one U.S. and the other Canadian - offer lower prices without requiring the discount card. Medicare officials say such comparisons are unfair because most people get their drugs through retail pharmacies, not via the Web.

Medicare officials say prices may go down over the coming weeks as card sponsors jockey to become more competitive.

"I think we're going to have a real way of lowering prices," said Thompson.

Further complicating matters, sponsors of several of the drug discount cards complained that the initial prices cited for their offerings on the Medicare Web site were 10 to 15 percent too high.

There's one other flaw in the government's plea for consumers to start comparison shopping: There's no guarantee that drug prices will stay the same once the discount program starts. Medicare allows the companies to raise prices of drugs as the wholesale cost changes.

Shearer from Consumers Union said she is concerned that seniors may commit to a plan because they see low initial prices only to be stuck with higher prices.

"I can't think of any other products like this - you make a decision, but the rug can be pulled out from underneath you," she said.

Dr. Mark McClellan, administrator of the federal Centers for Medicare and Medicaid Services, said companies can raise their prices only if their costs go up.

"We are going to be watching for bait-and-switch behavior," tracking prices every week, he said.

If Medicare officials discover companies drastically raising prices without reason, he said, "we can kick them out of the program."

When Congress was debating the drug card program, supporters said consumers would benefit from the robust competition of many providers. That may ultimately occur, but in the meantime, seniors have to wade through a lot of choices.

On Monday, companies will begin accepting applications for Medicare's new drug discount program. The discount cards, which take effect on June 1, are intended to reduce the cost of prescription drugs until Medicare launches a more comprehensive program in January 2006.

Seniors will have lots of choices. There will be at least 40 national cards and 33 others that are accepted in individual states. Officials say it's important to shop for the best card based on the drugs you need, the amount of the discount and your location.

Shop now, but don't submit your application for a few weeks. Medicare officials suggest seniors begin comparing plans this week but wait until late May to sign up because more companies are being approved and all the companies might reduce their prices to better compete.

More information can be found on the Web at www.medicare.gov or by calling 1-800-MEDICARE 1-800-633-4227. Florida residents may also call the Elder Helpline at 1-800-963-5337.

Seniors are eligible for the program if they have Medicare Part A or B and do not receive outpatient prescription drug coverage through Medicaid. Seniors can only get one Medicare-approved discount card at a time and can't change cards until next year, so choose carefully.

If your Medicare ManagedCare Plan offers its own card, you must use it. If the plan does not offer a card, you are free to choose from the others.

Medicare allows the companies to charge up to $30 per year for a card, but there is no additional fee or monthly charge after that. Although some companies are charging the full $30, others are charging less and some are offering the cards for free.

In addition to the discounts from the cards, low-income seniors will be eligible for a credit of up to $600 each year to help pay for prescriptions. To qualify, your annual income in 2004 must be no more than $12,569 for singles or $16,862 for a married couple. Seniors are NOT eligible for the $600 credit if they already have outpatient prescription drug coverage from Medicaid, an employer group health plan, some Medicare Managed Care plans, TRICARE for Life (military health insurance) or FEHBP (health insurance for federal employees/retirees).

Medicare has alerted seniors to watch out for imitators offering discount cards that are not part of the government program. Any card that is part of the program will have an oval logo that says "MEDICARE APPROVED."

Approved card providers will not be requesting seniors to provide banking information or Social Security and credit card numbers over the phone. Seniors should report any such fraudulent requests to the Florida Attorney General's hotline at 1-866-966-7226.

When choosing your card, it might be tempting to simply pick the one with the lowest prices. But Medicare officials and seniors groups say you should consider all aspects:

COVERAGE: Whether the card offers discounts on the drugs you take.

PHARMACIES: Whether the card's network has stores near your home

PRICE: The amount of discount on the drugs you take and the enrollment cost for the cards.

STATE: If you have homes in more than one state, you'll want a card with national coverage.

Call Medicare's toll-free phone number, 1-800-633-4227. It is an automated system that recognizes voice commands. Answer the questions and you'll be transferred to an adviser. The adviser will ask for your zip code, a list of the drugs you take and whether you have a particular pharmacy or a discount card you would prefer. You may want to list your prescriptions and your current costs in the worksheet we've provided above.

Medicare will then mail you a booklet with a customized list of cards that best meet your needs. The booklet will also contain an application that you can use once you choose a card.

Seniors who have difficulty on the telephone can ask a friend or relative for help, either on the phone or using the Medicare Web site. Additional help is available by calling Florida's Elder Hotline at 1-800-963-5337 and asking for assistance from a SHINE volunteer. These specially trained workers will help seniors understand their options. Though SHINE volunteers will do most of their counseling by phone, seniors may be able to speak to them in person at SHINE sites or, in some cases, through home visits.

The government says the program should offer savings of 17 percent on brand-name drugs and 30 percent on generics, but you may save more if you buy your drugs from Canada, over the Internet or from a mail-order pharmacy. That's why it is important to compare all your options.

The discount cards are optional and some seniors may decide it is not worthwhile to enroll because their health insurance offers better drug coverage or they find better prices elsewhere.

On the Web

www.medicare.gov

Medicare - 1-800-633-4227Florida Elder Helpline - 1-800-963-5337

You do not have to submit an application right away. Medicare officials suggest seniors begin comparing plans this week but wait until late May to sign up in case companies begin to drop prices.

1. List each of your prescriptions and how much you pay for each of them.

2. Call 1-800-633-4227 or go to the medicare.gov Web site to learn which discount cards are available and get information about whether they cover your drugs. If you call the hotline, give them your zip code and list of prescriptions and customized information will be mailed to you.

3. Use the information that is mailed to you or the online information to compare each discount card based on what is important to you.

Which card covers most of my prescriptions?

Which card gives me the best overall savings?

Which company allows me to use the pharmacy I want?

4. After choosing the card that is best for you, call the company offering this card and request an enrollment form or use the enrollment form sent to you by Medicare.

5. This fall, review your discount card choices to see if you want to make a change. You can apply for a different card starting Nov. 15 and the new card would take effect in 2005.

- Compiled by Times staff writers Bill Adair, Kris Hundley and Ron Brackett

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