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New law broadens Medicare benefits

The law extends prescription drug savings once enjoyed only by those on Medicaid.


© St. Petersburg Times, published July 1, 2000

While Republicans and Democrats in Washington wrangle over a prescription drug benefit for seniors, Florida makes its first foray into the marketplace today.

Under a law passed by this year's Legislature, most pharmacies now must offer reduced prices to anyone with a Medicare card.

At stores that already discount their drugs deeply, these new prices may have little effect. At stores with traditionally higher prices, consumers might save as much as $25 on a single prescription.

"It can be all over the block. It just depends on the pharmacy and the drug," said Jerry Wells, the state's pharmacy director.

On average, he said, the reduced prices should save Medicare beneficiaries about 10 percent.

The new drug benefit is one of more than 100 new laws that go into effect today. The others include a law letting adult motorcyclists ride without helmets, another meant to make schools safer from violence and another aimed at giving abandoned babies a chance at survival.

As for the drug law, it uses the clout of the state's Medicaid program to assist everyone on Medicare.

When it started in 1965, Medicare was geared to hospital care and doctor bills. It didn't cover the drugs that are now so vital in fighting chronic illness. Most Medicare beneficiaries enjoy some drug coverage through retirement plans, private insurance or Medicare HMOs. But roughly one-third have no coverage. It's a prime reason why people over 65 spend one-fifth of their income on health care.

Medicaid, a government insurance program that covers about 1.5-million poor Floridians, does provide drug coverage. It provides a huge income stream to pharmacies. As of today, any pharmacy that wants a slice of this Medicaid business must offer a discount to Florida's 2.8-million Medicare clients as well.

The discount can be calculated by taking 91 percent of the average wholesale price and then adding $4.50. This applies to all prescription drugs, but not over-the-counter drugs.

California started a similar program in January, with an average savings of 10 percent, said Carlo Michelotti, of the California Pharmacy Association.

"Some community pharmacies were already offering senior discounts that people didn't know about," said Michelotti. "A pharmacist might think, "I know Mr. Jones. He's been coming here 20 years. I know he's on a tight income. I'll give him a break.' These people were sorely disappointed that they won't be getting an additional discount."

In a statement, Eckerd Corp. said it customarily prices drugs lower than required by the new law. Walgreens Co. said most of its pharmacies operate on a 2 percent to 3 per cent profit margin.

"This is an unfunded government benefit that is being built on the backs of private industry," a Walgreens statement said. "Everyone acknowledges that some seniors need help paying for prescription drugs, but we feel the answer lies with a federal program, rather than an individual state program."

Indian Rocks Beach resident Stephen Small chuckled when he read about the law earlier this year. Average discount prices estimated by the state were still significantly higher than prices Small found by searching the Internet.

Small has bought his gout medicine at "" ever since he discovered the company would deliver a 90-day supply to his door for $11.50, almost half the going retail price.

"On half the deals the government gives us," Small said, "we can still do better ourselves."

(A related program, which will help poor Floridians buy prescription drugs, goes into effect Jan. 1.) Besides the drug law, starting today, adult motorcyclists have a bit more freedom.

The new law allows bikers 21 and older to ride without helmets as long as they have $10,000 in medical insurance. Bikers currently are not required to have medical insurance, but they are required to wear helmets. Florida joins roughly 30 other states that have similar measures.

Also today, parents of newborns intent on abandoning them can do so at a hospital or fire station -- no questions asked -- giving the child a chance.

"If one infant can be saved from the Dumpster then it's well worth it," said Paul Flounlacker, an attorney for the state Department of Children and Families.

Another health care law is designed to ease patients' concerns about their HMOs. That law specifies that only doctors can make decisions on whether a health maintenance organization will cover a particular service.

Information from the Associated Press was used in this report.

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