The new Medicare drug discount cards were activated June 1, and seniors are starting to find out for themselves whether the cards will provide real savings on their medicines. Two new studies show the savings can be substantial.

Nonetheless, critics have been discouraging seniors from signing up for the cards. At a recent forum for Medicare beneficiaries in Washington, D.C., House minority leader Nancy Pelosi said that the discount card program “sounds like a good deal, but it isn’t.”

But the head of the nation?s largest affiliation of organizations representing aging Americans disagrees. ?What is crystal clear amid all the rhetoric is that low-income Medicare beneficiaries should absolutely apply for a new Medicare-approved discount card,? according to James Firman, president and CEO of the National Council on Aging.

Millions of seniors are deciding to check for themselves, visiting the Medicare website or calling the Medicare hotline. When they do, they are walked through a series of questions, including what drugs they are taking and their income levels, to find out just what their savings could be.

Many are pleasantly surprised. Two new studies show that low-income seniors could save 70% or even 93% off the cost of their medicines if they sign up for one of the new cards and take full advantage of the benefits available to them.

For starters, seniors can enroll in any of several dozen private prescription drug discount card plans approved by Medicare that will provide savings of 20% on brand name drugs and up to 60% on generics.

But most seniors could get similar deals by shopping around, especially on discount websites like Drugstore.com or Costco.

But prices are only part of the story: Seniors with annual incomes of less than $12,569 or $16,862 for a couple also can get $600 this year and next in government money to help pay for their medicines. Any money that?s not spent this year rolls over to the next.

In addition, the pharmaceutical companies are combining their private patient assistance programs with the cards to supercharge the benefit for low- and even moderate-income seniors. The Medicare drug cards will make it easier for seniors to participate in these programs. The programs offer a month?s supply of drugs for $12, $15, or even less for qualifying seniors.

Joseph R. Antos of the American Enterprise Institute and I analyzed the prices that several low-income seniors with chronic conditions would pay if they bought their drugs through the new card plan. We compared this with prices they would pay with the existing AARP retail card or through several mail-order websites.

Then we factored in the savings from the drug companies? patient assistance programs and the $600 cash subsidy, which is available only to those who join a Medicare drug plan.

The bottom line on our study: Low-income seniors won’t be able to beat the new program. The drug discounts coupled with public and private sector subsidies produce overall savings of 30 to 70%.

A new study by the agency that runs Medicare found that the savings could be even higher. The Centers for Medicare and Medicaid Services says if a low-income senior were to sign up for the temporary drug discount card program, she could save 93% off her drug bill by shopping wisely and using generics whenever possible.

The two studies indicate that political leaders, like Mrs. Pelosi, are doing seniors a disservice by discouraging them from enrolling in the new Medicare drug discount card program.

?I am concerned about a political environment that confuses and misleads Medicare beneficiaries and that in the end causes more harm than good,? Senator Charles Grassley, R-IO, said in a recent floor speech. ?They deserve better than that.?

Seniors can visit www.medicare.com now or call 1-800-Medicare to find out if they are eligible for the subsidies and to learn which drug discount card gives them the best deal. There has been much criticism of the complexity of the program, with too many drug card choices. But the website and Medicare operators help people winnow down the choices to those that provide the best deal and the greatest convenience.

The temporary discount card program ends after next year when the full Medicare drug benefit is slated to begin. But in the meantime, it sets down a good marker for future reforms. Congress has, for once, actually put Medicare abreast of the times with this small program that engages private sector competition and offers targeted subsidies to seniors who need help the most.

********************

Grace-Marie Turner is president of the Galen Institute, a not-for-profit research organization that focuses on health reform. She can be reached at P.O. Box 19080, Alexandria, VA 22320 or at galen@galen.org

The new Medicare drug discount cards were activated June 1, and seniors are starting to find out for themselves whether the cards will provide real savings on their medicines. Two new studies show the savings can be substantial.

Nonetheless, critics have been discouraging seniors from signing up for the cards. At a recent forum for Medicare beneficiaries in Washington, D.C., House minority leader Nancy Pelosi said that the discount card program “sounds like a good deal, but it isn’t.”

But the head of the nation?s largest affiliation of organizations representing aging Americans disagrees. ?What is crystal clear amid all the rhetoric is that low-income Medicare beneficiaries should absolutely apply for a new Medicare-approved discount card,? according to James Firman, president and CEO of the National Council on Aging.

Millions of seniors are deciding to check for themselves, visiting the Medicare website or calling the Medicare hotline. When they do, they are walked through a series of questions, including what drugs they are taking and their income levels, to find out just what their savings could be.

Many are pleasantly surprised. Two new studies show that low-income seniors could save 70% or even 93% off the cost of their medicines if they sign up for one of the new cards and take full advantage of the benefits available to them.

For starters, seniors can enroll in any of several dozen private prescription drug discount card plans approved by Medicare that will provide savings of 20% on brand name drugs and up to 60% on generics.

But most seniors could get similar deals by shopping around, especially on discount websites like Drugstore.com or Costco.

But prices are only part of the story: Seniors with annual incomes of less than $12,569 or $16,862 for a couple also can get $600 this year and next in government money to help pay for their medicines. Any money that?s not spent this year rolls over to the next.

In addition, the pharmaceutical companies are combining their private patient assistance programs with the cards to supercharge the benefit for low- and even moderate-income seniors. The Medicare drug cards will make it easier for seniors to participate in these programs. The programs offer a month?s supply of drugs for $12, $15, or even less for qualifying seniors.

Joseph R. Antos of the American Enterprise Institute and I analyzed the prices that several low-income seniors with chronic conditions would pay if they bought their drugs through the new card plan. We compared this with prices they would pay with the existing AARP retail card or through several mail-order websites.

Then we factored in the savings from the drug companies? patient assistance programs and the $600 cash subsidy, which is available only to those who join a Medicare drug plan.

The bottom line on our study: Low-income seniors won’t be able to beat the new program. The drug discounts coupled with public and private sector subsidies produce overall savings of 30 to 70%.

A new study by the agency that runs Medicare found that the savings could be even higher. The Centers for Medicare and Medicaid Services says if a low-income senior were to sign up for the temporary drug discount card program, she could save 93% off her drug bill by shopping wisely and using generics whenever possible.

The two studies indicate that political leaders, like Mrs. Pelosi, are doing seniors a disservice by discouraging them from enrolling in the new Medicare drug discount card program.

?I am concerned about a political environment that confuses and misleads Medicare beneficiaries and that in the end causes more harm than good,? Senator Charles Grassley, R-IO, said in a recent floor speech. ?They deserve better than that.?

Seniors can visit www.medicare.com now or call 1-800-Medicare to find out if they are eligible for the subsidies and to learn which drug discount card gives them the best deal. There has been much criticism of the complexity of the program, with too many drug card choices. But the website and Medicare operators help people winnow down the choices to those that provide the best deal and the greatest convenience.

The temporary discount card program ends after next year when the full Medicare drug benefit is slated to begin. But in the meantime, it sets down a good marker for future reforms. Congress has, for once, actually put Medicare abreast of the times with this small program that engages private sector competition and offers targeted subsidies to seniors who need help the most.

********************

Grace-Marie Turner is president of the Galen Institute, a not-for-profit research organization that focuses on health reform. She can be reached at P.O. Box 19080, Alexandria, VA 22320 or at galen@galen.org