Medicare -> What the Medicare Prescription Drug Discount Card Means to You
by: Tony Szczygiel, SUNY at Buffalo School of Law
Updated as of
February 14, 2005
The Medicare drug discount card is only available to persons enrolled in Medicare Pt A and/or B. The card is:
- A voluntary choice, though your options may be limited.
- Temporary (good for 2004 and 2005)
- A way for some Medicare enrollees to save some money on prescription drugs.
$600 credit toward prescription drugs:
Medicare gave “low income” individuals who enrolled with a drug discount card in 2004 a $600 credit for the purchase of prescription drugs. An additional $600 credit was added for 2005. The unused portion of the 2004 credit is available for use in 2005.
For low income beneficiaries enrolling for the first time in 2005, the $600 credit will be reduced by $150 for every calendar quarter starting in April 2005. Therefore, if you apply for a drug discount card in April 2005, your credit will be $450. If you apply in July, the credit is $300.
To qualify for the $600 credit, your 2004 income had to be below $12,569/year ($1,048/month) as a single individual or $16,862 ($1,405/month) as a married individual. You cannot get the credit if you have drug coverage through TRICARE, FEHBP or an employer group health plan.
The Savings:
Medicare enrollees not eligible for the $600 credit may or may not realize savings from the drug discount card. The card sponsors negotiate with drug companies for a discount on the drugs covered by their card. These savings vary between sponsors and among covered drugs.
Drug discount card sponsors may charge an enrollment fee of up to $30/year. The fee is allowed as a way to cover the sponsors’ administrative costs. This should allow sponsors to pass through a substantial share of the rebates, discounts, and other price concessions they negotiate with manufacturers and pharmacies. The enrollment fee cannot be charged to low income individuals.
Many individuals with drug coverage through the VA, EPIC or their private health insurance have better coverage than is being offered through the drug discount card.
The Medicare drug discount card does not replace other drug discount cards currently in use.
One way to figure if you will benefit from a drug discount card is to compare prices among the drug card sponsors for the drugs you take. You can do this on-line at Medicare.gov - PDOAP: Eligbility Questions .
Temporary:
The cards will be good from the first day of the month after you enroll until Dec. 31, 2005. There is no deadline by which you must enroll. Unless the Medicare law changes, the drug cards will expire at the end of next year. Effective January 1, 2006 a new Medicare Part D Prescription Drug benefit will be offered to all Medicare-eligibles and replace the discount card.
Voluntary limited enrollment:
Medicare Managed Care - If you are enrolled in a Medicare managed care plan that offers a Medicare-approved drug discount card to its plan members, you can join only this discount card.
Encompass 65 (Independent Health) sent members a drug discount card at no extra charge. If you are an Encompass 65 member, your only choice is to accept or decline their card.
Blue Cross’ Senior Blue is offering enrollment in Precision Discount, a nationwide drug discount card. Senior Blue members cannot enroll in another drug discount card.
Univera’s Senior Choice (Excellus) is not offering a drug discount card. However, Medicare is treating the Senior Choice drug coverage as the functional equivalent of a drug discount card. Senior Choice members cannot enroll in a drug discount card other than the First Health/EPIC card, see below. Other card sponsors will deny the application from Senior Choice members.
EPIC:
If you are enrolled in EPIC and are entitled to the $600 credit, you will be enrolled in the First Health/EPIC drug card, unless you decline the coverage. This provides you with the benefits of EPIC and the drug discount card.
The First Health/EPIC card provides you with the benefits of EPIC and the drug discount card. The $600 credit applies to 90% or 95% of the prescription drug price, and the EPIC co-payment applies to the remainder. Beneficiaries who have incomes at or below $9,310/year ($776/month) for individuals or $12,490/year ($1,040/month) for couples will pay 5 percent coinsurance. The others eligible for the credit will pay 10 percent coinsurance.
For beneficiaries enrolling for the first time in 2005, the $600 credit will be reduced by $150 for every calendar quarter starting in April 2005. Therefore, if you apply for a drug discount card in April 2005, your credit would be $450. If you applied in July, the credit is $300.
EPIC enrollees not entitled to the $600 credit may enroll with a drug discount card sponsor, but must use either EPIC or the discount card (not both) when purchasing prescription drugs. EPIC will almost always provide greater savings.
For further information, see, http://www.health.state.ny.us/nysdoh/epic/medicare_drug_card.htm
Medicare Managed Care - If you are enrolled in a Medicare managed care plan that offers a Medicare-approved drug discount card to its plan members, you can join only this discount card.
A way for some Medicare enrollees to save some money on prescription drugs:
Medicare enrollees not eligible for the $600 credit may or may not realize any savings from the drug discount card. Drug discount card sponsors may charge an enrollment fee of up to $30/year. The fee is allowed as a way to cover the sponsors’ administrative costs. This allows sponsors to pass through a substantial share of the rebates, discounts, and other price concessions they negotiate with manufacturers and pharmacies. These savings vary between sponsors.
Many individuals with drug coverage through the VA, EPIC or their private health insurance have better coverage than is being offered through the drug discount card.
The Medicare drug discount card does not replace other drug discount cards currently in use.
One way to figure out whether you will benefit from the drug discount card is to compare prices among the drug card sponsors for the drugs you take. You can do this on-line by clicking here.
Medicaid and the drug discount card:
If you are on Medicaid, and have a client share (NAMI), you can get a Medicare drug discount card. The $600 credit counts as incurred medical expenses for your Medicaid spendown.
If you are on Medicaid, and have no client share (NAMI), you cannot get a Medicare drug discount card. (But you do not need it since you have full Medicaid coverage.)
With all cards you may have a limited choice of pharmacies from which to get your prescriptions. Each sponsor has a pharmacy provider directory listing the pharmacies you must use.
Voluntary open enrollment:
Individuals not listed above can choose whether to enroll with a drug discount card. In New York you can choose from 41 drug card sponsors.
Choice of Pharmacy:
With all cards you may have a limited choice of pharmacies from which to get your prescriptions. Each sponsor has a pharmacy provider directory listing the pharmacies you must use.
Changes:
Once you enroll with a sponsor for 2004, you have the option of choosing a different card for 2005. You must make that new choice between November 15 and December 31, 2004. You also get a special election period for changing your drug card in special circumstances, such as if you enter or leave a nursing home, move outside the area served by your current discount drug card, or enroll in or disenroll from a Medicare managed care plan.
Card sponsors can change the drug discounts, and the drugs on which they provide discounts, weekly.
