28 Apr 2004

Officials recommend seniors wait before choosing Medicare drug card.

Medicare officials said Wednesday that they expect continued price
competition as the Medicare drug discount card program gets underway --
and they urged seniors to wait a few days or weeks before choosing a
card to see if prices drop.

Starting today, seniors weighing whether they should sign up for the
Medicare discount card program can make a phone call or check a Web
site to find out how much the cards will cost, including card-to-card
comparisons of prescription drug prices.

Medicare officials say those public comparisons may lead card sponsors
to lower prices on some drugs to attract more customers.

"We may well see some downward changes over the next couple of weeks,"
says Mark McClellan, administrator of the Centers for Medicare &
Medicaid Services.

The Web site and a toll-free telephone assistance center that will
provide the same information are part of an effort by Medicare to help
seniors with what could be a confusing choice: whether to sign up for
the voluntary program in the first place and, if so, which of the 73
discount cards is best.

The Web site is www.medicare.gov and the toll-free number is
800-633-4227 (800-MEDICARE).

Discount cards will be in effect until 2006, when the Medicare
prescription drug benefit begins. The cards are expected to offer
savings of 10% to 20% over their current costs, although actual
discounts could be higher or lower. Some Web sites not affiliated with
the discount card program may also try to beat their prices, without
charging an annual fee.

Medicare members who decide to join the program can choose only one
card, which can carry a maximum annual fee of $30. Sign-ups begin
Monday, and discounts begin June 1.

Card holders may qualify for a $600 subsidy toward the cost of their
drugs if their annual incomes are below $12,123 for individuals or
$16,362 for couples.

The Web site and phone center have information today on 35 cards; the
remainder should provide that information in the coming weeks. The Web
site asks users where they live, the drugs they take and their income.
From that, it shows what cards are available, whether they may qualify
for the subsidy and which generic drugs are available.

Information on each card available in the member's area includes the
card's annual fee, the drugs it covers and the prices it has set for
those drugs.

Drug sponsors will be able to change their prices for drugs --and add
or drop specific drugs -- even after seniors sign up for a card,
something that critics warn could lead to bait-and-switch tactics.
McClellan says his agency will watch for such tactics and could take
action against card sponsors who engage in it.

Tim Trysla, a policy adviser to McClellan, says he expects competition
between card sponsors because they spent millions to win the agency's
endorsement.

"If they want to recoup that investment, they have to keep prices low
and customer service high," he says. "That is why we allow prices to
change, because we think this will create competition."

Drug sponsors are expected to begin heavily advertising the cards,
although McClellan says they are not allowed to use unsolicited
mailings or phone calls. The agency itself is planning an $18 million
television ad campaign about the discount card program.

By Julie Appleby,
USA TODAY

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