Medicare research confirms dramatic savings

July 1, 1993

The Medicare Discount Card program began on June 1, 2004, and it is already providing senior citizens with major savings on their prescription drugs.

The Center for Medicare and Medicaid Services (CMS) has been monitoring the program’s progress for the past three months, as have a number of highly regarded organizations, think tanks and senior advocacy groups. Most of the studies are coming to the same conclusion: the Medicare discount card is providing the savings it promised to America’s senior citizens.

The cost of the Medicare discount card is no more than $30 annually, and according to CMS, most seniors will recoup those costs in about two months. Qualifying low-income Medicare recipients will receive an additional $600 annual cash subsidy that is added to the value of their Medicare discount card.

Across the board, drugs are cheaper under the discount card program, whether drugs are purchased at retail pharmacies, purchased through mail-order, or purchased online.

Seniors on Medicare can save even more money if they use generic pharmaceuticals instead of brand-name drugs. But not all brand-name drugs have a generic counterpart. According to CMS, only 55 percent of the 209 drug classifications that are covered by the Medicare Discount Card program have a generic version.

A study published recently by the American Enterprise Institute (AEI) in June 2004, found that the savings for a low-income senior (with the $600 subsidy) may be between 58-72 percent when purchasing generic drugs by mail. The same person could save between 50-78 percent by buying generic prescription drugs at retail pharmacies with their Medicare discount card.

Brand-name prescription drugs may cost more than generics, but their savings are still impressive for all incomes, regardless of the subsidy. But most brand-name drug manufacturers already build in a subsidy for low income seniors. As a result, according to the AEI study, a low income Medicare recipient may qualify for both the Medicare discount card subsidy of $600 and the manufacturers’ subsidy for low income and end up saving 53-69 percent on retail brand-name drugs, and 60-74 percent by mail.

But Medicare discount card savings should attract Medicare recipients at all income levels. Upper-income seniors will save 8-23 percent on retail or mail-order brand-name drugs; for generics, 6-23 percent purchased at retail or mail order. Pretty impressive numbers no matter what your income.

If you are a Medicare recipient and have not signed up for a Medicare discount card, call 1-800-Medicare. They have 3,000 operators standing by to offer you personalized service.. All they need to know is your ZIP code and a list of your prescription drugs. To qualify for the $600 subsidy, you will need to provide financial information to the Medicare confidential operator.

If you are a computer-savvy senior, go to www.Medicare.gov to find your savings and in many cases, even register for your card online. If you are not a senior citizen but have friends and relatives that are, offer to assist them in the Medicare Discount Card program enrolling process. It would be a kind gesture on your part, and big savings for them.

Jack Strayer works for the National Center for Policy Analysis.

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