Discount Drug Cards - Is It Enough?

President Bush this week unveiled his plan for Medicare reform including a plan for discounts for prescription drugs. The cost of prescription drugs has long been the driving force behind rapidly rising healthcare costs over the last few years. Seniors who are the largest consumers of prescription drugs have also been the group that has been hit the hardest by rising drug costs. Traditional Medicare as it exists today does not cover most prescription outpatient medications (exceptions to this include a very small number of medications that are inhaled or infused through IV injections). Many Medicare HMO's provided some type of prescription drug coverage that provided many seniors with coverage for drugs up to a specific dollar amount. Unfortunately many healthcare companies have withdrawn from markets or have reduced the benefits they provide due to stagnate reimbursement rates from the Healthcare Finance Administration. Without coverage for prescription drugs many seniors have to make some difficult choices; pay for expensive drugs or pay for groceries.

Coverage for Medicare prescription drugs was hotly debated during the 2000 Presidential election with both the Democratic and Republican candidates pushing their own versions of plans to provide drug price relief for cash strapped seniors. While many seniors feared that the debates were mere rhetoric with no substance, seven months into this new administration a plan has been unveiled. Is it the final version of Medicare reform? According to the President no. He states that his plan for discount cards for prescriptions is a temporary measure to provide immediate relief in the face of rising drug costs. His plan is sure to be hotly debated in Congress with the final version being anyone's guess.

The portion of the President's statement that has received the most notice is his plan for provision of a discount drug card for all Medicare beneficiaries that would cost approximately $25.00 per year. The cards would provide a discount of 10% on prescription medications at participating pharmacies. Medicare does not underwrite these discount cards, they would be provided by the private sector. President Bush stated, "It's a plan similar to the plan that brings discounts to many Americans who have private insurance. And the leaders of the companies that have been so successful in providing drug discounts in private plans are here with us today, and will brief the press on the savings about our strategy. "

Additionally the President announced plans for more choice in coverage for Medicare and out of pocket cost caps for all Medicare recipients. Seniors under the President's plan would be able to choose to continue with traditional Medicare coverage or from a health plan provided by the private sector. Additionally out of pocket costs for Medicare would be capped at a specific dollar amount. That amount was not specified but would be a welcome relief for those sickest seniors who are the hardest hit financially.

Will this plan help?
This plan is a start. Negotiated discounts may help some see reductions in the amounts they are paying for drugs. It may however hurt smaller pharmacies that are unable to purchase drugs in large enough quantities to participate in the discount programs. Will it work in conjunction with other discount programs or Medigap insurance that seniors may already have? That and many other details remain to be seen. It is encouraging to see Medicare reform on the radar screen at last. The President's plan is a beginning. We will be watching.