Congress enacted new laws that will allow Medicare beneficiaries to get discounts on prescription drugs. The new law giving benefits for prescription drugs comes in two separate stages offering different benefits:

The first stage of the law is in effect until January 1, 2006. Under it:

A second phase of the program, which we will discuss later, takes effect January 1, 2006. The discount drug card program will be terminated at that point with new savings plans put into effect.

What Happens Between Now and January 1, 2006?

Leave it to the federal government to make something as simple as saving an average of 10 to 15 percent on prescription medications a big ball of red tape.

For annual fees of up to $30, Medicare-eligible patients can choose a Medicare prescription discount card that will offer discounts on some – but not all -- of their medications. That means eligible people need to figure out which card works best for them, and fast – the program expires in December 2005, when the second stage program will take over.

Cutting through all of the red tape may be a worthwhile pursuit – a June 2004 study found that Medicare beneficiaries taking medications for nine common health conditions showed savings ranging from 10 to 75 percent. The study, by the independent consulting firm CMS, also found that beneficiaries did not need to enroll in the program offering the biggest discount to achieve savings between 5 and 65 percent.

The government began making the cards available in May 2004. Some cards can only be used in certain pharmacies, and the amount of the discount varies from card to card, but generally averages between 10 and 15 percent. Annual fees are as high as $30 depending on which discount drug card you select, but in most cases the fees are waived for people below certain income levels.

But one study found savings as high as 75 percent on certain drugs, depending on the geographic area and discount card used:

It’s important to note that a drug you take now may not be discounted on all cards. It’s also important to know that you do not have to take a card if you do not want one. Not taking a card will have no impact on your Medicare benefits.

All cards have a “Medicare Approved” seal printed on the card. Unfortunately, there are already reports of people selling fake Medicare discount cards. The seal will look like this:

Many Medicare recipients received mailings or saw print and television commercials beginning in April that were designed to alert them to the program. Complete information about the discount cards available in your area can be obtained by calling 800-633-4227 (TTY: 887-486-2408).

Choosing The Right Medicare-Approved Discount Drug Card

Depending on where you live, you may have just a few choices to several different options when it comes time to choose your Medicare-approved discount drug card. First, you need to find out which cards are available for you to use in your area. You can do this by logging on to www.medicare.gov and choosing “Prescription Drug and Other Assistance Programs,” or by calling 800-633-4227 (TTY: 887-486-2408).

What follows is a revised work sheet that AARP has made available to its members to assist them in choosing the card that is right for them. Once you know what discount cards you can choose from, answer the following questions about each card:

All of this information is available directly from Medicare, or by calling the discount drug card company. The company may mail you the information or, if you have Internet access, refer you to its Web site.

Next, narrow the list of discount card providers to three, and use the following grid to help you make your final selection:

Other Considerations

If you have limited income, you can get a free card and up to $1,200 for 19 months in additional assistance. The assistance is split up into $600 installments in 2004 and 2005. To qualify, a single person’s income cannot exceed $12,569 ($1,047 per month) and a married couple’s income cannot exceed $16,862 (1,405 per month). Consult Medicare for variations for different states, including Alaska, Hawaii, and U.S. territories.

Income Worksheet

Use the following worksheet to see if you qualify for a free or reduced drug discount card and up to $1,200 in benefits.

Who is ineligible?

You are not eligible for a Medicare-approved discount card and credit if:

How To Use The $600 Annual Credit

In most cases, the credit is loaded on your discount card like a prepaid debit card. Every time you use the card, the credit is automatically deducted from your balance. You can ask your pharmacist each time you pick up a prescription how much remains on your credit. If you take advantage of the $600 credit, you will have a co-payment. Your co-pay will depend on your income, but it will not count against your credit.

For example:

Your prescription costs $100 and your co-pay is $10, or 10 percent.

You will be given the option to apply for the discount when you enroll in a discount card company’s program. It’s important to apply soon. You must apply for the credit by December 31 to receive the full credit for both 2004 and 2005. Use the following table to determine how much you credit will be, based on your application date:

What Happens After January 1, 2006

After January 1, 2006, the discount card will be terminated and if you choose the new plan it means you:

So is the program right for you? Here’s what will happen if you enroll in the program that takes effect January 1, 2006:

Congress is still working out the details of the second stage of the plan and how it will work, so the numbers above are subject to change.

Where To Go For Help

There are several places you can go for more information on the Medicare discount drug programs.

Call Medicare at 1-800-633-4227 (TTY/TDD 1-877-486-2048) or visit them on the Web at www.medicare.gov.

AARP offers a wealth of information on prescription drugs at www.aarp.org/prescriptiondrugs or by phone at 1-888-687-2277 (TTY 1-877-434-7598).

The National Council on Aging offers a Web site that will tell you what other benefits are available in your area and how to apply after answering a few simple questions online. Visit their Web site at www.benefitscheckup.org for more information.

Your elected representatives are in the business of seeing how they can help you locate money, services or anything else you need. They all have people on their staff whose job it is to do just that for voters. This is why politicians are always getting re-elected. If they do a favor for you, you will vote for them forever, no matter what they do. You will also tell your friends, your family and most people you meet. This is why over 95% of incumbents who run again get reelected.

Contact them all. They are all getting a government salary to help you and they all have access to different resources. The worst that can happen is that more than one person solves your problem. If you need help finding them, go to www.congress.org or your local library.

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