Your Questions Answered on the New Medicare-Approved Prescription Drug Discount Cards

By: Source: AARP Bulletin Today Date Posted: 2004-06-04 10:09:00-04:00

AARP Bulletin Online recently invited questions about the new Medicare drug discount cards. These are the answers to selected questions from the many we received. Responses are based on information from the Centers for Medicare & Medicaid Services, the federal agency that is overseeing the program, and from AARP experts.

If you don't know much about the Medicare drug discount card program, we suggest you first read the basic information contained in the AARP Bulletin article A Primer on the New Drug Discount, as many of the following questions are more specific.

Important: These questions and answers relate only to the voluntary Medicare discount card program, which begins June 1, 2004, and not to the full drug benefit program which does not begin until January 2006. The discount cards—and the $600-a-year credit that will be applied to the cards of eligible people with limited incomes—are intended as interim help toward prescription expenses until the full drug benefit comes into effect.

Here is a list of commonly asked questions about the Medicare discount card program. Click on the links below to read the answers.

How do I choose the discount card that's best for me?
Can anyone get a card? How do you apply?
Do my husband and I have to buy two discount cards for $30 each, or will one card cover both of us?
We're told you can get a $600-a-year credit added to the discount cards if your annual income is below $12,569 for a single person or $16,862 for a married couple. What does " income " mean?
Are the income limits for the $600 credit the same all over the country?
Am I eligible for the $600 credit if I already have drug coverage?
How does the $600 credit work?
My parents' total income is about $20,000 a year. My father, a veteran, gets his drugs from the VA, but my mother has nine prescriptions and no drug coverage. Can they split their income so that she can qualify for the $600 credit?
We are supporting two grandchildren on $18,000 a year. Does this alter the income limits for the $600 credit?
My 85-year-old father qualifies for the $600 low-income credit. But he is not currently taking any medications. Should I sign him up for a card so that he can get the credit, just in case he needs prescription drugs later?
I hear that I can buy only one Medicare discount card and will then be locked into that card for the rest of the year. Is there any protection to ensure that my drugs won't be removed from the formulary and that there won't be price increases during that time?
Is the one-card-a-year rule inflexible or are there exceptions?
If I don't purchase an Rx discount card, will I be penalized in any way when the 2006 drug benefit plan begins?
If I don't sign up for a card now, can I sign up later? Will I be penalized for signing up late?
Can I use a Medicare discount card at any pharmacy?
Do Medicare discount cards provide any discounts on over-the-counter drugs?
Can the Medicare discount cards be used to buy drugs from Canada?
I have supplementary insurance, Medigap J, which pays 50 percent of prescription costs after a deductible. Will the Medicare discount card decrease the cost of my prescriptions?
My mother has a Medigap supplementary policy that includes prescription coverage. Her income is less than $8,000 a year and she does not draw Medicaid. Her prescriptions cost about $100 a month. Will she benefit from the Medicare discount card?
I pay $2,736 a year for Medigap insurance plan J, which is a lot more than I would pay for a plan that doesn't cover drugs. Should I get a Medicare discount card and change to Medigap plan F, which would save me $942 a year?
I am enrolled in a Medicare HMO that gives me some drug coverage. Can a discount card help me?
How does a Medicare discount card work for people who are in nursing homes but not on Medicaid? Can the card be applied to prescriptions that come from the nursing home?
I live part of the year in Florida but stay with my daughter in Illinois the rest of the time. Will I be able to use a Medicare discount card in both places?
Do these cards offer any savings to people who have drug coverage and get each of their prescriptions for a $10 copay?
I have employee insurance coverage, which covers prescriptions with a copay, but it runs out at the end of this year. Will I have to wait till after it runs out before applying for my Medicare drug discount card?
My father is currently enrolled in several patient assistance programs sponsored by the various drug manufacturers. How will the Medicare discount card program affect his eligibility status for free medications from the drug companies?
I receive prescription drugs at low cost from my state's Rx assistance program. Can I have a Medicare discount card also?
If I apply for a Medicare discount card, can I still use my other drug discount cards or do I have to forfeit them?
I hear that AARP is sponsoring one of the Medicare drug discount cards. What is the difference between that one and the AARP pharmacy discount card I already have?
Who is paying for the discount? If there really is a discount, someone will be getting less than they are now. Who is it?
Medicare card savings are stated in percentages, but what is the percentage off of? Is there a suggested national retail price and is this the basis for all companies providing the cards?

1. How do I choose the discount card that's best for me?

You can choose only one out of more than 70 Medicare-approved drug discount cards sponsored by many private companies. Some of these companies will send you information about the cards that are available in your area. Each mailing should include two application forms—one just for the sponsor's discount card, the other for the card plus the $600-a-year low-income credit.

It is important to look carefully at the details of all the Medicare cards offered to you, in relation to the drugs you take, because once you have applied for a card, you will be locked into that one for the rest of the year (For exceptions to this rule, see Question 12). It is also important to look at other options that might be available to you—discounted prices elsewhere and other programs that might help you save money on drugs.

Here are ways to help you choose between the Medicare cards and determine which one (if any) suits your needs:

The official Medicare website is displaying details of the cards so that you can compare enrollment fees, prices offered for the drugs that are covered by each card, which pharmacies accept which cards and whether there is a mail-order option. For a step-by-step guide to help you navigate this site more easily, click here . (Medicare officials say the process of putting all these details online will continue in June, with regular updates afterwards. They recommend waiting until all the information has been posted online and taking time to do this research properly before making a choice.)
If you don't have access to the Internet, you can call the toll-free Medicare hotline, (800) 633-4227 [or TTY (877) 486-2408], for similar information. A customer representative will feed details of your location, drugs and pharmacy preferences into a computer and mail you a printout of the results. Be sure to have the names and dosages of your drugs at hand before you call. (Information at this number is available in some other languages, including Spanish, on request.)
It will be useful to note down the drugs you take, the dosage and the amount you're paying now in order to compare them with the prices offered on all the Medicare discount cards available in your area. AARP has devised a worksheet for this purpose which you can find in the May-June issue of AARP The Magazine or by clicking here (PDF file).
If you have difficulty paying for drugs, you should also look at the useful BenefitsCheckup website. By typing in your Zip Code and a few details about your income and the drugs you take, you will receive onscreen a customized report of all the assistance programs that are available to you. They include national, state and local programs, and others such as the free or low-cost drugs supplied by pharmaceutical manufacturers. You can compare this information, too, with price breaks you might get through Medicare discount cards and check out whether any other assistance is more generous than the $600-a-year credit or can be used to supplement the credit. (Note: This site does not require your name, address of social security number.)
For general questions on the discount cards, a free AARP booklet called Medicare Drug Discount Card: What You Need to Know is available online (English only) in PDF format. Alternatively, you can call toll free (888) 687-2277 [or TTY (877) 434-7598] to order a copy (stock number D18105 for English version, D18123 for Spanish version).

Another free AARP booklet explaining details of the $600-a-year low-income credit, Medicare Drug Discount Card: Helping Those With Limited Incomes can also be viewed online (English only) in PDF format, or by calling the same number (D18102 for English version, D18122 for Spanish version).

2. Can anyone get a card? How do you apply?

You can get one Medicare-approved drug discount card if you receive Medicare because you are 65 or older or disabled. You cannot get a card if you are already receiving prescription drugs through Medicaid or another Rx assistance program that is funded by Medicaid. If you are enrolled in any state drug assistance program you should call it to find out whether you are eligible for a discount card as well. (See Question 27)

If you decide to buy a card, you should apply directly to the company that sponsors the one you choose. (If you haven't received enrollment materials, call the company and ask for them to be mailed to you. You can get the company's phone number from the Medicare website or hotline.)

The card becomes effective the first day of the month after you enroll. You can begin using it any time from June 1, 2004 until the program ends in 2006 and the full Medicare drug benefit starts.

3. Do my husband and I have to buy two discount cards for $30 each, or will one card cover both of us?

If you want to join the Medicare drug discount program, you each have to purchase a card. But $30 is the maximum annual enrollment fee allowed under the law, and some cost less. The fees charged by the companies that are sponsoring the discount cards range from $0 to $30, with the majority set around $20. There is no enrollment fee for people whose limited incomes qualify them for the $600-a-year credit.

4. We're told you can get a $600-a-year credit added to the discount cards if your annual income is below $12,569 for a single person or $16,862 for a married couple. What does "income" mean?

It means gross income—all earnings, benefits and other money received that you would normally count in preparing your income tax returns before adjustments. It includes your entire Social Security benefit before Medicare premiums are deducted. (The 2004 income limits above translate to $1,048 a month for an individual, $1,406 a month for a married couple. The limits are likely to change in 2005.)

The Centers for Medicare & Medicaid Services (CMS), the federal agency that is overseeing the discount card program, has published a drug discount card enrollment tip sheet. It includes which kinds of income to include or exclude in making this calculation:

You should include: current earnings or unemployment compensation; pensions and annuities (including Railroad Retirement and Veterans Affairs (VA) benefits, and military and government disability pensions); Social Security benefits; IRA distributions; interest from savings and checking accounts, etc.; ordinary dividends from stocks, bonds, etc.; tax refunds and credits; received alimony; income from business, farms, real estate rentals, royalties, trusts, etc.; capital gains; and other gains or income from sale or exchange of business property, lottery winnings, awards, etc.
You should not include: Supplementary Security Income (SSI) benefits; workers and federal employees compensation payments; welfare and other public assistance benefits; child support and most foster care payments; proceeds from the sale of a home; life insurance benefits; long-term care insurance benefits; accident or health insurance benefits; accident compensatory damages; medical savings account withdrawals for medical expenses; inheritances and gifts; interest on state and local government obligations (e.g., bonds); income from national senior service corps programs; disaster relief grants; and disability payments as a result of a terrorist attack.

On the application form for the $600 credit, you need only write in your income as defined above. You do not need to send any documents proving it. But in signing the form, you are swearing that this is your true income (so you could face legal penalties for lying) and CMS reserves the right to check its accuracy with IRS returns and other government records.

5. Are the income limits for the $600 credit the same all over the country?

Not quite. If you live in Alaska, the 2004 limits are $15,701 for a single person and $21,074 for a married couple. If you live in Hawaii, they are $14,445 for a single person, $19,386 for a married couple. The income limits are set according to federal poverty levels, which are higher in these two states (because the cost of living is substantially higher) than the rest of the country. (If you live in Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa or the Northern Mariana Islands, different rules may apply. Call the Medicare hotline at (800) 633-4227 for more information.)

6. Am I eligible for the $600 credit if I already have drug coverage?

You do not qualify for the credit if you have drug coverage from any of the following: a current or former employer or union; the Federal Employees Health Benefits program (FEHBP); military health benefits (TRICARE); Medicaid or a state assistance program that receives funding from Medicaid.

You do qualify (subject to income limits) if you have drug coverage from the Veterans Affairs (VA) health care system, from a Medicare health plan (See Question 21) or from a Medigap supplementary insurance plan (See Questions 18 and 19).

7. How does the $600 credit work?

If you qualify, the credit ($600 for the rest of 2004 and another $600 for 2005) will be applied to whatever Medicare-approved discount card you choose. Each time you use the card the credit goes down. You must still pay a small copay—either 5 percent or 10 percent of the cost of the prescription, depending on your income—which will not count against your credit. For example, if your prescription costs $50 and your copay is 10 percent, you will pay $5. The remaining $45 will be taken from the $600 credit, leaving you with $555 to draw on for other prescriptions during the rest of the year until it is used up.

The credit you can get—a maximum $1,200 during the 19 months this program lasts—will decrease over time, according to when you apply. If you qualify and you apply within the following periods, this is how much you will receive:

Apply May 3 through December 31, 2004: you get $600 credit for 2004 and another $600 in 2005
Apply January 1 through March 31, 2005: you get $600 for 2005
Apply April 1 through June 30, 2005: you get $450
Apply July 1 through September 30, 2005: you get $300
Apply October 1 through December 31, 2005: you get $150

Any credit remaining at the end of 2004 can be rolled over for use in 2005, and any left over at the end of 2005 can be used for a further three months or until you sign up for the full drug benefit (whichever is sooner).

If you use up the credit before the end of each year, you can still use your card to get ordinary discounts. Also, several drug manufacturers—including Abbott, AstraZeneca, Eli Lilly, Merck, Novartis, and Wyeth—have said they will provide their products free or at low cost to people who exhaust their $600 credit before the end of the year and are enrolled in certain Medicare discount cards. Click on the link below to see the complete list.

8. My parents' total income is about $20,000 a year. My father, a veteran, gets his drugs from the VA, but my mother has nine prescriptions and no drug coverage. Can they split their income so that she can qualify for the $600 credit?

No. The joint income limit of $16,862 a year ($1,406 a month), though far less than double that of a single person, follows other federal benefit rules. This is a drawback for married couples who can share other household expenditures but have separate needs for medications. However, if a couple qualifies, each spouse will receive the full $600-a-year credit.

9. We are supporting two grandchildren on $18,000 a year. Does this alter the income limits for the $600 credit?

No. (AARP is trying to get this regulation changed to conform to rules in some other benefits, such as Medicaid, in which household income limits are higher for people with dependents.)

10. My 85-year-old father qualifies for the $600 low-income credit. But he is not currently taking any medications. Should I sign him up for a card so that he can get the credit, just in case he needs prescription drugs later?

Applying for the $600-a-year credit now would mean that if in future he needed drugs urgently—an expensive antibiotic for a sudden infection, for example—he wouldn't have to worry about the immediate cost. It would be better to sign him up sooner rather than later so that he receives the full amount due to him, as explained in Question 7. But if his income is this low, you should also check out whether he would qualify for help from a state pharmacy assistance program, if there is one where he lives, as explained in Question 27.

11. I hear that I can buy only one Medicare discount card and will then be locked into that card for the rest of the year. Is there any protection to ensure that my drugs won't be removed from the formulary and that there won't be price increases during that time?

You can buy only one card and then you'll have only one opportunity, at the end of 2004, to change to another before the program ends in 2006 (For exceptions to this rule, see Question 12). In contrast, the companies that sponsor the cards are permitted to change their formularies (the lists of drugs each covers) and the prices they charge at any time. (A bid by some senators to allow enrollees the right to switch cards every month was rejected by administration officials in early May.)

Critics say that this system could lead to bait-and-switch tactics. Medicare officials say that any card sponsor that tries to dupe seniors would be thrown out of the program. They also say that competition between the cards should be enough to keep prices stable and may even drive them lower, as well as encouraging companies to maintain consistent formularies. Some experts say that the drug companies—having heavily supported this competitive private system, as opposed to one run directly by the government—have a strong political incentive to give good discounts and make the program work. Meanwhile, consumer groups will take a watchdog role. AARP, which has asked drug companies not to raise prices during the lifespan of the discount card program, will be monitoring price changes every month.

12. Is the one-card-a-year rule inflexible or are there exceptions?

There are a few circumstances in which you may be able to change cards before the end of the year:

if you've bought a card that can be used only in one region of the country and then you move to another region;
if you move into or out of a long-term care facility;
if you enroll in or leave a Medicare HMO that sponsors its own card; or
if your card's sponsor withdraws or is expelled from the Medicare discount card program.

13. If I don't purchase an Rx discount card, will I be penalized in any way when the 2006 drug benefit plan begins?

No. The Medicare drug discount card program is entirely voluntary. You don't have to buy one if you don't want to. Not signing up will in no way affect your eligibility for the full drug benefit that begins in January 2006.

14. If I don't sign up for a card now, can I sign up later? Will I be penalized for signing up late?

You can sign up at any time from now until a short time before the discount card program ends on December 31, 2005. There is no penalty for enrolling late (as there will be for the full drug benefit). However, if you think you qualify for the $600-a-year credit, you should apply as soon as possible to take full advantage of it, as explained in Question 7.

15. Can I use a Medicare discount card at any pharmacy?

No. Each card sponsor has negotiated discounts from certain pharmacies (as well as from the drug manufacturers) and/or obtained assurances that its card will be accepted by certain pharmacies. You can find out which pharmacies accept which cards from information in the sponsors' mailings to you and from the Official Medicare website or by calling the Medicare hotline at (800) 633-4227. You can also call the sponsors, because they may have signed up more pharmacies after their initial mailings, and you can inquire at local pharmacies. Many cards also offer a mail-order option.

16. Do Medicare discount cards provide any discounts on over-the-counter drugs?

The cards are mainly intended to offer discounts on prescription drugs (both those with brand names and the lower-cost generic versions). But the sponsoring companies are allowed to offer discounts on over-the-counter medications if they wish. So you need to look at the details to see which cards do so, as explained in Question 1.

17. Can the Medicare discount cards be used to buy drugs from Canada?

No. The cards cannot be used to buy drugs from any foreign countries. But in many cases brand-name drugs from Canada and elsewhere already cost less than those available through any American discount cards, including these. Generic drugs, on the other hand, often cost more abroad than in the United States. Prices offered through the Medicare discount cards are posted on the official Medicare website, and you can use this information to compare them with the prices you pay for the same drugs from Canada.

18. I have supplementary insurance, Medigap J, which pays 50 percent of prescription costs after a deductible. Will the Medicare discount card decrease the cost of my prescriptions?

There are three Medigap policies that include drug coverage: H, I and J. These pay 50 percent of the cost of drugs, after a $250 deductible, up to a certain annual limit. (The other Medigap policies, A through G, do not cover drugs.) You must still pay the full amount of your deductible (unless you qualify for the the $600-a-year credit—see Question 19). But you can use a Medicare discount card in the following ways:

Any discounted price you obtain through the card will become the price on which your 50 percent copayment is calculated. In other words, it will lessen the overall cost, including your copay — in the same way as any discounts you've received in the past, such as from a local pharmacy. The same applies if you obtain your drugs through mail order from a company that accepts the card you've chosen.
Once you exhaust the annual limits of your drug coverage ($1,250 for plans H and I, $3,000 for plan J) you can use the discount card to decrease any remaining out-of-pocket drug expenses.

19. My mother has a Medigap supplementary policy that includes prescription coverage. Her income is less than $8,000 a year and she does not draw Medicaid. Her prescriptions cost about $100 a month. Will she benefit from the Medicare discount card?

Yes, because—apart from the ways the discounts could help, as explained in Question 18—her income qualifies her for the $600-a-year credit and the rules permit her to receive it even though she has drug coverage from a Medigap policy. When your mother receives her discount card, she must initially use the credit on it to pay for her prescriptions. When the 2004 credit is used up—in a little over six months in her case—she can return to using her Medigap insurance in the usual way until she receives the 2005 credit next year.

Under the $600 credit program, your mother would make copayments of 5 or 10 percent of the cost of the prescription, according to her income (as explained in Question 7). She can use these out-of-pocket copays towards paying down her Medigap $250 deductible. She will need to submit receipts or claim forms to her Medigap provider in order to have these copays subtracted from her deductible. Once she has exhausted the credit, she will be required to pay any remaining amount on the deductible before claiming her Medigap insurance. For example, if she has paid $60 in copays under the credit program, she will have to pay a further $190 out of pocket ($250 minus $60) before using her Medigap coverage.

20. I pay $2,736 a year for Medigap insurance plan J, which is a lot more than I would pay for a plan that doesn't cover drugs. Should I get a Medicare discount card and change to Medigap plan F, which would save me $942 a year?

You should not change. Discount cards are not substitutes for insurance. Medigap plans H, I and J save 50 percent of drug costs. In contrast, the cards offer different discounts on different drugs—maybe no more than 10 percent in some cases and few (if any) discounts will be as high as 50 percent for brand-name drugs. (Some generic drugs may have higher discounts.) However, used in addition to your Medigap plan, a card might reduce your expenses in some circumstances, as explained in Questions 18 and 19.

21. I am enrolled in a Medicare HMO that gives me some drug coverage. Can a discount card help me?

Many Medicare HMOs (and other kinds of health plans in the Medicare+Choice or Medicare Advantage programs) are sponsoring their own cards. If your plan is one of these, you can obtain only the card offered by that plan—and you'll be sent one, so you won't have to apply. If your plan is not sponsoring its own card, you can apply for any of the other Medicare discount cards.

A card will help if you qualify for the $600-a-year credit. Otherwise, discounts could still be used to lower your expenses if your drug coverage is not adequate enough to cover all the drugs you need. You should check with your plan for information on how the discount card program will fit into its system.

22. How does a Medicare discount card work for people who are in nursing homes but not on Medicaid? Can the card be applied to prescriptions that come from the nursing home?

Some of the companies sponsoring Medicare discount cards have designed them specifically for use in nursing homes and other long-term care facilities. These facilities will make their own arrangements about how the cards are used. Residents or their family members (or anyone else responsible for a resident's well-being) should consult the facility's administrators about how the system will work.

23. I live part of the year in Florida but stay with my daughter in Illinois the rest of the time. Will I be able to use a Medicare discount card in both places?

Yes—as long as you buy a card that covers the whole country. Many of the sponsoring companies offer their cards nationally. (The rest are restricted to single states, groups of states or long-term care facilities.) When choosing a card, you should check out which cards will be accepted both by your local pharmacies in Florida and those close to your daughter's home in Illinois. Many of the cards also have a mail-order option. Anyone who travels regularly within the United States should also choose a national card.

24. Do these cards offer any savings to people who have drug coverage and get each of their prescriptions for a $10 copay?

Anyone who pays $10 (or even $15 or $20) for every prescription is already getting a better deal than any discount card can offer. But if your coverage is limited—capped to a certain amount over a period of time—a Medicare discount card might help reduce your out-of-pocket expenses once the coverage is exhausted. Also, most people with drug coverage are not eligible for the $600-a-year low-income credit, as explained in Question 6.

25. I have employee insurance coverage, which covers prescriptions with a copay, but it runs out at the end of this year. Will I have to wait till after it runs out before applying for my Medicare drug discount card?

You can apply for a basic discount card at any time, providing you're a Medicare beneficiary. But if you qualify for the $600-a-year credit, you would have to wait until your employer's coverage runs out before claiming it.

26. My father is currently enrolled in several patient assistance programs sponsored by the various drug manufacturers. How will the Medicare discount card program affect his eligibility status for free medications from the drug companies?

If your father is already receiving free drugs from the manufacturers, he should not need a Medicare discount card. Even the $600-a-year low-income credit (which he would probably qualify for) would cost him money because using it requires a 5 or 10 percent copay. Also, if he claimed this credit he might lose his eligibility for the manufacturers' patient assistance programs, as they often require that applicants are receiving no other assistance in paying for drugs. But the drug companies have different rules on eligibility, so it is important to check this point with each company program that is providing your father's drugs.

However, if for any reason the manufacturers stop supplying these free medications to your father, he could always apply for the $600 credit and a discount card at that time. (Note that most Medicare beneficiaries will probably lose access to the drug companies' assistance programs when the full drug benefit comes into effect in 2006.)

27. I receive prescription drugs at low cost from my state's Rx assistance program. Can I have a Medicare discount card also?

It depends how the program is funded. You will not be able to get a card if your state drug assistance program receives money from Medicaid, the state-federal low-income health program. You will be eligible for a card, though, if the state Rx program has another source of funding—for example, a state lottery. As the rules are complicated, it's best to obtain precise information from the program you're enrolled in or from your State Health Insurance Counseling and Assistance Program (SHIP). Click on the links below to locate the contact information and website for the SHIP in your state. Or call Medicare at (800) 633-4227 or the Eldercare Locator at (800) 677-1116 and ask for the phone number of the SHIP in your state.

A few state programs offer more generous assistance than anyone would receive under the Medicare discount card program, with income limits much higher than those required for the $600-a-year low-income credit. If you're enrolled in one of these, the Medicare card program might not be of any benefit. However, some states may require enrollees to apply for the credit and use it before using benefits from the state assistance program.

28. If I apply for a Medicare discount card, can I still use my other drug discount cards or do I have to forfeit them?

You don't have to give up other cards if you apply for a Medicare card. You can use any cards you wish, but you can use only one for the same prescription. One card may give the best deal on one of your medications, whereas another card may give better savings on a different drug you take, so compare the prices offered on all your cards carefully. As discounts can change from time to time, you should ask the pharmacist which of your cards gives the best discount each time you fill a prescription.

29. I hear that AARP is sponsoring one of the Medicare drug discount cards. What is the difference between that one and the AARP pharmacy discount card I already have?

One of the new cards is sponsored by AARP and administered by the United HealthCare insurance company. The annual enrollment fee for this card is $19.95—the same as AARP's existing discount card. The difference between the two is that some discounts on some drugs may vary (because some drug manufacturers are offering lower prices for the Medicare cards than other discount programs) and the Medicare card offers the $600-a-year credit for eligible people with limited incomes, which the existing card does not. So if you qualify for the credit, the Medicare card will certainly have more value. Otherwise, you will need to compare the discounts on both (as well as the discounts offered by other Medicare-approved cards) to decide which is best for you, as explained in Question 1.

30. Who is paying for the discount? If there really is a discount, someone will be getting less than they are now. Who is it?

Each company that sponsors a Medicare-approved card negotiates discounted prices from drug manufacturers and, in some cases, pharmacies—so they are the ones that bear the cost. A company may do these negotiations directly or use specialized negotiators known as pharmacy benefit managers. This is the same as the system used in commercial health insurance.

The $600-a-year credit for people with limited incomes is different. This is a subsidy, paid for by the federal government out of tax revenues.

31. Medicare card savings are stated in percentages, but what is the percentage off of? Is there a suggested national retail price and is this the basis for all companies providing the cards?

Discount savings on the Medicare cards are percentages "off the retail price" at pharmacies, according to Medicare officials. But there is no single suggested retail price for each prescription drug in the United States. Instead, different entities (insurance companies, health plans, pharmacy chains, etc.) negotiate prices separately, as explained in Question 30.

The result is a wide variation of retail prices among pharmacies, and this is true for the Medicare discount cards too. A recent AARP Bulletin analysis noted in some cases a price range of more than $100 for a 90-day supply of the same drug among different cards.

Your Questions Answered on the New Medicare-Approved Prescription Drug Discount Cards

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1. How do I choose the discount card that's best for me?

Related Links:

2. Can anyone get a card? How do you apply?

3. Do my husband and I have to buy two discount cards for $30 each, or will one card cover both of us?

4. We're told you can get a $600-a-year credit added to the discount cards if your annual income is below $12,569 for a single person or $16,862 for a married couple. What does "income" mean?

Related Link:

5. Are the income limits for the $600 credit the same all over the country?

6. Am I eligible for the $600 credit if I already have drug coverage?

7. How does the $600 credit work?

Related Link:

8. My parents' total income is about $20,000 a year. My father, a veteran, gets his drugs from the VA, but my mother has nine prescriptions and no drug coverage. Can they split their income so that she can qualify for the $600 credit?

9. We are supporting two grandchildren on $18,000 a year. Does this alter the income limits for the $600 credit?

10. My 85-year-old father qualifies for the $600 low-income credit. But he is not currently taking any medications. Should I sign him up for a card so that he can get the credit, just in case he needs prescription drugs later?

Related Link:

11. I hear that I can buy only one Medicare discount card and will then be locked into that card for the rest of the year. Is there any protection to ensure that my drugs won't be removed from the formulary and that there won't be price increases during that time?

12. Is the one-card-a-year rule inflexible or are there exceptions?

13. If I don't purchase an Rx discount card, will I be penalized in any way when the 2006 drug benefit plan begins?

14. If I don't sign up for a card now, can I sign up later? Will I be penalized for signing up late?

15. Can I use a Medicare discount card at any pharmacy?

16. Do Medicare discount cards provide any discounts on over-the-counter drugs?

17. Can the Medicare discount cards be used to buy drugs from Canada?

Related Link:

18. I have supplementary insurance, Medigap J, which pays 50 percent of prescription costs after a deductible. Will the Medicare discount card decrease the cost of my prescriptions?

19. My mother has a Medigap supplementary policy that includes prescription coverage. Her income is less than $8,000 a year and she does not draw Medicaid. Her prescriptions cost about $100 a month. Will she benefit from the Medicare discount card?

20. I pay $2,736 a year for Medigap insurance plan J, which is a lot more than I would pay for a plan that doesn't cover drugs. Should I get a Medicare discount card and change to Medigap plan F, which would save me $942 a year?

21. I am enrolled in a Medicare HMO that gives me some drug coverage. Can a discount card help me?

22. How does a Medicare discount card work for people who are in nursing homes but not on Medicaid? Can the card be applied to prescriptions that come from the nursing home?

23. I live part of the year in Florida but stay with my daughter in Illinois the rest of the time. Will I be able to use a Medicare discount card in both places?

24. Do these cards offer any savings to people who have drug coverage and get each of their prescriptions for a $10 copay?

25. I have employee insurance coverage, which covers prescriptions with a copay, but it runs out at the end of this year. Will I have to wait till after it runs out before applying for my Medicare drug discount card?

26. My father is currently enrolled in several patient assistance programs sponsored by the various drug manufacturers. How will the Medicare discount card program affect his eligibility status for free medications from the drug companies?

27. I receive prescription drugs at low cost from my state's Rx assistance program. Can I have a Medicare discount card also?

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28. If I apply for a Medicare discount card, can I still use my other drug discount cards or do I have to forfeit them?

29. I hear that AARP is sponsoring one of the Medicare drug discount cards. What is the difference between that one and the AARP pharmacy discount card I already have?

30. Who is paying for the discount? If there really is a discount, someone will be getting less than they are now. Who is it?

31. Medicare card savings are stated in percentages, but what is the percentage off of? Is there a suggested national retail price and is this the basis for all companies providing the cards?

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