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Wednesday, June 9, 2004
Drug cards explained, defended
Copyright © 2004 Blethen Maine Newspapers Inc. | ||
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WASHINGTON — Confusion about the new Medicare discount cards for prescription drugs ranges from skepticism about the savings available to concerns about losing other federal benefits, according to testimony Tuesday at a congressional hearing. But Dr. Mark McClellan, administrator of the Centers for Medicare and Medicaid Services, assured the Senate Finance Committee that prices are lower with the cards, that providers must justify higher costs in order to raise prices and that federal officials are trying to steer the elderly and disabled through the maze of choices available. "By waiting, they may be leaving a lot of money on the table," McClellan said of people still trying to figure out the card program, which began June 1. Lawmakers raised a series of questions about the cards after advocacy groups questioned the size of discounts and the lack of education about the 73 programs. Of 42 million people in Medicare, the government estimated 7.4 million would sign up for discount cards, but so far only about 2.9 million have been enrolled. Of those, about 2.3 million were automatically enrolled through their Medicare health-maintenance organizations, none of which operate in Maine. Sen. Tom Daschle, D-S.D., said one of his constituents told his staff that state officials threatened to reduce her food stamps because of the $600 drug benefit. Daschle argued that either the federal program is flawed or that it hasn't educated state counterparts well enough. McClellan replied that the Medicare law specifically states that the drug card can't hurt other federal benefits. Prices are also a concern. A week ago, the consumer advocacy group Families USA released figures suggesting that drug manufacturers raised the price of drugs in anticipation of discounting them for cardholders. McClellan said federal regulators compared prices in January 2003 to now and found the cards offered discounts ranging from 9 percent to 30 percent. Because the comparisons are steering more recipients to generic alternatives, some are saving up to 70 percent. Sen. John Breaux, D-La., asked what would prevent card providers from dropping drugs or raising prices after people sign up. McClellan said regulators would study price hikes to ensure that they resulted from higher costs to the provider, as required by law. Providers could be fined up to $10,000 and kicked out the program if they raise prices unfairly. "They can't just engage in bait-and-switch," McClellan said. Sen. Olympia Snowe, R-Maine, said problems with the discount cards concern her because creating a comprehensive drug insurance program under Medicare by 2006 will be even more complicated. "The prescription drug discount card got off to a fairly rocky start," she said. The concerns are less intense in Maine because two state discount card programs - Maine Rx and Drugs for the Elderly - already save participants on average more than the federal discount-card program. Drugs for the Elderly covers anyone at least 62 years old or disabled who earns up to 185 percent of the federal poverty level, which is $17,224 for an individual. About 42,000 people participate. The federal program offers a $600 credit in 2004 and 2005 to low-income Medicare recipients. To be eligible, an individual must earn less than 135 percent of the poverty level, which is $12,569. In Maine, state officials negotiated with one provider of a Drugs for the Elderly card to automatically enroll its participants for the $600 credit. Of the 5,800 people who are eligible, about 100 chose to get a different federal card, perhaps to get psychotropic or cancer drugs that the state program doesn't cover. Groups including Families USA and Democratic lawmakers complain that the law prohibited Medicare from negotiating lower prices from drug manufacturers, as the Department of Veterans Affairs already does. Veterans enjoy much lower prices on the 10 most popular brand-name drugs, according to Families USA. But McClellan argued that price negotiations work only when patients can be shifted from one medication to another. He said the list of drugs covered for veterans doesn't include popular drugs such as Lipitor or Celebrex that Medicare recipients want, so he is focusing on reducing prices through the discount cards and broader use of generics. "My main goal right now is to help seniors with their drug costs," he said. Staff Writer Bart Jansen can be contacted at (202) 488-1119 or at:
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