For Immediate Release
Office of the Press Secretary
August 11, 2004
Fact Sheet: Medicare Drug Discount Cards Help Seniors Save on Prescription Drug Costs
Real Savings for Seniors
- More than 4.1 million seniors are already using their cards to
save money on their medicines. More than 100,000 beneficiaries
are signing up every week. Studies conducted by the Center for
Medicare and Medicaid Services (CMS) and the Kaiser Family Foundation
have shown that these cards are delivering real savings to Medicare
- About one million low-income seniors have qualified for extra
assistance. In addition to these savings, low-income seniors
struggling with high drug costs are getting a $600 a year credit -- a
total of $1,200 through the end of 2005 - to help pay for
prescriptions. And most major pharmaceutical companies have agreed to
make their drugs available for nominal fees once a beneficiary has
spent his or her entire subsidy.
- Signing up for the new cards is easy. While millions of seniors
already are saving on their prescriptions, millions more are eligible.
Beneficiaries can call 1-800-MEDICARE, visit www.medicare.gov, or call
their state's Health Insurance Assistance Program (SHIP) to sign up for
- Seniors often have had to pay full price for drugs. Through the
Medicare-approved drug discount program, the purchasing power of
seniors is finally being pooled to provide real savings on
prescriptions. And the drug card program also gives seniors
unprecedented information on drug prices to comparison shop.
- Seniors can use the card to save 15 to 30 percent off the usual
retail price of most brand name drugs and more on generics at
neighborhood pharmacies. These discounted prices at neighborhood drug
stores are lower than those offered by popular mail order pharmacies.
For Medicare beneficiaries who are comfortable with mail-order, a
recent study found savings of 7 to 24 percent or more on mail-order
prices for brand name drugs through Medicare-approved cards in
comparison to some Internet sources.
- Potential savings from the cards are even greater when seniors
choose generics. A CMS study shows that savings on generic drugs
range from 37 to 65 percent below the average generic prices paid by
all Americans. Generic drugs are just as safe and effective as
brand-name drugs in the United States, and generally cost about 70
- Low-income seniors can get these savings and an additional $600 a
year -- $1,200 through the end of next year. The $600 credit is
available only through cards with the Medicare-approved seal. There is
no enrollment fee on any card for people who qualify for the $600
low-income credit. This subsidy, combined with discounts available
through the card, can save eligible seniors 32 to 86 percent off what
they are now paying for their medicines.
- Beneficiaries who qualify for the low-income credit will receive
the entire $600 amount no matter when they sign up in 2004, and a
pro-rated amount depending on when they sign up in 2005. Any of the
$600 credit not used in 2004 will be carried over in their account for
use in 2005.
- Beneficiaries who exhaust the $600 subsidy may get
additional savings. A growing list of drug manufacturers has agreed to
make many of their products available at a nominal price to
beneficiaries who have used up their $600 subsidy on prescription
medicines. These seniors will benefit in three important ways from the
cards: 1) lower prices on their medicines; 2) a $600 subsidy to help
them buy these medicines at the discounted prices; and 3) availability
of drugs at a nominal price through manufacturers once they've spent
- The new drug card will not affect benefits under
other Federal programs. The Medicare law stipulates that the discounts
and subsidies available through the cards will not result in a
reduction or loss of benefits under any other federal program,
including the food stamp program.
Information to Help Seniors Choose a Card
Just the Beginning of Savings for Seniors
- Seniors can learn how to sign up for the card and find the best
card for them by calling 1-800-MEDICARE, by visiting www.medicare.gov,
or by calling their state's Health Insurance Assistance Program (SHIP).
- Medicare customer service representatives will review the caller's
drug needs and help them select the card that best meets their needs.
The average wait time to speak with a customer service representative
is less than 2 minutes, and the average call time with a customer
representative is about 9 minutes. So it takes on average less than
12 minutes to sign up for savings.
- Beneficiaries can make it even easier to choose a card by having
the following information ready when contacting 1-800-MEDICARE:
zip code; list of prescription drugs, including dosage; income to
determine if they are eligible for the $600 credit; and any special
preferences, such as a particular pharmacy they like.
- The web site, www.medicare.gov has price comparison tools that
seniors can use themselves. For the first time, seniors can get information on actual drug prices so they can comparison shop.
- The Department of Health and Human Services (HHS) has made an
additional $4.6 million available to organize and fund community-based
organizations to help low-income beneficiaries enroll in the program.
This is in addition to the $21 million previously made available to the
State Health Insurance Assistance Programs (SHIPs), and HHS's
enrollment efforts with the Access to Benefits Coalition, a new group
of 75 organizations.
- The Medicare-approved drug discount cards are just the beginning
of savings for seniors. In 2006, seniors without coverage will be
able to join a Medicare-approved plan that will cut their yearly drug
costs roughly in half, in exchange for a monthly premium of about $35.
In many cases, the savings will be even greater. For example:
- Seniors with no drug coverage and monthly drug costs of $200 will save
more than $1,700 on drug costs each year.
- Seniors with no drug coverage and monthly drug costs of $800 will save nearly $5,900 on drug
costs each year.
- Seniors will be protected against high
out-of-pocket costs with Medicare covering 95% of drug costs over
$3,600 per year.
- The new law will help make employer-subsidized
retirement benefits more secure by providing Federal subsidies to
employers that continue to provide this coverage.
- Low-income seniors will receive additional help paying for their
- There will be no additional premium, no deductible
and low co-payments ($2 for generic or $5 for brand-name drugs) for
seniors with limited savings and incomes at or below 135% of poverty
(individuals with yearly incomes under $12,568 and senior couples under
- There will be a reduced premium, a $50 deductible, and
a 15% co-insurance (85% of their drug costs will be covered) for
seniors with limited savings and incomes between 135% and 150% of the
Federal poverty level (individuals with yearly incomes under $13,965
and senior couples under $18,735).
- Under a modernized Medicare, private health plans will compete for
seniors' business by providing better coverage at affordable
prices-helping to control the costs of Medicare by using market-place
competition, not government price-setting. And seniors will be able to
choose the health care plan that best fits their needs-instead of
having that choice made by the government.