Many Seniors Are Letting Healthcare Savings Slip By

Confusion and ignorance may be keeping seniors from signing up for a potentially valuable new benefit -- prescription drug cards.

The cards, authorized by the Medicare Modernization Act passed last year, promise savings of as much as 30% on prescription medicines and a subsidy of as much as $1,200 for low-income Medicare recipients over the next 18 months.

However, only about 2.8 million of the 41 million individuals qualified to get the cards signed up during the last five weeks -- and all but about 400,000 of those were automatically enrolled by their health plans, rather than signing up independently, health officials said.

Experts believe that’s largely because the program is complicated and overlaps with dozens of other often complex corporate and state-run prescription programs.

However, Sen. Charles E. Grassley (R-Iowa) said the cards were getting a bad rap. In congressional hearings last week, he said political foes were undermining the program, which has been marketed through Medicare and direct mail. His hearings were partly aimed at boosting awareness and countering criticism of the program’s complexity.

Some seniors don’t need the cards to get good drug deals -- even deals that are better than those offered with the cards. But others do. Failing to investigate the Medicare cards could prove a costly mistake, experts said.

“It’s not easy, but it’s worth the effort,” said Scott Parkin, spokesman for the Access to Benefits Coalition, a newly formed Washington, D.C., group. “In some cases, the savings can equal thousands of dollars a year.”

The prescription drug card program is a transition plan, aimed at filling the gap between now and 2006, when some prescription drug benefits become available under Medicare. The program, open only to Medicare beneficiaries, has two parts.

The first and undeniably most valuable portion of the program consists of drug subsidies available to people 65 and older whose incomes fall below 135% of the federal poverty line.

These subsidies, which amount to $600 a year, are available to individual Medicare recipients earning less than $1,047 a month and couples earning no more than $1,404 a month, according to the Centers for Medicare and Medicaid Services in Baltimore.

There is no downside to applying for the card if you qualify for a subsidy payment, said Kris Gross, director of the State Health Insurance Information Assistance Program in Iowa. Where other income-tested Medicare programs consider the senior’s assets as well as income, this one does not, she said. Additionally, those who qualify for the subsidy also qualify for fee waivers on the drug discount cards -- some card providers otherwise charge as much as $30 a year for a drug discount card.

Then, too, those who qualify for subsidies are likely to qualify for other discounted and free drug programs offered directly through pharmaceutical companies, Parkin said.

“You have to understand that this card could open the door to a lot more savings,” Parkin said. “Enrollment can provide access to that.”

The seniors who qualify for a subsidy will treat their drug discount cards much like debit cards that are pre-loaded with $600. The cardholder presents the card to a pharmacy when getting a prescription; the pharmacy applies any appropriate discounts to the order and uses the money that’s loaded on the card to pay the balance. Once the $600 is used up, seniors will have to use their own money for prescriptions, but the card will still win them a discount on drug costs.

In January, an additional $600 subsidy will be loaded onto qualifying seniors’ cards. However, in 2006, the permanent Medicare drug coverages will kick in and the prescription drug cards -- and the prescription drug subsidies -- will disappear.

“The $600 credit is a key feature of the program,” Gross said. “We want people to know about that and get signed up for it.”

Those who do not qualify for the $600 subsidy have a tougher decision when considering whether to apply for a prescription drug card, said Aileen Harper, acting executive director of the Center for Health Care Rights in Los Angeles.

That’s because those with health insurance coverage -- or even a good discount pharmacy -- may find that the cards provide no additional savings over the discounts they already enjoy, she said.

Indeed, those who don’t qualify for subsidies will find that the value of drug discount cards will vary by where they live, the pharmacies they use and the drugs they take, Harper said. Costco and some online pharmacies charge less than the discounted price offered with some of the cards, she noted.

Moreover, Californians already have a senior drug discount plan. State law allows all Medicare recipients to ask their pharmacies for the Medicare price. In some cases, that provides a discount without the bother of a card, she said.

Still, depending on the drug plan and the type of medications the senior takes, the plans could provide significant savings -- particularly to those with no other drug coverage and a regular need for costly medicines.

How can a senior find out whether a drug card is worth buying -- and which one is best? Medicare sponsors a drug card comparison website at www .medicare.gov.

However, to use it effectively, seniors should compile a complete list of the prescriptions they are taking, including dosages, with information about how much they are paying for those prescriptions, experts suggested. With that information, they can use the site to cost-compare the drug cards available in their ZIP Code.

To get the best search result, seniors also should have information about their monthly income, because this will determine whether they can qualify for the $600 subsidy and other discount programs offered by drug manufacturers.

Those who don’t have access to the Internet can do the comparison over the phone by calling (800) MEDICARE.

Parkin, of the Access to Benefits Coalition, also suggests that seniors do a price check at www .benefitscheckup.org. Click on the “Rx” prompt to get information on prescription discounts, just as on the Medicare site.

In a few months, Parkin said, his group hopes to expand the site to include information about a variety of medical assistance programs in addition to the drug cards. The idea is to have the senior plug in the pertinent information and then get the site to mix and match drug discounts and patient assistance plans that suit the individual consumer’s location, drug needs and income.

That should vastly simplify the process of finding and applying for the array of publicly and privately funded medical benefits available to the elderly, he added.

The comprehensive checkup isn’t ready yet, but the group hopes to have it online next month, Parkin said.

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Kathy M. Kristof, author of “Investing 101” and “Taming the Tuition Tiger,” welcomes your comments and suggestions. Write to Personal Finance, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012.