State Law Cuts Drug Prices for Seniors

There is good news for the 4 million Californians on Medicare who are coping with often-hefty price increases for the prescription drugs they need to control blood pressure, reduce cholesterol, ease arthritis pain and other ailments.

California began a unique program on Feb. 1, giving people on Medicare the right to the same discounts the state gets when it buys drugs for 5 million people on Medi-Cal, a health insurance program for the poor.

The state Legislature and Gov. Gray Davis last year tackled a tricky issue that President Clinton and Congress are anxiously debating: whether to add a prescription drug benefit to Medicare, which does not cover drugs. Clinton wants the federal government to spend about $160 billion over 10 years to help pay for drugs for 40 million Medicare recipients. Republican Congressional leaders are strongly opposed to what they consider a reckless new spending program; they want the benefit limited to low-income individuals.

Thanks to California’s new law, the state’s Medicare beneficiaries--people over 65 and the disabled of all ages--could see savings of 10% to 30% on many common prescriptions, depending on whether the person buys a brand-name or generic product. In effect, an individual who spends, say, $25 a year on drugs would enjoy the same large-group discount as the state of California, which spends $2.4 billion annually for drugs under Medi-Cal.

For example, someone who now spends $43 for a month’s supply of Vasotec, a blood pressure medication, would get a bill for $31.04 under the state price schedule, according to aides to state Sen. Jackie Speier (D-Daly City), chief sponsor of the bill, SB 393.

The procedure should be simple: Go to a pharmacy that accepts Medi-Cal, show your Medicare card and ask for the state price discount. Be sure always to tell the pharmacist that you want the lowest price possible, because sometimes commonly prescribed drugs may be available at prices below the state Medi-Cal discount.

Also, you may save money by checking prices at several pharmacies. That’s because the stores may carry equivalent drugs made by different manufacturers, and the state discount may vary on those products. So you should know the name of the company making the drug your doctor has prescribed.

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There should be no paperwork: All the searching and comparing will be done by the computer at the pharmacy. The pharmacy will add a 15-cent service charge to the bill for sending the computer query to the Medi-Cal system. “When was the last time government saved you money without requiring that you fill out a form?” asked Speier.

The law was originally designed to help Medicare recipients who must pay cash for their prescriptions because they don’t belong to HMOs offering drug coverage, don’t have a supplemental Medigap policy that covers drugs, and don’t have retirement benefits that include pharmaceuticals.

However, people who already have some drug coverage may also benefit financially from the new law.

Drug coverage under HMOs has been getting more restrictive because of rising costs, with HMOs raising the deductibles members must pay each time a prescription is filled, and imposing new limits on annual drug benefits.

Secure Horizons, the state’s biggest Medicare HMO program, imposed a new ceiling of $2,000 for members in Los Angeles and Orange counties. Where the new law “really helps our members would be if they max out on their benefits,” said Glenda Owens, a spokeswoman for Prescription Solutions, a unit of PacifiCare, the corporate parent of Secure Horizons. A Secure Horizons member with a couple of high-priced drugs, such as Prilosec for gastric ulcers and Coreg for congestive heart failure, “could run over $2,000 fairly easily,” she said.

In other counties, drug spending caps at Secure Horizons and other HMOs may be lower, or perhaps there is no coverage at all, and members could turn to the state discount.

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Medigap supplemental insurance policies have a 50% co-payment and the maximum benefits range up to $3,000. People with Medigap coverage should check with their pharmacies to see if the Medi-Cal discount for a particular drug is less than they would pay with their 50% co-payment.

The best advice is to compare the price--whether it is through insurance, mail order or the Internet--with the new state discount.

Although the state has been notifying pharmacists across the state about the new law, many may not be prepared for a sudden flood of seniors seeking discounts. Pharmacists opposed the bill because it cuts into their profit margin.

“Be patient with the pharmacists; this is not a simple law to assimilate,” advised Peter Kellison, a lobbyist for the California Pharmacists Assn. “And thank them.”

The new law applies to anyone with a Medicare card, even those living outside California. If the drug savings are significant enough, it is possible that Medicare recipients from neighboring states will seek to take advantage of the discounts by traveling across the border. Speier already has received calls from legislators in 20 other states asking about her bill.

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Worried about rising costs, Secure Horizons announced last year that it would impose a new $20-a-month premium increase on its members in San Bernardino, Riverside and Kern counties. The HMO scrapped that plan after Congress passed a new law boosting federal payments to HMOs--and when it became apparent that the premium hike might convince some angry members to switch to other HMOs.

When Secure Horizons changed its mind near year’s end and sought to cancel the scheduled Jan. 1 price hike, the federal government refused to grant permission on a technicality: The deadline had passed for HMOs to file required paperwork. After more study, and some publicity in this newspaper and elsewhere, the government relented and said Secure Horizons could cancel the premium hike. But by then, some Secure Horizon members had already received bills for the $20 increase. A spokesman for the HMO advises members who got bills to simply thrown them out.

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Bob Rosenblatt welcomes your questions, suggestions and tips about coping with the changing world of health care. You can contact him by writing: Bob Rosenblatt, Health section, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053, or by e-mail at bob.rosenblatt@latimes.com