WASHINGTON -- The Bush administration estimates that 7.3 million Medicare recipients will sign up for the new prescription drug discount card next year, including 4.7 million with incomes low enough to receive $600 from the federal government to pay drug bills.
But 2.7 million other low-income beneficiaries will fail to enroll and forfeit the annual subsidy, government officials said Wednesday.
The card, expected to be available in June, is a step on the way to prescription drug insurance under Medicare that will begin in 2006. The drug card is included in the Medicare law that President Bush signed on Monday.
For an annual fee of no more than $30, the card should offer savings of 10 percent to 15 percent off overall drug spending, with savings on individual prescriptions as high as 25 percent, officials said.
The card is aimed at Medicare patients "without any insurance who pay full price for drugs," said Leslie Norwalk, acting deputy administrator of the Centers for Medicare and Medicaid Services. "These are often those who can least afford to pay full price," she said.
The law's opponents said the estimates of savings are inflated. Sen. Edward M. Kennedy, D-Mass., said that he is troubled that proposed rules issued Wednesday by the Health and Human Services Department for the card program do not require companies offering the cards "to pass on any discounts they obtain to beneficiaries."
In response to Kennedy, an HHS official pointed to a sentence in the 475-page document that says the program does require companies to "pass a share of the rebates or discounts through to beneficiaries in the form of lower prices."
The card is expected to be offered by insurers and pharmacists. They will have to demonstrate experience in administering prescription drug programs and negotiating discounted prices with drug makers in programs with at least 1 million people. Drug makers also could participate.
The card will have to cover at least one drug in 209 classes of prescription drugs, far more than most programs already available, and is expected largely to replace the assortment of pharmacy, insurance and drug maker discount cards now in use.
The cards are likely to offer different discounts for different drugs made by different companies. Participants will have to choose a card based on which one meshes best with their prescriptions.
Pricing information will be posted and updated on the Medicare Web site and also will be available from the Medicare help line, 1-800-Medicare.
Companies will not be required to lock in drug prices, but HHS officials said they have the authority to take action against companies that entice seniors with favorable prices, only to raise drug costs once people purchase their card.
Older people who have drug coverage are not expected to sign up for the card in large numbers, although they are permitted to enroll. Those with low incomes who receive drug coverage through Medicaid will not be eligible for the $600 subsidy.
For low-income people without drug coverage, the cards will function as prescription drug debit cards, with the government providing $600 a year to defray drug expenses. Depending on income, these cardholders will have to a co-payment of either 5 percent or 10 percent of the prescription's cost.
To receive the credit, people will have to attest that their income is below 135 percent of the federal poverty level -- $12,123 for 2003.
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