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More than seven million low-income Medicare beneficiaries who do not have Medicaid drug coverage could save as much as 86 percent off the cost of their drugs by enrolling in one of the top ten Medicare-approved drug discount cards, according to a new report from the Centers for Medicare & Medicaid Services (CMS). 

An analysis conducted by CMS compared savings available this year (June through December) through Medicare-approved drug cards, together with the $600 credit available to low-income Medicare beneficiaries to the prices paid by average Americans in retail pharmacies.  The analysis showed that low-income persons with Medicare who enrolled in the card programs offering the best prices could save between 32 percent and 86 percent off what they otherwise would have paid.  That could amount to more than $1,100 over the next seven months, the analysis shows.

Real examples of this kind of savings include Wanda Blackmore and Gladys Cole both of Kansas City.   Using her discount card and the $600 credit, Wanda reduced her monthly bill from $17 to $1.70, a savings of 90 percent.  Gladys dropped her monthly bill using the card and her $600 credit from $120 to less than $20, a savings of 83 percent.

“We already knew that the Medicare-approved drug discount cards will offer real savings to seniors,” said Health and Human Services Secretary Tommy G. Thompson.  “Price competition among card sponsors is resulting in even deeper discounts.  When combined with the $1,200 available to low-income seniors persons with disabilities over the next 18 months, there is just no question about the great benefits of this program.”

“Low-income seniors and people with disabilities who are struggling with the cost of drugs cannot afford to leave this money on the table,” said CMS Administrator Mark B. McClellan, M.D., Ph.D. “We will keep doing all we can to help these beneficiaries take advantage of the discount card program.”

Medicare beneficiaries who do not also have Medicaid are eligible for a Medicare-approved drug discount card.  Beneficiaries whose income in 2004 is not more than $12,569 if single, or no more than $16,862 if married (including their spouse’s income), may qualify for the $600 credit.  For beneficiaries applying for the $600 credit in 2005, their 2005 income may not exceed 135 percent of the federal poverty line for 2005.

There are three simple things beneficiaries should know when calling 1-800-MEDICARE:

1.      Their zip code;

2.      Their drugs and dosages (having the bottles in hand can help);

3.      Their monthly income.

CMS operators will send a personalized report that includes a list of the lowest cost cards and the pharmacies where they are accepted with an application so they can make a decision about which card is best and apply directly to the card sponsor.

In conducting the analysis, CMS used six illustrative Medicare beneficiaries who qualify for the $600 transitional assistance.   The findings show that these low-income beneficiaries could save a significant amount of money on prescription drugs purchased over the seven-month period remaining in this year, depending on the geographic area in which they live and the mix of drugs they take. 

Low-income beneficiaries enrolling in a card offering the best prices can save 32 to 86 percent compared to national average retail prices over a seven-month period when the $600 in transitional assistance is factored in.

Low-income beneficiaries enrolling in a card program that is number 10 on the list in terms of best prices still save a substantial amount – 28 to 72 percent for the baskets of commonly used drugs selected. 

Many drug manufacturers are joining with Medicare-approved drug cards to offer significant assistance after the $600 credit is exhausted. 

Consequently, even if a limited-income beneficiary enrolls in a Medicare-approved drug discount card that does not have the best prices but instead enrolls in the card that is number 10 on the list, large savings are still possible.  Our illustrative beneficiaries still get savings of as much as 85 percent or more compared to what a typical American would pay when the discounts, the $600, and the “wraparound” manufacturer assistance is taken into account.  That’s about $1,100 for a seven-month period. 

The report is available at (PDF).