June 1, 2004

June 1, 2004 | Commentary on Health Care

Discount drugs: Not in the cards?

There wasn't much to cheer about when Congress passed an expensive and inefficient Medicare "reform" measure last year. But the law did have a few useful elements, one of them the drug-discount card.

Unfortunately, many advocates who claim to speak for seniors are now trashing the drug-card program, which could cut poor seniors' drug costs by up to 60 percent.

First, some key facts:
  • The discount cards are accepting enrollees and take effect this month ( June.)
  • They are available to all Medicare enrollees who lack prescription-drug coverage.
  • They will offer significant help to seniors who need it most. They are expected to give those seniors who choose to sign up an average discount of 17.4 percent of retail prescription-drug costs, according to a recent study published in the prestigious health policy journal Health Affairs.
  • The program also provides low-income seniors a $600 subsidy to help with drug costs. Seniors without drug coverage are expected to spend, on average, $1,400 for drugs this year, so the drug-card program could reduce poor seniors' average out-of-pocket expenses by 60 percent.

It all adds up to a pretty good deal, especially for the more than 4 million low-income seniors (those whose incomes do not exceed $12,569 for an individual or $16,862 for a couple) expected to sign up for the cards. But to hear some politicians tell it, the cards will simply confuse seniors.

On the floor of the House of Representatives, for example, Rep. Stephanie Tubbs Jones, Ohio Democrat, said, "[Seniors] are probably going to spend so much time trying to manipulate or make it through the process that they are not going to be able to benefit from this at all." Rep. Fortney "Pete" Stark, California Democrat, told the New York Times, "The cards provide maximum confusion and minimal savings."

Speak for yourself, Mr. Stark. For most seniors, 60 percent is not "minimal savings." And even if the savings were "just" 17.4 percent, that's still a start. Something is better than nothing.

Admittedly, starting up a big new program is complicated. There are 39 national and 33 regional card plans to choose from. But that's a good thing. Having lots of choices will give seniors a chance to shop and compare prices. If seniors are able to get discounts on travel, hotels, restaurants, etc., they're capable of getting one of these discounts on prescription drugs. Seniors are savvy shoppers.

And members of the "Greatest Generation," defeaters of fascism and communism, are surely capable of deciding what's in their best interest, especially since the government has made it easy. Seniors with Internet access can go to www.medicare.gov and find out how much their prescriptions will cost under various plans. (This is also the first instance of transparency in the pharmaceutical market and will help bring down prices through competition.) Those without computers can call 1-800-MEDICARE to get the same help.

But here's where partisan politics come in. In the Roll Call newspaper, Morton Kondracke reports, "House Minority Leader Nancy Pelosi, California Democrat, and others, as part of a general effort to discredit the Medicare law, are urging seniors not to acquire [discount cards]." Forget not judging a book by its cover. This is judging a book before the cover is designed.

Beyond partisan politics, the card's opponents have another reason for wanting these cards to fail. If these cards drive down prices through competition and save seniors billions of dollars over the next two years, it would show real competition and patient-directed choice work in medicine.

That would shatter the myth that a government-run monopoly is the only way seniors can get quality, affordable health care.

As the start date for the Medicare drug discount cards arrives, expect to hear even more horror stories about poor seniors who are "too confused" to comparison shop and get discounts. It would be a shame if these scare tactics kept needy seniors from signing up for a new program that will give them real help.

Liberals and conservatives agree there are many problems with last year's Medicare "reform" law, and no organization criticized the creation of a new, costly entitlement more than the Heritage Foundation (heritage.org/research/healthcare/issues2004.htm). We still do. There's plenty that needs to be fixed.

But some good health policies came out of it, and one is the drug discount program. Let's give seniors a chance to get the prescriptions they need - and save some money in the process. There's nothing confusing about that.

Derek Hunter is a researcher in the Center for Health Policy Studies at the Heritage Foundation.

About the Author

Derek Hunter Research Assistant
Center for Health Policy Studies

Related Issues: Health Care

First appeared in The Washington Times