December 1, 2004

December 1, 2004 | Commentary on Health Care

Seniors Save Big With Medicare Drug Cards

If the government offered you hundreds of dollars with no strings attached, would you take it? How about if it was willing to throw in an extra $600 if you were low income? Nobody would knowingly walk away from that. Unfortunately, that's exactly what millions of senior citizens will do if they don't sign up for the Medicare Drug Discount Card by Dec. 31. A survey by The Polling Company, a Republican firm, shows that 31 percent of seniors on Medicare say they haven't enrolled in the MDDC program because of "criticism of the Medicare bill."

The MDDC program was part of 2003's Medicare Modernization Act and was one of only a few bright spots in the entire law. It allows seniors who lack prescription drug coverage to sign up for one of many cards that will give them discounts of up to 90 percent on their drug costs for an annual enrollment fee that never exceeds $30.

Low-income seniors - those with incomes of less than $1,047 per month for an individual and $1,405 per month for a couple - qualify for additional benefits. They can enroll in any card they choose and Medicare will pay the enrollment fee. Also, the card of their choosing will come with a $600 credit to help cover the cost of their drugs. The credit will cost them nothing and require them to pay only a small co-pay of 5 percent to 10 percent.

As if that weren't enough, many cards offer what is called "wrap-around coverage" from the pharmaceutical companies. That means if a senior's drug costs exceed the $600 subsidy, they will be able to purchase 30-day supplies of most, if not all, of their prescriptions for a flat rate of $12 to $15 each. In fact, with this wrap-around coverage, the MDDC offers prescription drugs to low-income seniors at prices lower than those in price-controlled Canada. (Even seniors with incomes above the level set by Medicare can qualify, based on need, for this benefit from drug manufacturers. If you are having trouble affording your prescriptions, talk to your doctor or the manufacturer of your prescriptions for more information.)

This is a situation in which low-income seniors and those without prescription drug coverage can't lose. Yet many of those seniors are going to miss out if they don't sign up for the cards by the end of this year.

The $600 is an annual subsidy placed on the card of a senior's choosing. Any unspent amount is automatically rolled over to the next year. This will allow seniors who don't spend the full amount this year to save even more next year. But many seniors haven't taken advantage of the MDDC either because they don't know about it or have been misinformed. They are, essentially, throwing away free money.

Luckily, it's not too late. As long as they enroll by the end of the year, seniors who qualify for the $600 annual subsidy will receive it for this year. It will then roll over into next year, meaning they can begin 2005 with $1,200 for prescriptions in their pockets.

There have been many criticisms about the MDDC. Some opponents claim there are too many choices or that the cards are difficult to sign up for. This is an insult to the intelligence of seniors. Unfortunately, though, these critics have managed to discourage seniors from enrolling, which only hurts the needy.

And needlessly so: The cards are not overly confusing, and no senior without drug coverage - regardless of income - will pay more with them. In fact, enrollees will save money.

Any senior without drug coverage should investigate these cards. In just 15 or 20 minutes, they can save hundreds, if not thousands, of dollars on prescriptions. Go to or call 1-800 Medicare. But most importantly, don't allow yourself to be intimidated or discouraged from asking.

Already 5.8 million seniors are saving money with the Medicare Drug Discount Cards, but there are more who should be saving.

The clock is ticking. If you're a senior - or know one - find out if you have money coming. It's the healthy choice you shouldn't walk away from.

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

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