Medicare - Marketing, Discounts, Costs

San Antonio Express-News December 30, 2003 Medicare: Marketing the Plans, Drug Discount Cards and New Costs copyright 2003, Paul Premack
Last week, I wrote about how the “Medicare Prescription Drug, Improvement, and Modernization Act of 2003” (MPDIMA) will deal with the cost of your prescriptions when it begins in 2006. This week, I want to tell you about some of the other features of this law. First, Congress has allowed plan providers to market directly to you. The Medicare prescription drug plan (Part D) will not be run by Medicare. Congress is shifting the burden to private insurance companies. Starting around mid-2005 you are going to be receiving unsolicited advertisements from those insurance companies. Congress instructed the US Department of Health and Human Services to provide to the insurance companies any information about you that the Department “determines to be necessary to facilitate efficient marketing” of the drug plans. It appears that, despite the no-call list to avoid unwanted phone sales, Congress created an exception for insurance marketers who call about their drug plans. Second, you have probably read that there will be a “discount card” offered under MPDIMA. This is to begin no later than June 2004, and is voluntary (you do not have to enroll if you do not want to). Anyone entitled to Medicare will be able to get a card, but a card sponsor can charge an enrollment fee up to $30. The law encourages a wide variety of companies to sponsor a card – it may come from a “pharmaceutical benefit management company,” a “wholesale or retail pharmacy delivery system,” an “insurer” or a health maintenance organization. A discount card must be set up to provide “convenient access” to a dispensing pharmacy. Rules will forthcoming to define just what that means, but the law says that it cannot be any less convenient than the standards established for the military TRICARE program. Third, the card must give a discount on the purchase of pharmaceuticals tied to a “negotiated price.” However, Medicare itself cannot be involved in the negotiations between the drug manufacturer and the drug dispenser, so there will not be a uniform negotiated price for a particular drug. Congress allowed for price variations between different card sponsors. It may be a good idea to have a list of your prescriptions available, so you can inquire about their availability and cost under various discount offers. Fourth, you may have also read about $600 being available in 2004 and 2005 to help you buy your prescriptions. However, the law, in it final form, does not provide that assistance to all participants. It is limited to persons whose income is below 135% of the poverty line. (For a family of two, that would have been $16,362 in 2003 – it may be slightly higher in 2004). There will be a few exceptions in the regulations, but they have not yet been written. Finally, you may have heard that there will be an increase in the Medicare Part B premium (over and above the annual inflation adjustment). This is true, although the additional increase will apply only to individuals with annual incomes of $80,000 or more. MPDIMA’s provisions on the additional increase remind me of complex provisions in the tax code; they seem designed to block an easy understanding of their impact. I’ve done a deep analysis of them, and will provide that information to you in next week’s column.

Disclaimer: This column answers a specific legal question asked by an individual in Texas. The answer may or may not match your individual situation. Be careful not to treat this column as specific legal advice, as it may not meet your individual needs. It may give you a solid basis for discussion with your own attorney. You should consult with your personal attorney before you take any action on this or any legal issue. Also, please be aware that laws change, so this column is valid only as of the date it was published. This communication does not create an attorney-client relationship between the author and the reader.