Beneficiary Information and Decision Supports for the Medicare-Endorsed Prescription Drug Discount Card

Publication Date: March 2005

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Health

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Abstract:

On December 8, 2003 the President signed into law the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA, P.L. 108-173). This legislation establishes a Medicare prescription drug benefit, effective January 1, 2006. In the interim, the legislation requires the Department of Health and Human Services (HHS) to establish a temporary program of Medicare-endorsed prescription drug discount cards.

The program has two objectives. One is to provide access to prescription drug discounts to Medicare beneficiaries who voluntarily enroll with a private card sponsor. The second is to provide low-income beneficiaries with transitional assistance to pay for some of their prescription drug costs until 2006, when the new Medicare drug benefit begins. Despite concerted efforts by the Centers for Medicare and Medicaid Services (CMS), 25% of the 7 million low-income beneficiaries who qualify for transitional assistance have enrolled in the card. Low-income Medicare beneficiaries could realize the most tangible benefit from enrolling since they would receive transitional assistance of $600 for both 2004 and 2005. Those who did not enroll in 2004 can do so by March 31, 2005 and receive the full $600 for 2005.

Beneficiaries can select from 38 national discount card programs offering different prices for specific drugs, some variation in covered drugs and distinct pharmacy networks. Thus, beneficiaries have many considerations when selecting a card. To make such a choice, they first need to know the program exists. Next, they need both information to determine whether to enroll in the program and decision supports to help them select the card most suited to their own circumstances.

Many of the same outreach and education methods CMS has used in the past to inform beneficiaries about new Medicare benefits are being employed and intensified for the discount drug card program. In particular, CMS has placed increased emphasis on the Internet as an information vehicle for beneficiary information.

Some observers have commented that the complex decisions beneficiaries must make about program enrollment and card selection have led to confusion and inaction among older people. These factors, coupled with the approximately 70% of Medicare beneficiaries who are unable to use the Internet for any purpose, some suggest, have constrained program enrollment. CMS has improved its outreach and education strategies as it obtained more beneficiary feedback. Many acknowledge that reaching low-income people with information that would encourage their enrollment in new programs is a difficult challenge -- one faced by many governmental programs.

The outreach and education experience of the discount card program can offer lessons for implementing the Medicare prescription drug benefit beginning in 2006. Then, decisions beneficiaries must make are likely to be more complex and the stakes higher for not enrolling and/or selecting a prescription drug plan that does not target an individual's needs as well as alternative plans. This report will be updated.