Assessing the Bush Administration's Proposed Medicare Drug Discount Card Program

Publication Date: March 2002

Publisher: Families USA

Author(s):

Research Area: Health

Type: Report

Abstract:

On March 6, 2002, the Bush Administration published in the Federal Register a proposal to establish a Medicare-Endorsed Drug Discount Card Program. (A similar proposal was previously announced but was halted by the United States District Court for the District of Columbia because the Administration attempted to implement the program without congressional authorization or public input.) This drug discount card program would be available to all Medicare beneficiaries, both seniors and people with disabilities. Medicare beneficiaries would have the option to enroll in one of numerous "Medicare-Endorsed" prescription drug cards. Beneficiaries would be permitted to enroll in only one Medicare-Endorsed card at a time but would have the opportunity to change cards in January and July of each year. Card sponsors would be permitted to charge Medicare beneficiaries a "one-time" enrollment fee of no more than "$25 in one year." The Administration is also considering the use of annual renewal fees. In exchange, beneficiaries would have access to the "discounted prices" offered by the card sponsor. The Administration estimates that, in the aggregate, beneficiaries could expect to save 12.4 percent on total prescription drug expenditures, under the best of circumstances.

Before details of the Administration's proposal were made public, Families USA--the national organization for health care consumers--developed key criteria to use in assessing the drug discount proposal. What follows is Families USA's evaluation of the Administration's plan, as
described in the proposed rules, based on these criteria.