This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
WASHINGTON, Apr 02, 2004 (United Press International via COMTEX) -- Consumer advocates are worried the Medicare prescription drug discount cards, which begin enrollment in May, will be too confusing for seniors and could lead to fraud, so the government is trying to answering those concerns with online and mailed information, as well as a multi-media ad campaign.
The Department of Health and Human Services has approved plans for 48 general drug discount cards, including 27 that will be available nationally to all beneficiaries. Thirty-six of the general cards will charge an enrollment fee under the $30 maximum allowed, and five cards will be enrollment fee-free. Medicare Advantage health plans also will offer discount cards to their enrollees.
The plans are completing their contracts with HHS and are expected to begin enrollee sign-ups in May, with benefits starting June 1. The discount drug cards are a bridge until the permanent Medicare drug benefit begins in 2006.
Gail Shearer, of Consumers Union, told the House Ways and Means Committee Thursday her group is not optimistic the new discount drug program would "provide the level of relief needed" by seniors who struggle to afford their needed medications.
"An estimated 23 percent (of seniors) have cognitive impairments and are likely to be overwhelmed by the task of selecting a card," said Shearer, CU's director of health policy analysis in Washington.
Her testimony backed up recent surveys of seniors that show many either are not aware of the drug program or do not understand it. Other surveys show seniors who are familiar with the new Medicare drug law are unhappy with its provisions.
Rep. Nancy Johnson, R-Conn., responded she is "not quite as concerned" about senior confusion because she has seen how easily and well seniors have figured out how to purchase their drugs from Canada.
Johnson said although "we can do our seniors in America no greater harm than confusing them" she chided Shearer's group for putting out information on the program that contained "factual errors" and offered to work with the Consumers Union to educate seniors.
On the heels of criticism over and investigation into its advertising of the new Medicare law, HHS has outlined an information campaign for the discount program. Its most recent advertising blitz is under investigation over use of taxpayer dollars for what critics allege is a political ad for President George W. Bush's re-election campaign. HHS also was criticized for paying actors to represent real reporters in the ads.
This HHS campaign will include a pamphlet, "Guide to Choosing a Medicare-Approved Drug Discount Card," and an expanded Web site at medicare.gov, which will allow seniors to type in some basic information and in return obtain the names of cards available to them, as well as contact information and enrollment forms.
Starting April 29, seniors will be able to use the Web site to compare drug prices card by card, and find out which pharmacies in their area will accept the new cards. In addition, seniors will be able to get information by calling the 1-800-MEDICARE number to request mailings explaining the new program.
HHS also is planning print, radio and television ads on the discount card campaign that will feature the toll-free number. The ads will target low-income seniors, who may be eligible to receive an extra $600 on top of the card discounts, which are expected to range from 10 percent to 15 percent.
Michael McMullan, deputy director of the Center for Beneficiary Choices within the Centers for Medicare and Medicaid Services, told the committee that additional customer service representatives will be hired to answer the toll-free Medicare line. It is expected to field 12.8 million calls this year, compared to 5.6 million in 2003.
Susan Rawlings, a vice president of Aetna Inc., said for its national RX Savings Card, the company conducted focus groups in California, Florida and Colorado to gauge senior understanding and views of the program. She said they found seniors generally were aware of premiums and choices under currently available state discount drug programs.
Shearer cautioned, however, if seniors face an array of complicated choices, it creates the potential for fraudulent schemes by card sponsors.
"CMS must guard against the bait and switch and other market manipulation," she said, adding that the agency should monitor card sponsors who make frequent changes in their drug formulary and drug costs and retain the option of dropping them from the program.
In her testimony, she noted CMS already was investigating reports of illegal activities, including scammers posing as government workers, who have telephoned seniors and gone door-to-door in Alabama, Georgia, Idaho, Nebraska, Oklahoma, New York and Rhode Island, trying to sell phony discount cards.
The consumer complaint Web site, ripoffreport.com, has received 700 e-mail messages about a site called pharmacycards.com, which apparently had offered 80 percent drug discounts -- listing an address in British Columbia.
"Although the drug discount card program has not yet been implemented, some Medicare beneficiaries have already received calls as well as in-person solicitations from individuals or companies posing as Medicare officials attempting to gain personal information from beneficiaries for identify theft," McMullan testified. "Beneficiaries who are contacted by these false card companies should remember that Medicare-approved cards will not be available until May. The names of approved card sponsors have been made public and the companies will begin to market their cards through commercial advertising and direct mail beginning this month. Medicare-approved card sponsors will not market their cards door-to-door or over the phone."
HHS expects some 7.3 million seniors to sign up and Shearer also questioned whether those numbers, divided among the many plans offering discounts, would generate enough enrollees per plan to provide the "bulk" purchasing power needed to obtain the expected discounts.
She cautioned if drug prices rise by 10 percent per year on the cards, a 10 percent discount will not mean much for seniors.
Copyright 2004 by United Press International.