With the first phase of the new federal Medicare drug benefit underway, older Americans face the formidable task of sifting through a mountain of Medicare-approved prescription drug discount cards.
However, in the 22 states that already help senior citizens pay for medicines through discount or subsidy programs, elderly residents have at least one more decision to make whether to choose a Medicare discount card, remain in their state-sponsored program, or in some cases do both.
So far, more than 4 million Americans have signed-up for a Medicare discount card, which is a stop-gap measure to limit seniors' drugs bills until January 2006, when the more-comprehensive Medicare drug benefit Congress approved in 2003 kicks in.
The Medicare cards can provide savings of up to 18 percent on a range of brand name drugs and up to 60 percent on generics, federal health officials said. They're available for anyone over 65 years old who does not qualify for Medicaid, the state-federal health insurance program for the poor and disabled.
"I think everybody wishes it was easier than this," said Jeanine L'Ecuyer, spokeswoman for Arizona Gov. Janet Napolitano (D), who launched the state's own discount card Copper Rx in January. Anyone over 65 years old is eligible for the state card, which offers across-the-board savings of 15 to 25 percent on medicines.
The state took great strides to get the word out about the governor's initiative by sending out letters to nearly one million senior citizens across the state and also posted a chart on the state's Web site where seniors can compare the state benefit with those offered by Medicare.
L'Ecuyer concedes it's been a challenge to inform older Arizonans that the benefit is even available and also to quell confusion about the array of options before them.
In fact, across the country, many seniors are still unaware that the federal Medicare discount program exists, said Tricia Neuman, who's conducted survey research as vice president of the Medicare Policy Project at The Henry J. Kaiser Family Foundation. "You can't be confused until you know about something and there are a majority of seniors who lack basic knowledge," Neuman said.
So L'Ecuyer said Arizona officials are urging people to investigate their options and shop around for the best price.
"We're not saying our card or no card. What we're saying is use our card and use the Medicare card for which you qualify, compare them and get the best deal for yourself," L'Ecuyer said. "In some cases the Copper card is going to be better, in some cases the Medicare card is going to be better."
Lower income seniors in Arizona, for example, would likely see a greater benefit through one of the more than 70 Medicare cards available. Unlike the Copper card, which provides a retail discount only, the Medicare benefit offers a $600 federal subsidy in 2004 and another $600 in 2005 to people whose incomes are less than 135 percent of the federal poverty level.
However, in Wisconsin, which runs a more generous prescription drug subsidy program called SeniorCare, the majority of older residents would be better off retaining their state coverage, said Melanie Fonder, press secretary for Gov. Jim Doyle (D).
Because the state got permission from the federal government to expand their Medicaid program's drug benefits to certain non-Medicaid eligible seniors, SeniorCare participants must choose either the state or federal discount card. Gov. Doyle posted a benefit comparison chart and a letter on the state's Web site June 4 telling seniors to examine the Medicare options, but advising them to stay put.
In addition to Arizona, which is encouraging low-income seniors to sign-up for the $600 in federal transitional assistance, seven other states are automatically enrolling poor seniors now receiving state drug assistance in the new Medicare discount card program.
Connecticut, Maine, Michigan, Massachusetts, New Jersey, New York and Pennsylvania, whose laws authorize them to act on behalf of people who receive drug benefits from the state, hope the move will likely save money by relieving the state of paying the initial $1,200 in drug costs in 2004 and 2005.
"The states have focused largely on that benefit so they can recoup federal dollars and offset state costs," said Kimberley Fox, a senior policy analyst at Rutgers Center for State Health Policy.
Also in an effort to make enrollment smoother, North Carolina, Ohio and Rhode Island selected a "preferred" card from the stack of Medicare options and are making it easy for state drug program participants to sign up for that card.
While the Medicare cards pose an immediate challenge for state and federal health officials, there are more complicated hurdles coming down the pike.
"It's sort of early in the game and states are still trying to figure it all out," said Brendan Krause a senior policy analyst at the National Governors Association.
To help states determine what changes need to be made to their existing programs, the U.S. Department of Health and Human Services established the State Pharmaceutical Assistance Transition Commission (SPATC), which is made up of 24 state, federal and private sector officials.
The commission, which met for the first time July 7, will develop legislative and administrative proposals that aim to ease the transition for states and program beneficiaries. They're expected to deliver a report to Congress and the president in January 2005.
Fox of Rutgers said the discount cards have been a "good experience" for states prepping for what's to come in 2006. "Obviously states have to be thinking ahead a little bit more and most of them are going to have to put things forward in the next legislative session to modify their existing statutes," she said.
Policy analysts expect an uptick in legislative activity relating to the Medicare law in 2005, but several have already started considering ways to modify their existing programs or fill in any coverage gaps left by the federal program.
Data released July 22 by the National Conference of State Legislatures found 24 state legislatures considered more than 60 bills to adjust or amend their existing state pharmacy assistance programs in 2004.
Twelve states Alaska, Connecticut, Hawaii, Indiana, Maine, Massachusetts, New York, Rhode Island, South Dakota, Vermont, Virginia and Wyoming enacted laws that range from creating an interim prescription drug cash-assistance program in Alaska to the establishment of a legislative committee in Rhode Island charged with meshing the state and the federal drug assistance programs together.
Several states are concerned that that the federal benefit in 2006 is not going to be as generous as what the state currently provides, said John Luhers, a policy expert at AARP. He said going forward states want to make sure residents are no worse off if they sign up for Medicare than they would be under the state program.
"It's already complex and it's not even 2005, much less 2006," Luhers said. "To try and sort this stuff out is going to take awhile."