Part D Ends Discount Card

July 10, 2006
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GRAND RAPIDS — Something that almost every senior has lived with for a while is the rising cost of prescription drugs. But for many retirees the outlay for those medications has likely become a bit more affordable.

According to the U.S. Department of Health and Human Services, more than 38 million Medicare recipients now have prescription drug coverage. Nearly 10.5 million have stand-alone plans, while 6 million more have prescription coverage under a Medicare Advantage plan that combines the Part B supplemental health insurance with the Part D drug coverage.

In addition, almost 7 million are enrolled in the Medicare retiree subsidy program and 6 million automatically received prescription coverage under Medicare and Medicaid.

And the cost to seniors for the plans has turned out to be less expensive than what was expected.

The Centers for Medicare and Medicaid Services reported last month that the average monthly premium for drug coverage was $24, or $8 a month less than what was projected prior to the opening of the Part D registration period in November.

HHS said more than 1.1 million seniors in Michigan enrolled in some form of a Medicare plan, placing the state eighth in sign-ups nationwide. More than a third of those opted for a stand-alone plan, while 42 percent qualified for the retiree drug subsidy program.

While area seniors may feel that they now have more options to buy prescriptions at a discount, they really have at least one less. Kent Health Plan has stopped offering its Senior Discount Prescription Program because of Part D.

The plan was free to county residents aged 65 and older and offered savings from 10 percent to 50 percent, with the average discount running at 20 percent. More than 9,000 seniors signed up for the card, which was honored at pharmacies throughout the county.

Kent Health Plan, a nonprofit agency, decided to end the program last March, about six weeks before the Part D registration period deadline. Kent Health Plan President Lynda Zeller, though, doesn't want anyone to shed any tears because the program is gone.

"We felt really good about it, because before, people only received a discount between 10 percent and 50 percent on medications, and now they may even be in a premium-free program and only paying co-pays," she said.

But Zeller added that ending the program wasn't the easiest thing to do.

"We did really struggle with the decision though. We really struggled. We got a lot of opinions from a lot of really smart people," she said.

At first the thought was to continue offering the program in case someone needed a drug that wasn't covered under their plan's formulary, or they were stuck in the Part D "doughnut hole," where annual purchases from $2,201 to $3,600 aren't covered. Having the card intact would at least give those seniors a discount on a full-price purchase.

But Zeller learned that if seniors used the card during the doughnut phase, it would take them longer to get out of it and back into Part D coverage, because Part D would only credit them for the discount price they paid, rather than the full cost of the prescription. So in the long run, they could end up spending more with the discount card to re-enter their coverage range.

"It could have actually harmed people," she said.

Zeller said another reason why the program was discontinued is that since its inception other discount cards have surfaced and those, too, are widely accepted at area pharmacies.

Also, Kent Health Plan still offers its medication assistance program for seniors who are not covered by Medicare and other residents without prescription coverage. That program offers 435 medications for a $5 or $10 co-pay to an individual with annual income below $19,140 and to couples who earn under $25,660 a year.

The late Chuck Zech, former president of Blue Cross Blue Shield of West Michigan and founder of Kent Health Plan, started the drug discount plan in September 2001. Following passage of the Part D legislation, Zech told the Business Journal in December 2003 that he hoped the Medicare plan would be enough of a benefit to all seniors in the county that he could retire his prescription discount program.

"Frankly, the best outcome would be if the Medicare program was so excellent that it obviated the need for the Senior Discount Prescription Program and could be eliminated," he said then.

"Our sole interest is to help improve access to health care, and if the Medicare program were to do that in the way of drugs for seniors, our mission would be accomplished."    

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