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CU testimony on the medicare drug discount card program

Summary: Consumers Union Testimony on Discount Drug Cards
Consumers of all ages are in dire need of relief from the high cost of prescription drugs. The discount drug card program that is about to begin may offer modest relief to some low-income Medicare beneficiaries, but Congress needs to do much more to provide meaningful discounts for Medicare beneficiaries and relief for non-beneficiaries as well. Ten of Consumers Union’s concerns about the program are outlined below.
1.Seniors and the disabled will be confused about how to choose – and whether to choose – a discount drug card.
2. One of the lessons from the medigap market in the 1970’s and 1980’s is that complicated choices in the health insurance marketplace can result in fraudulent schemes that victimize a vulnerable population.
3. Congress must provide resources and make a commitment to help consumers sort out the confusion. The need for this is demonstrated by the fact that even the federal government is providing “guidance” that could lead to some beneficiaries enrolling in programs that do not offer the most savings for them.
4. The Centers for Medicare and Medicaid Services (CMS) must be vigilant in curbing marketplace behavior that complicates the market and creates financial burdens for beneficiaries who choose the “wrong” discount drug card.
5. The CMS should aggressively expand the role of generics in the marketplace, and police against discount drug cards that steer beneficiaries toward brand name drugs.
6. The CMS should compare the discounts available from all discount drug cards with a standard drug-pricing basis such as the federal supply schedule to help consumers compare cards.
7. The CMS and Congress should pay particular attention to the use of formularies (drug lists) by the discount drug cards.
8. The CMS and Congress should apply additional lessons (e.g., the reliance on evidence-based, scientific findings; changing coverage, changing prices; harm due to consumer lock-in) to refine and improve the Medicare prescription drug benefit scheduled to begin in 2006.
9. The government should aggressively reach out to all those eligible for the $600 subsidy to assure that all who are eligible receive the subsidy, when that’s the best deal for them.
10. In light of the fact that high prescription drug prices are denying millions of Americans access to needed prescription drugs and contributing significantly to the high cost of health insurance, Congress should take steps to lower prescription drug prices for all, including those not eligible for Medicare.
Click here for the full testimony.