Medicare Compliance & Reimbursement

Democrats wonder if seniors are confused by multiple card options.

At a June 8 Senate Finance Committee hearing, several Democratic senators expressed concern that seniors were finding it difficult to choose among the dozens of Medicare-approved discount cards available. Centers for Medicare and Medicaid Services Administrator Mark McClellan responded that the cards offered substantial discounts for seniors and that his agency could cut through the confusion for seniors.

With over 70 approved cards, choosing "which one's the best, which one's the most appropriate, which one's the most cost-efficient is a very difficult challenge for an average senior," said Sen. John Breaux (D-LA), one of the law's chief architects. Breaux said he wished that the government had come up with a single "universal Medicare drug card that would have been very easy to understand."

The Louisianan noted that "Choices are important, and this is about giving [beneficiaries] more choices, but I'm just a little concerned that we have too many choices, which makes it more difficult to pick the one that's correct."

In a written statement, senior Finance Democrat Max Baucus (MT), another leading architect of the Medicare law, cited several problems with the discount card program, such as problems with the Medicare price-compare Web site, long wait times for beneficiaries calling the 1-800-MEDICARE phone number, and lagging enrollment: Over three million Medicare beneficiaries are signed up for the cards, but all but about half-a-million of them are Medicare Advantage beneficiaries who have been automatically enrolled in cards sponsored by their plans.

"In my view, the main problem fl and the root cause of many other problems -- is that there are simply too many drug card options," Baucus said. "I believe in choice," he went on, "But I believe in meaningful choice -- not choice for the sake of ideology. This drug card has elevated the ideology of choice over the best interests of Medicare beneficiaries." Noting that beneficiaries must look at factors such as the pharmacies participating in each card, differing enrollment fees, and what drugs are available at what prices through each card, he argued, "Most in this room could not sort through so many options on so many different dimensions and feel good about the choice they make."

North Dakotan Kent Conrad, a Democrat who voted for the MMA, said he was introducing legislation that would require the Secretary of Health and Human Services to reduce the number of approved Medicare prescription drug discount cards to three per region beginning in 2005.

Baucus quoted Swarthmore University psychologist Barry Schwartz: "Increased choice can lead to a decrease in satisfaction ... too many options can lead to paralysis, not liberation." And Breaux said that some seniors "are scared of having to make the decision, so they back away and say 'I'm not going to do anything.'"

"We certainly don't want that to happen, because there are real savings in this program for many beneficiaries who are paying high prices today," McClellan told Breaux. The administrator cited a CMS study showing that seniors and disabled Medicare beneficiaries could use the cards to get savings on generic drugs of between 39 and 65 percent off the average price paid for generics by all Americans, including those with pharmaceutical insurance and those without such coverage. Seeking to rebut charges that drug companies have raised their prices at accelerated rates in anticipation of the drug card, essentially negating the discounts available, McClellan also said that prices available through the cards were "always substantially lower, anywhere from 9 to 30 percent lower, than the list prices that the beneficiaries were paying a year and a half ago," at the beginning of 2003.

"I can understand how people focus on all the different choices that are out there," McClellan said, "But it doesn't have to be confusing. Especially with some of the improvements we've made in our 1-800 number and on our Web site, people can focus in just on the one or two that are best for their own needs. What we need them to tell us is what medicines they're on and what particular pharmacies they want to use and we will get them a card that covers their drugs the best and that allows them to get their medicines in the way they prefer."