NCPA - National Center for Policy Analysis


June 16, 2004

The Medicare drug card provides discounts on drug purchases for seniors not covered by other prescription plans, as well as a cash subsidy for low-income enrollees. It will be replaced in 2006 with a full Medicare prescription drug benefit program.

Researchers at the Heritage Foundation believe the temporary drug card program should be made permanent and the benefit strengthened. Among their suggestions:

  • Make the plan permanent, instead of the use-it-or-lose-it benefit structure under current Medicare; seniors could then roll over unspent balances in their $600 account from year to year, giving them the opportunity to conserve resources for the future.
  • The subsidy could be increased above the current $600 limit and could be extended to middle-income seniors who are not currently eligible for any subsidy in the discount card program.
  • The funded drug card also could be coupled with private catastrophic drug insurance to make sure that seniors are protected against large drug expenses -- something the temporary program lacks.
  • Seniors who prefer a funded drug card should be able to have it as an integral part of their overall health plan; Congress should bring drug and medical benefits into the same plan.

Involving consumers in their own health care spending decisions will be the next revolution in health care reform in the United States. By structuring the drug benefit so that consumers direct their own spending, Congress could, for once, keep Medicare abreast of the times and give seniors the power and resources to shape the pharmaceutical marketplace around their needs, both today and in the future, says Heritage.

Source: Grade-Marie Turner and Joseph R. Antos, "Fixing the New Medicare Law #3: How to Build on the Drug Discount Card," Backgrounder No. 1752, Heritage Foundation, April 26, 2004.


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