NCPA - National Center for Policy Analysis


August 18, 2004

The new Medicare-approved drug discount cards could save the average American beneficiary 20 percent off the retail prescription cost, a savings of $775 over 18 months, says a new study by the Healthcare Leadership Council, an organization that represents executives of drug companies, buyers, hospitals and related groups.

According to the study:

  • The savings would be even greater for low-income beneficiaries -- 47 percent, or about $1,550 by 2006 when the card program ends -- because of a $600 annual credit toward drug purchases.
  • The findings appear to be in line with earlier estimates by Medicare that recipients would save 10 to 25 percent.
  • The cards, sold by private companies for up to $30 a year, are intended as an interim step to help seniors pay for drugs until a Medicare Part D voluntary drug benefit takes effect in 2006.
  • By then, the cards could save beneficiaries a total of $7.7 billion if Medicare enrolls the 7.3 million beneficiaries it projects; so far, about 4 million people have enrolled, including 1 million of the 7 million who qualify for the $600 credit.

Medicare covers about 41 million people, but most have drug coverage through insurance, former employers or other government programs.

Source: Warren Wolfe, "Medicare: RX Card Savings match Official Estimates, Study Finds." Minneapolis Star-Tribune, August 14, 2004; based on Lewin Group "Assessment of Beneficiary Savings in the Medicare Drug Discount Card Program," Healthcare Leadership Council, August 12, 2004.


Browse more articles on Health Issues