Barbara B. Kennelly's Statement on the Medicare
Prescription Discount Card

The National Committee has more than 3 million members and supporters, some have joined us today for this press conference. Through their calls, letters and emails, our members provide us with a good snapshot of how our nation's senior population is reacting to the discount card, and the picture isn't pretty. But this is what we are telling them:

Despite the confusion surrounding the card, if you're over 65 and single with an income of less than $12,568, or married with an income of $16,862 , you have nothing to lose by signing up for a discount card, and you have a lot to gain. You'll get $600 to use toward your prescription drug expenses and you shouldn't let it go to waste.

For all other seniors, you still may get some value out of the cards, but it's more of a gamble. You'll have to be a careful shopper. There are numerous discount cards available, all covering different drugs with different discount amounts. Once you buy a card, you can't change cards until the end of the year, so take your time and think over your choices carefully. Unlike the permanent benefit, there's no penalty here for signing up late. But, make sure you're dealing with a Medicare approved sponsor.

And don't be blinded by big ads promising huge discounts on your purchases. The discounts will be based on Average Wholesale Prices, which very few people actually pay for their drugs. It's a lot like buying a car - most people don't pay the sticker price. How much is a big discount really worth if it's based on a fictitious drug price that few pay? The only real way you have of knowing whether you're saving any money is to look at what's left in your pocket.

The Medicare prescription drug benefit should be simple. It should use the purchasing power of America's 41 million seniors to help keep prices down. It needs to keep premiums and services consistent and uniform. The discount card is a good metaphor for the overall Medicare law. It's confusing, heavily slanted toward the drug companies and private health providers, and does little to control drug costs.

Instead of having one card covering all drugs and providing uniform discounts, seniors face a bewildering array of choices, all of which cover different drugs with different discounts. CMS is encouraging seniors to begin comparison shopping now, yet it hasn't even finished approving sponsors yet. Even if a senior does everything right, the drug companies have the right to change both the drugs covered and the discounts offered after seniors have bought the cards. I don't know of any other program that officially sanctions "bait and switch" like this one does .

And you should be skeptical about the Administration's assurances that they will monitor the discount card program to make sure seniors are getting a good deal. Despite their latest $18 million investment in commercial TV ads to increase consumer confidence in this card, there's no getting around the news reports about legal action brought against drug companies for overcharging seniors. These cases usually take years to develop. By the time CMS figures out a company has been cheating seniors, the discount program may have long been over.

I believe seniors should take a good, long look at this card , even if they're not interested in purchasing it because it represents your future . Unless we can reverse course, beginning in 2006 your entire Medicare program will look as confusing as these discount cards . And unlike with the discount cards, making the wrong choice when the permanent program begins could have devastating consequences for you and your families.

Thank you.

The National Committee is a nonprofit, nonpartisan organization that acts in the interests of its membership through advocacy, education, services, grassroots efforts and the leadership of the board of directors and professional staff. The work of the National Committee is directed toward developing a secure retirement for all Americans.