News Release

Medicare Modernization Act Already Helping Millions in First Year

Drug Discount Card Providing Billions in Savings, New Preventive Benefits Begin

The Medicare Modernization Act turns one year old today, and already this landmark law is helping millions of seniors and people with disabilities get significant savings on prescription drugs, while millions of others are getting more out of their Medicare.

"I am proud of this Medicare law and what we have accomplished in just 12 short months," HHS Secretary Tommy G. Thompson said. "We have kept the promise to provide better benefits and more savings to America's seniors and people with disabilities since President Bush signed the new Medicare bill into law."

Secretary Thompson noted that nearly 6 million beneficiaries have signed up for the Medicare-approved drug discount card. In addition, these drug discount cards offer a $1,200 credit for low-income beneficiaries who sign up before Dec. 31, 2004, plus large additional "wraparound" discounts on more than 200 brand-name drugs. The new law provides new preventive benefits beginning in January -- including a "Welcome to Medicare" physical for new Medicare beneficiaries, and a comprehensive, voluntary drug benefit in 2006. The Medicare law also includes new programs to help beneficiaries better manage their health, through greater access to coordinated-care plans in Medicare Advantage and a new pilot program to prevent complications of chronic illnesses in fee-for-service Medicare.

"We've worked hard and we've formed new partnerships to help make sure that as many beneficiaries as possible take advantage of Medicare's new, voluntary benefits and services," said Centers for Medicare & Medicaid Services Administrator Mark B. McClellan, M.D., Ph.D. "As a result, we're helping more beneficiaries faster than ever -- over 1.7 million Medicare beneficiaries have enrolled in low-income assistance in the drug card in just six months. No previous voluntary HHS benefit program for low-income Americans has achieved such substantial enrollment in its first six months."

The Medicare-approved drug discount cards became available on June 1 and as of Dec. 1, more than 5.8 million beneficiaries are getting discounts of up to 21 percent below the average price paid by all Americans on name brand drugs. The cards cover virtually all of the top 100 drugs and typically over 80 percent of all prescription drugs. Recent surveys show that seniors who have signed up for the cards generally found the process straightforward, and those who have used the cards are overwhelmingly satisfied with the new drug savings they received.

The cards are now even easier to obtain. Beginning today, a new online enrollment center will help Medicare beneficiaries enroll in the discount card that best fits their individual needs at www.medicare.gov. Medicare beneficiaries can also enroll in the card of their choice by calling 1-800-MEDICARE. Completed enrollment forms are transmitted directly to the selected sponsor for prompt processing.

The Centers for Medicare & Medicaid Services (CMS) is working closely with DestinationRx, Inc. and community-based organizations such as AARP, the Access to Benefits Coalition, and faith-based groups to help low-income beneficiaries sign up for Medicare discount cards and get the most out of the program.

The discount cards deliver the largest benefit to beneficiaries with limited incomes. If they have not done so, those beneficiaries have until Dec. 31 to enroll in a drug discount card to get a $600 credit for 2004 and another $600 credit for 2005. Any unspent portion of the 2004 credit will be rolled over for use in 2005. At the same time, Medicare beneficiaries currently enrolled in a drug card who wish to change cards for 2005 can take advantage of the open enrollment period that began on Nov. 15th and continue to save on the prices of their drugs.

Dr. McClellan noted that the year-old law not only has helped millions of seniors and people with disabilities save billions of dollars in drug costs; it is also helping beneficiaries stay healthy. The law offers new screening benefits for heart disease and diabetes, as well as the "Welcome to Medicare" exam, to bring Medicare's preventive benefits up to date. It also has led to wider access to less costly, comprehensive Medicare Advantage health plans. Compared to fee-for-service Medicare, these plans save beneficiaries over $700 per year on average and generally offer more extensive preventive benefits and disease management benefits to prevent complications of chronic diseases.

"Today, some of the most important prevention for seniors involves preventing the costly, debilitating complications of chronic diseases like heart failure and diabetes," said Dr. McClellan. "And we are using the Medicare law to provide seniors who have chronic illnesses with the help they need to prevent the complications."

CMS today also announced the nine organizations that will participate in the Voluntary Chronic Care Improvement Program. This program is expected to reach about 150,000 to 300,000 beneficiaries enrolled in traditional fee-for-service Medicare and have multiple chronic conditions, including congestive heart failure, complex diabetes and chronic obstructive pulmonary disease.

Beneficiaries who agree to participate will receive help in managing their conditions, following their physicians' plan of care and ensuring that they know about, and can take advantage of, Medicare-covered benefits that will help to reduce their health risks. Similar strategies have been widely and successfully adopted in coordinated-care health plans, which will receive higher payments in 2005 under the Medicare law for caring for patients with chronic illnesses.

"There have been revolutionary improvements in Medicare and seniors should be confident that all of the new improvements are designed to help them, and their health care, move into the 21st century," Secretary Thompson said.

###

Note: All HHS press releases, fact sheets and other press materials are available at http://www.hhs.gov/news.

Last Revised: December 8, 2004