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Medicare picks firms for discount drug cards

From Brad Wright
CNN Washington Bureau


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WASHINGTON (CNN) -- Americans eligible for Medicare may soon get discounts on their prescription drugs, according to the U.S. Department of Health and Human Services.

The department said Thursday that 28 private health-care insurance companies have been authorized to offer drug discounts to Medicare-eligible Americans.

Those eligible will be able to sign up with the company of their choice sometime this spring, and they should be offered discounts of 10 percent to 25 percent off the regular cash price of the prescription drugs.

Health and Human Services Secretary Tommy Thompson said the prices on medicines from all 209 categories of prescription drugs were likely to come down.

With senior citizens comparing costs, companies will competitively lower their prices, Thompson said. Prices offered by each program will be made public to encourage competition. He also said it was possible that companies might be considering waiving program enrollment fees as inducements.

The new benefit includes a $600 credit for prescription drugs this year and in 2005 for single people with incomes less than $12,569 and for couples with less than $16,862.

The drug discount program is a temporary measure until 2006, when the Medicare Modernization Act takes full effect.

The Centers for Medicare and Medicaid Services estimates that some 7.3 million people covered by Medicare will enroll in the drug discount program, saving between $1.4 billion and $1.8 billion. Of the 7.3 million expected to enroll, about 4.7 million people will qualify for the $600 credit, said the centers, a federal agency within the Department of Health and Human Services.

People who receive outpatient drug benefits through Medicaid or other programs will not be eligible for the discounts.

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