August 10, 2003
Drug Costs: Let’s Help Ourselves
By HOWARD S. WEITZMAN
SOMETIME soon, the House and the Senate may agree on a bill that will add prescription drug coverage to the federal Medicare program, which provides health insurance to 40 million elderly and disabled Americans, including more than 200,000 in Nassau County.
Adding such benefits to Medicare is an important step toward improving health care for all Americans.But regardless of the final form of the legislation that emerges from the Senate and House conference — if, indeed, anything emerges — two things are clear. First, there will be no new assistance for the uninsured, non-disabled population under 65, a group that includes more than 260,000 people in Nassau alone. Second, large gaps in prescription drug coverage for Medicare beneficiaries will remain, for which they will be financially responsible.
Even worse, the number of elderly citizens who will fall into these gaps is likely to increase sharply. The Congressional Budget Office has predicted that, if this legislation passes, about a third of employers will drop the private prescription drug coverage they currently offer their retirees.
Both the private and public sectors face ever-increasing health insurance costs, with prescription drugs responsible for the lion’s share of the increase. For Nassau, the cost of prescription drugs represents approximately 60 percent of the county’s annual bill for retirees’ health insurance, amounting to $34.6 million in 2002.
I have written to our legislators and the conferees in Washington to urge them to ensure that any new law adding drug benefits to Medicare reduce this crushing burden on Nassau County and other local governments by designating Medicare the primary insurer, paying out before state, local or private drug plans.
Some states and localities are beginning to take steps to address the high cost of these drugs to individuals, employers and local governments. New York State’s EPIC program pays about half the drug costs of seniors with incomes below $35,000 and couples below $50,000. But a bill that would have used the purchasing power of all New Yorkers to negotiate discounts with drug manufacturers and pharmacies died when the Assembly and Senate could not agree on its terms prior to the end of the legislative session.
But there’s no reason that we in Nassau County have to wait for federal or state action.Last week, my office announced a plan to provide a new Nassau County pharmacy discount card to all residents who want one. In light of Nassau County’s fiscal problems, the proposal is designed to have no budgetary impact on the county.
These discount cards, produced and distributed by private ”Pharmacy Benefit Managers,” typically offer a discount of anywhere from 5 to more than 50 percent, depending on whether the drug is brand-name or generic. The PBM’s have relationships with networks of pharmacies that offer discounts on drugs to cardholders in order to widen their customer base. While such cards are commercially available, creating a new county card could harness residents’ buying power to achieve greater bargaining power with local pharmacies. The selection of a PBM will be subject to a competitive process.
The idea is not without precedent. For example, in Michigan a coalition of more than 20 counties has been formed to offer an average prescription drug discount of 25 percent.
The discount card program will be made available, at little or no cost, to all Nassau residents regardless of age, income or existing coverage. Individuals without drug coverage will be able to show this card at their local participating pharmacies to receive the discount.
Although such a drug discount program is not a panacea for the problem of access to affordable prescription drugs for county residents, it is something concrete and feasible that we can do, here and now. We look forward to working closely with the county executive and the County Legislature to achieve this goal. Until the federal or state governments act to provide broader relief from high prescription drug costs, Nassau County is attempting to help our residents who lack adequate drug coverage cope with the skyrocketing costs of the medicines they need.
Howard S. Weitzman is the Nassau County comptroller.