Everybody loves a discount. But the new Medicare prescription drug discount cards-which can be used by beneficiaries beginning June 1st-are finding little affection from seniors.

Since May 1st, Medicare beneficiaries have been able to sign up for cards from 77 sponsoring organizations. This enrollment process has been far from smooth. Over seven million callers have overloaded the Medicare hotline. The Medicare website, which compares drug prices for different cards at different pharmacies, still serves up incomplete and occasionally contradictory information. 

The media have rushed in to offer equally confusing and sometimes misleading advice. One major news website, for instance, headlined its story "Which Medicaid Card is Right for You?"-ignoring the fact that Medicare recipients who get assistance from Medicaid are ineligible for the discount cards. 

Anxious seniors, and concerned policymakers, should keep several things in perspective: 
. Medicare drug discount cards are not a benefit-they are a temporary, stopgap program that will be phased out in just eighteen months. 
. Lower-income seniors who aren't eligible for Medicaid will clearly gain from the program. Other Medicare beneficiaries may or may not be eligible, and may or may not see savings. 
. Card sponsors who offer drug discount cards may also decide to offer coverage under the full Medicare benefit, which will begin in 2006. But they may not choose to do so. If they do, retaining the card sponsor may not be the best option for beneficiaries. 

A little background. 

In November 2003, Congress passed the Medicare Modernization Act, which establishes a Medicare drug benefit beginning in 2006. The temporary discount cards, along with higher payments to private Medicare plans, are one of the first features of this bill to take effect. 

This timing reflected politics as well as technical concerns about implementing the drug benefit. In an election year, the Bush administration hoped to blunt seniors' concern about rising pharmaceutical costs, while avoiding the need to raise budget deficits in the short-term. Drug discount cards were the vehicle chosen to achieve that end. (As pressure for allowing drug re-importation rises, and studies showing rising drug prices get wide attention, this end looks increasingly elusive.) As a consequence, the administration has touted the cards, through heavy advertising and promotion, while Democrats have been at pains to point out their every conceivable flaw. 

Drug discount cards, in reality, are a modest subsidy program-neither a panacea for high costs nor a wholly cynical gambit. As a general rule, Medicare beneficiaries shouldn't believe the election year hype, or needlessly get caught in the political crossfire. Here's the bottom line: 

For low-income seniors who don't qualify for Medicaid (below $12,569 for individuals, or $16,862 for couples), the drug discount cards will be a boon-thanks to a $600 annual government subsidy toward the cost of drugs, plus no annual card fee. Moreover, pharmaceutical companies Merck, Pfizer, and Lilly will offer some medicines for free or nominal cost to these Medicare beneficiaries who exhaust their annual subsidy. This subsidy will also help out some fiscally-strapped states who will be able to reduce costs for their pharmaceutical assistance programs. The main problem here is that too few beneficiaries are aware of the low-income subsidy-fewer than one in five according to an April 2004 survey by the Kaiser Family Foundation. 

For all other beneficiaries, it's probably worth scouting out the discount cards, but not getting too preoccupied with the details. Beneficiaries with existing drug coverage-through an employer, supplemental insurance plan, or Medicaid-aren't eligible for the cards. 

If Medicare beneficiaries qualify, they may get a price break. The Lewin Group, a health consulting firm, estimates that Medicare discount cards will result in 20 percent savings, compared to the undiscounted retail price on the 150 drugs most commonly used by seniors. 

But these potential savings come with many strings attached. First, the discounts received through a Medicare-approved discount card may not be better than those that seniors can achieve through other means-such as buying drugs over the Internet or using a pharmacy card. Second, the cards will work only for specific drugs at particular pharmacies. If a senior uses multiple drugs-typical in the treatment of chronic illness-they may realize savings on one drug but not on others. 

Once seniors select a card, they won't be able to switch cards until the end of the year. In the interim, the sponsors can change the drugs covered, and the prices of these drugs. This potential for bait-and-switch tactics, which has attracted considerable attention, probably won't pose a problem in practice. Such tactics are likely to be well-publicized and to result in a black eye for the card sponsor. Nevertheless, seniors who might be affected by this practice will have little recourse beyond public exposure. 

In a scant eighteen months, a deeply flawed, full-scale prescription drug benefit presumably will be implemented. At this moment, the effects of the drug discount program will be of the most real concern. 

First, seniors are likely to figure out their best pattern of discounts just when the card program is phased out and the entirely different design of the full prescription drug benefit is phased in. Some seniors may gain experience comparing drug prices during the transition period, but it is just as likely that confusion and cynicism will ensue. 

Second, the discount card program is aimed as much at wooing sponsors as helping beneficiaries. For these private sponsors, who are footing most of the costs associated with the cards, this period is a trial run to understand the Medicare market and to decide whether to offer a drug-only insurance plan in 2006. The companies approved to offer the cards spent 35 million dollars lobbying in 2003. Making discount cards available may result in drug plans better tailored to the needs of beneficiaries. It may also produce a variety of cynical marketing practices or, conversely, decisions not to participate in the Medicare drug benefit. 

Finally, working out the kinks in a discount card program shouldn't distract government officials, drug manufacturers, and policy analysts from the main issue at hand: evaluating and implementing the drug benefit itself. Any number of questions loom: whether pharmacy benefit managers will be able to get true price breaks from drug manufacturers, and save taxpayer dollars; whether the benefit will encourage employers to drop retiree drug coverage, and by how much; and whether the drug spending will improve the health of seniors. If the uproar over Medicare discount cards distracts from this effort, we will all be much the worse off.