Beware of Scams as Medicare Discount Drug Cards Become Available

It's not enough that seniors have to pay high prices for the drugs they need. Now comes a warning about scams that directly target seniors, and it makes me want to holler.

Beginning June 1, seniors and other Medicare beneficiaries may receive savings on their prescription medications using special government-approved discount drug cards, which can't be sold for more than $30. Low-income beneficiaries will receive an additional $600 credit to help pay for their prescription medicines this year and in 2005.

Using the drug discount card program as a hook, crooks are trying to pry personal information out of seniors to commit identity theft or credit card fraud. According to federal and state officials, Medicare beneficiaries could also be sold bogus discount cards or be persuaded that a certain drug card is approved by the government when it is not.

In a recent action, the Massachusetts attorney general's office issued a warning to seniors in the Bay State after receiving complaints about a company that sent solicitations crafted to look like an official government mailer that could make people believe the company was selling a Medicare-approved drug discount plan.

"Any time there is a new government program, unfortunately, there are those out there who will try to take advantage of people," said Mark McClellan, the administrator of the Centers for Medicare & Medicaid Services (CMS), a federal agency within the U.S. Department of Health and Human Services. CMS, along with the Office of Inspector General, recently issued a warning cautioning people to be careful if they are approached to buy a drug discount card.

Reported cases of possible fraud have come from Medicare beneficiaries around the country, McClellan said. Authorities are investigating cases in which people received calls as well as in-person solicitations from individuals attempting to gain personal information -- a Social Security number, credit card number or bank account information.

"We haven't seen large-scale fraud yet, but we've seen enough to make us want to make sure Medicare beneficiaries are protected," McClellan said.

The introduction of the discount drug program is part of a new Medicare law. A number of private companies -- including HMOs, insurance companies and pharmaceutical firms -- will be offering the Medicare-approved cards. How much people save will depend on which drugs they take, which pharmacy they use and the discount drug card they choose. That means it is going to be confusing just figuring out which discount card to get.

And confusion has always been the best tool con artists have with which to cheat people.

Just so you know, the prescription drug benefit goes into effect in two stages. The first step includes the issuance of discount cards, which can be used starting June 1. The discount drug card program is only temporary and will be phased out by Jan. 1, 2006. At that point, the cards will be replaced by a Medicare drug benefit.