Marketing Convenience

Walgreen also plans to process claims. It is working with Wellcare Health Plans Inc. and United Health Group's Ovations unit . But unlike CVS, Walgreen bears no risk, said Michael Polzin, the company's spokesman. Both companies are marketing other insurers' plans in their stores.

"It doesn't matter to our pharmacy which program these seniors are signed up with," Polzin said. "But if they happen to be a Wellcare patient, not only will the pharmacy earn the usual money for filling the prescription, but we will earn money for processing that transaction as well.''

Another advantages to the Medicare drug benefit has these retailers salivating: Neutralizing Wal-Mart, the discount giant.

Currently, many seniors without prescription coverage go to Wal-Mart because they believe it offers the lowest prices. But under the new Medicare program, when those uninsured seniors sign up for a plan with Aetna, for instance, they will pay the same amount -- whatever the plan requires -- at a Wal-Mart, Walgreen, or CVS.

"Wal-Mart wins on price and drugstore chains like CVS win on convenience," said Eric Bosshard, an analyst with FTN Midwest Research. "When price doesn't matter, CVS and the others hope customers will leave Wal-Mart."

Art Alderson, vice president of pharmacy at Wal-Mart, said that will not happen. Under the minimum requirements Congress set for the drug plans, consumers must pay the first $250 of their prescription purchases and 25 percent of the next $2,250 in drug costs.

"That money will go further in Wal-Mart than any other pharmacy" because of the chain's low prices, he said. Though Wal-Mart accepts various plans, it has a co-branded card with Humana, which offers the lowest available insurance premiums of any of the drug plans, he said.

Besides, he said, value is not just price. It's about one-stop shopping for everything from drugs to diapers.

"We will gain more pharmacy customers," Alderson said. Wal-Mart does not make public how much of its sales come from prescription drugs.

But these drug plans are not a sure thing for retailers. For one, there is no telling what the acceptance rate will be for these plans. About 43 percent of seniors say they do not know if they will enroll next year and another 37 percent say they will not, the Kaiser-Harvard poll said. Some have better benefits from their former employers.

Also, those who do not have prescription coverage currently pay the highest prices for drugs because they do not have an insurer negotiating prices on their behalf, said Paul Ginsburg, president of the Center for Studying Health System Change.

"You're taking a population that paid the highest prices and now they will benefit from the purchasing power of the insurer," Ginsburg said. The retailers "will get lower payments for each prescription filled but they will presumably fill more prescriptions."

The challenge for retailers will be striking a balance so that the arrangement does not eat into profit margins.

Albert Johnston, of Severna Park, is trying to strike his own balance. This week, he visited Medicare's Web site and used a tool that compares drug prices at various pharmacies. Now he's trying to decide: Is price more important than convenience? Should he stick with his longtime pharmacist or go to the nearest Walgreens 10 miles away?

"That's 20 miles times 40 cents a mile," said Johnston, 82. "That price is part of the prescription. That's the way it gets credited in my book."