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Trump pledges to send $200 drug discount cards to Medicare recipients weeks before election; funding source unclear

President Trump announced the plan Thursday but offered few details on how the cost of the initiative would be covered.
President Trump announced the plan Thursday but offered few details on how the cost of the initiative would be covered. (Tom Brenner/Reuters)

President Trump unexpectedly announced Thursday that his administration will send $200 discount cards to 33 million older Americans to help them defray the cost of prescription drugs — appealing to a significant voting constituency weeks before the November elections.

The president tucked the announcement into a speech that he portrayed as his health-care vision, without including specifics about how the government would pay for it or which of the nation’s Medicare recipients would receive it. White House officials said the price tag, about $7 billion, could be paid for through an experimental program to lower Medicare drug prices that remains merely a proposal.

The idea of a drug card was not mentioned in a briefing for journalists detailing highlights of the president’s planned remarks about two hours before his speech to an audience of health professionals and supporters in Charlotte.

One White House official, speaking on the condition of anonymity to be candid, said the idea of a drug discount card was a “last-minute thing that is still being worked out” and originated in the office of White House Chief of Staff Mark Meadows.

The president sought to draw attention to his health-care policies — and castigated those of his Democratic challenger, Joe Biden, as a “socialist nightmare” — as polls have consistently shown that health care is a dominant issue on voters’ minds in the Nov. 3 elections. Older Americans tend to vote in large numbers, and they perennially place a priority on health care. Drug costs, in particular, have been a leading concern in recent years.

The coronavirus pandemic has ratcheted up the salience of access to insurance and affordable care as shutdowns to protect people from infection have caused millions of Americans to lose jobs and the health benefits their employers provided.

A White House spokesman said the drug discount cards Trump mentioned could be used to offset co-pays for the medicines of people receiving the cards.

The spokesman also said funding for the cards would come from savings from a program the administration has proposed. That experimental program would tie the price of some drugs covered by Medicare to the lower prices available in several other countries where those governments have power to negotiate prices with pharmaceutical companies.

The president signed an executive order this month for such an experiment in the part of Medicare that covers drugs administered in a doctor’s office. He also signed a similar order that would apply the policy to Medicare’s much larger Part D program, which covers prescription drugs taken at home.

But the orders have not made it through the regulatory process and are unlikely to take effect before the Nov. 3 election, experts said. Details of how they would work and be implemented also remain unclear, because the executive orders did not contain significant detail. They are also certain to be challenged in court by the pharmaceutical industry, which has tried to beat back the proposal.

For that reason, the savings that the White House says would cover the expense of the discount cards do not exist, and it remains unclear whether they will in the future.

Medicare is the federal insurance program for Americans who are age 65 and older or disabled. It has existed since the mid-1960s and consistently been highly popular, although its financial underpinnings are fragile.

Asked for more information about the plan, representatives of the Department of Health and Human Services referred questions to the White House.

In his remarks, Trump called the discount cards a “historic provision to benefit our great seniors.” He said 33 million people on Medicare “will soon receive a card in the mail containing $200 that they can use to help pay for prescription drugs. Nobody’s seen this before.”

“These cards are incredible,” he said, adding that they “will be mailed out in coming weeks.”

In referring to 33 million people, it is unclear which Medicare beneficiaries the president has in mind. As of two years ago, 43 million people — about three-fourths of everyone on Medicare — had drug benefits, 10 million more than the president cited.

The drug manufacturers’ main trade group, PhRMA, said it did not have information about the cards the White House has in mind. A spokesman, who spoke on the condition of anonymity to be candid, reiterated the industry’s position that “one-time savings cards will neither provide lasting help, nor advance the fundamental reforms necessary to help seniors better afford their medicines.”