By Julie Rovner

WASHINGTON (Reuters Health) Mar 09 - The acting head of the federal Medicare program told a U.S. Senate Committee Tuesday he is confident the first major element of last year's sweeping Medicare law, Medicare-endorsed "drug discount cards," will be available on schedule June 1 and that they will save significant amounts of money for many of the program's 41 million elderly and disabled beneficiaries.

"While not a drug benefit, the voluntary drug card program is an important first step in providing Medicare beneficiaries with the tools they need to better afford the cost of prescription drugs," Dennis Smith told the Senate Special Committee on Aging.

Smith said that competition between sponsors of the cards, along with a Medicare Web site that will publish actual drug prices available under each card beginning in late April, should help keep prices in check. The combination, he said, "will be a very powerful incentive to lower the price of prescription drugs."

Smith also said that while the administration is already following up on reports that some fraudulent cards are already being offered to seniors, he is not worried that the real cards, which will begin signing up beneficiaries in May, will play what Aging Committee Chairman Larry Craig, R-Idaho, called "bait and switch" with seniors, by signing them up and then reducing the discounts.

Most of the 100 firms that have applied to offer discount cards also intend to offer broader Medicare drug coverage plans starting in 2006, said Smith. "They're positioning themselves for the future," he said, so "they have every incentive to make sure they are dealing straight with the senior."

Other witnesses at the hearing, however, said they are worried about confusion, which many public opinion polls have shown is widespread among Medicare beneficiaries.

"Pharmacists are very busy people," said Craig Fuller of the National Association of Chain Drug Stores. Pharmacies could easily be overwhelmed "if every [Medicare] patient comes in with multiple prescriptions and multiple cards" and demands help figuring out which card will gain the best price on each medication.

Fuller said he is also concerned that beneficiaries are anticipating that the cards will save more than the 10% to 25% discounts that are expected. "Some of the expectations are that this is a coverage program with a $10 copay and it's not that," he said.

Others said they are most concerned with finding the low-income beneficiaries who are eligible for special $600 subsidies. Currently, only about 43% of those eligible for existing help with their Medicare-related bills are signed up for such programs, said Jim Firman of the National Council on Aging (NCOA). "We must do better," he said.

The NCOA, along with other senior groups, including the AARP, as well as state and local senior counseling programs, is organizing the Access to Benefits Coalition, "dedicated to ensuring that low-income beneficiaries know about and can make optimal use of new Medicare prescription drug benefits and other available resources for saving money on prescription drugs," Firman said.

But he acknowledged that it will be an uphill battle to reach even the goal of finding 65% of those eligible for the aid. "Even that has never been done before in the history of low-income benefits," he said.