The state's PACE program expects a financial windfall of up to $150 million over the next two years from Medicare's new discount drug card program.

The discount cards, which go on sale a week from today, were one of the provisions of the massive Medicare prescription drug bill passed by Congress last year.

	Tomorrow in print See the Your Health section in tomorrow's print editions of the Pittsburgh Post-Gazette for a full report on the pros and cons of the new Medicare discount drug cards.

The cards provide percentage discounts on the price of some medications, but an additional feature that stands to benefit the state's PACE drug benefit program is a $600 credit to help low-income cardholders buy medicine. Individuals who make less than $12,569 per year, and couples that make less than $16,862, are eligible for the credit.

A decision announced April 17 by the federal government allows the PACE program to automatically enroll about 150,000 recipients who qualify for the credits in a discount card sponsored by PACE. That means the first $600 in drug costs incurred by the recipients will be covered by the federal credits, rather than the PACE program, which is funded by lottery revenue.

The savings will allow PACE to waive some $6 copays the low-income recipients otherwise would have had to pay to the state program.

"We will save about $150 million between June 2004 and March 31, 2006, on spending of $1 billion," said Tom Snedden, director of the Pharmaceutical Assistance Contract with the Elderly. "That's not bad."

The discount card program was created by the Medicare Prescription Drug, Improvement and Modernization Act of 2003, which will create a Medicare drug benefit by 2006. The discount cards are meant to provide help in the meantime, especially for the approximately 10 million Medicare beneficiaries who have no drug coverage.

A study published this month in Health Affairs estimated that the cards would provide modest savings -- an average of 17.4 percent over current retail prices -- for people who currently lack coverage.

In Pennsylvania, 17 companies will offer discount cards that will provide savings through the end of the year. Between Nov. 15 and Dec. 31, Medicare beneficiaries will have an option to either renew their cards or select a card from a different company for discounts during 2005.

Cards are free to low-income Medicare beneficiaries, but higher-income people can be charged up to $30 per year for a card. Comparative information about cards will be posted Thursday at www.Medicare.gov and the discounts begin in June.

One of the companies offering a card in Pennsylvania is First Health Services Corp., a for-profit company that does administrative work for the PACE program. The card being issued by First Health Services will carry the PACE name, and cardholders won't have to pay for it.

Low-income PACE beneficiaries can opt out of this PACE-sponsored discount card, but Snedden of PACE said he expected few would do so. Low-income seniors who tap their $600 credits with other cards would have to make small copays, Snedden said.

AARP supported the government's decision to let state programs automatically enroll recipients in card programs, said Desiree Petrus, an advocacy director with Pennsylvania AARP. The organization recommends that all seniors do their homework before choosing a discount card, but she said the PACE card seems to have a competitive advantage for low-income people.

"I would say, generally, this is probably the best [option], but everyone is different and everyone will have to look at this individually," Petrus said.