Too many choices?
The new discount drug cards come in dizzying variety, like many things these days -- from cell phone plans to Oreo cookies. The smorgasbord of options can empower consumers, or overwhelm them.
But Stephen W. Schondelmeyer spent 45 minutes trolling a Medicare Web site to determine which of 73 card offers might work best for his mom, then was amazed when he hit the print button on his computer.
University of Minnesota. "I didn't have any idea about what I could do with 289 pages."
Designed to help seniors combat the rising cost of drugs, Medicare drug cards have instead been criticized as the latest contributor to "consumer overload."
From retirement investment options to phone plans, from energy providers to Oreo cookie varieties, consumers have never been greeted by more choices.
One author on the topic found twice as many vehicle models today compared with the early 1970s, five times as many varieties of milk and nearly 60 times as many styles of running shoes.
The reasons for the multiplicity of options are, well, many: deregulation, government actions, new technologies, a shift from public to private sector providers that began under President Ronald Reagan.
Having many options can be liberating and empowering, but also bewildering. Sometimes, consumers simply freeze in the face of a free market's freedoms.
For instance, cell phone users didn't switch carriers as liberally as predicted after the advent last year of "portability," the ability to transfer a phone number between companies.
And a Columbia University study found that the rate of employee participation in 401(k) retirement savings plans dropped as the number of investment choices multiplied. Workers were so befuddled they were willing to forfeit an employer's matching funds, according to a study by Sheena Iyengar, a professor of psychology and management at Columbia.
"People feel overwhelmed," said Emily Pasterick, a representative from Computer Sciences Corp., one of dozens of companies that offer drug discount cards.
She sat at a table in the Sandtown-Winchester Senior Center in West Baltimore one morning early this month at a forum on the cards attended by about 60 seniors. Pasterick came armed with pamphlets, price lists and a dish of candy. But few of the seniors approached to ask questions, and none filled out enrollment forms.
"They just want to take one of everything and take it home and look at it," she said.
"They explained it pretty well, but it's all jumbling together," said Maybelle Brown, of West Baltimore, after listening to experts from the state, city and AARP.
Across the country, seniors haven't been rushing to sign up for the cards, which promise some relief from the high cost of medications. The Pharmaceutical Care Management Association, an industry trade group, estimates that the cards save an average 17 percent off retail prices on brand-name drugs and 35 percent on generics.
Of 41 million Americans covered by Medicare, many have retiree, veteran or other drug benefits, but the government estimates that 15 million seniors could benefit from the new cards. With signups beginning in May, only 1.2 million seniors had enrolled themselves as of last week, according to the Center for Medicare and Medicaid Services, the federal agency that runs the program. Another 2.4 million were enrolled automatically because they're already in Medicare HMOs.
The cards were created as part of a sweeping Medicare reform law passed early this year, and will disappear in 2006, when Medicare begins to offer a prescription benefit. Designed to help with drug costs over the next year and a half, the cards are offered by insurers and others who are able to get discounts through bulk purchases.
Each card offers different discount rates on different drugs, and each has a different list of participating pharmacies who have agreed to honor it. Prices, listed drugs and participating pharmacies can change, so seniors have a hard time deciding which card will offer the best deal for their medicines.