RETAILERS: MEDICARE CARD SIGN-UPS PICK UP AFTER SLOW START 2004-06-21 (1)

AMANDA WEEKES

While sources across the country said the Medicare prescription discount program got off to a slow start last month, retailers told SN sign-ups picked up as word got out that the benefits outweigh the drawbacks.

"The very first week was much lower than expected," said Charlene Curry, spokeswoman for H.E. Butt Grocery Co., San Antonio. H-E-B offers customers a co-branded card with ScriptSave, Tucson, Ariz. "I think there have been a lot of issues around the media really painting a picture that is simply not true."

There are more than 40 million Medicare recipients, and 7.3 million were expected to sign up for a drug card program, according to Bill Pierce, deputy assistant secretary for public affairs/media for the Centers for Medicare and Medicaid services. Estimates say that current sign-up totals are halfway to that goal, according to Pierce.

"There is no time frame put on meeting the 7.3 million mark. We think this is going relatively well, given that it's a brand new program," Pierce said.

Media reports this month said 2.8 million people in the federal health program for the elderly and disabled have cards, along with thousands who have been automatically enrolled by state drug-assistance programs. As of that report, only 500,000 people had actually signed up on their own.

To deal with consumers' hesitation, retailers are increasing their marketing efforts. H-E-B has been running television and newspaper advertisements to promote the program and the benefits of using its card. Safeway, Pleasanton, Calif., also has a co-branded card with ScriptSave.

Walgreens, Deerfield, Ill., has its own Medicare-approved card as part of its Walgreens Health Initiatives program, and set up an 800 number at the corporate office to answer questions.

Giant Eagle, Pittsburgh, scheduled store events, titled "Understanding the Benefits of the New Medicare Discount Card," to answer questions in locations with the largest senior populations and heavily advertised them. Giant Eagle does not recommend one card over another.

"We hope to eliminate any confusion by providing free consultation on the many benefits associated with each card program and assistance in selecting the program that best meets each customer's unique medication needs," said Brian Frey, spokesman, Giant Eagle.

H-E-B credited marketing efforts, in-store education and brand equity as the reasons it represents 10% of the total sign-up volume for the country. "We're thrilled with the results. I've seen most retailers just simply giving applications out at the counter, and offering no assistance or help," said Curry. "I think that's because there was just no education [at] the store level." In-store training for employees was also offered at Walgreens and Giant Eagle.

Though the level of interest was minimal at the beginning of May, retailers have recently received higher volumes of applications. "Toward the end of the month, inquiries increased dramatically and applications for our card began pouring in," said Carol Hively, spokeswoman for Walgreens. Early in June, Walgreens reported that "tens of thousands" had signed up.

"It was our impression that people were taking their time and carefully gathering information about the various cards before applying," Hively said.

According to retailers, there are three types of customers that will be impacted by the marketing efforts: The first group signed on with the program immediately; the second doesn't need assistance from the program, and thus won't sign on; the third is undecided. Convincing the undecided customers to sign up will be challenging, said Curry.

"They think somehow by signing up for this program that it's going to take away from some of their benefits, or that somehow they are going to get monthly charges. There's so much confusion out there," said Curry.

Unclear information about the numerous cards and how to get the biggest discount from the program have been cited as major reasons for the slow participation.

"Customers are looking for clarity, and they are asking their card carriers and their pharmacists," said Danette Thompson, spokeswoman for Wal-Mart Stores, Bentonville, Ark. "A lot of customers are really waiting to see how it all unfolds."

Retailers also reported that customers have been hesitant about the program due to various reports from groups like the AARP and the Democrats stating the program doesn't give enough of a benefit to consumers, and that cheaper drugs are still available in Canada and on the Internet.

"What the media has done has been unfortunate because the people that need the most help are really being discouraged from finding out about it," said Curry.

In the future, retailers see the program growing and gaining participants, as long as the discounts continue to benefit the consumers. "As more seniors learn about the program through family members and friends, we expect enrollments to gain even more momentum in the weeks and months ahead," said Greg Wasson, president of Walgreens Health Initiatives.

If manufacturers and card providers continue to pass on discounts to the participants, Curry agreed that customers will eventually see the value in a discount card.

"I think the program is going to gain momentum. If the prices continue at the rates they are, and continue to be as competitive in the market and offer as much value, I think it's very much set up for success. People will eventually sign up, once the word gets out that it really is truly a good thing," she said.