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Bridging the Gap
March 15, 2007 • Volume 7, Issue 11

Since its enactment in 2003, nearly every aspect of the Medicare Part D prescription drug benefit has been the subject of fierce partisan disagreement—with one exception. The Extra Help program, which covers the “doughnut hole,” or gap in Part D coverage, and reduces co-payments for lower income people with Medicare, has near universal support.

Unfortunately, the Extra Help program has not lived up to its promise. Less than half of those eligible for the program are currently enrolled. There are three main reasons for this failure:

• An asset test that excludes people with Medicare who have even modest savings;
• A complicated application that discourages potential enrollees;
• The difficulty in finding and contacting older adults and people with disabilities who may qualify, and getting them to apply.

Legislation introduced today by Representative Lloyd Doggett, Democrat of Texas, addresses all three problems.

First, the bill substantially raises the amount of savings and other financial assets that people with Medicare can have and still qualify for Extra Help. The asset test penalizes people with Medicare who have scrimped and saved during their working years in order to have a modicum of security when they can no longer work. Nearly half of the Extra Help applicants denied by Social Security in 2006 were rejected solely because their assets were above very low limits—just $11,500 for an individual and $23,000 for a couple.

The Prescription Coverage Now Act of 2007 would increase the asset limits to $27,500 for an individual and $55,000 for a couple, allowing individuals with low incomes—less than $15,315 a year for a single person—to qualify for Extra Help if they have a modest nest egg to cover years of retirement or disability. (Editor’s Note: The web version of this Asclepios has been changed to reflect the lower asset limits incorporated in the final version of the Prescription Coverage Now Act of 2007 introduced in the House.)

Second, the bill eliminates a number of questions in the application that have proved very difficult for applicants to answer and have unfairly excluded individuals who need the benefit. For example, people struggling to afford their medications will no longer be asked to calculate the cash value of their life insurance policies or estimate the monetary value of “in-kind support”—help with groceries or utilities or a place to live they receive from their children or other relatives.

Third, the bill requires the government to implement strategies to maximize enrollment in the program. Income and asset data already in the possession of the government will be used to automatically screen every person with Medicare to see if they qualify. As people become eligible for Medicare they will be able to opt in to the program by checking a box when they enroll in Part D and completing a one-page form.

The Prescription Coverage Now Act of 2007 has the potential to help millions of people with Medicare afford the medicines they need to stay alive and healthy. It bridges the partisan divide on Part D while helping older adults and people with disabilities of modest means get through the Part D coverage gap. This legislation deserves the support of every member of Congress. Please write your congressional representative and urge him or her to cosponsor the Prescription Coverage Now Act of 2007.

Medical Record

“My mother-in-law is 95 and destitute. She has no burial money, no life insurance, no pension—no money. The only income she has is her Social Security check of a little less then $1,000 per month. However, she has four people who donate money to help pay her assistive living room and board. This counts as ‘in-kind support’ and puts her over the income level so she doesn’t qualify for Extra Help” (Story submitted to the Part D Monitoring Project, Medicare Rights Center, November 2, 2006).

The National Council on Aging (NCOA)’s recommendations for legislative changes to Extra Help include:

• Eliminate the asset test because it is the single-most significant barrier to the Part D LIS [low-income subsidy, or Extra Help] for low-income seniors and people with disabilities.
• Do not require information about the cash surrender value of life insurance policies when determining LIS eligibility.
• Do not take the value of in-kind support and maintenance (ISM) into consideration when determining eligibility for the LIS.
• Require the Internal Revenue Service (IRS) to assist SSA with tax-filing data, providing SSA with the name of Medicare beneficiaries who are likely eligible for the LIS to better target outreach efforts, while recognizing privacy concerns.

(“The Next Steps: Strategies to Improve the Medicare Part D Low-Income Subsidy,” National Council on Aging, January 2007).

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Fast Relief: Part D Monitoring Project

The Medicare Rights Center (MRC) needs to hear about all the problems with the Medicare Part D benefit, whether they happen to you or someone in your community. With this information, we will be armed with the needed evidence to push for a Medicare-administered drug benefit.

Submit your story at www.medicarerights.org/partdstories.html

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The Louder Our Voice, the Stronger Our Message

Asclepios — named for the Greek and Roman god of medicine who, acclaimed for his healing abilities, was at one point the most worshipped god in Greece—is a weekly e-newsletter designed to keep you up-to-date with Medicare program and policy issues, and advance advocacy strategies to address them. Please help build awareness of key Medicare consumer issues by forwarding this action alert to your friends and encouraging them to subscribe today.

Please send all replies and subscription requests to mrcadvocacyupdate@medicarerights.org.

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