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The Help We Need
April 19, 2007 • Volume 7, Issue 16Recently, legislation was introduced in the House of Representatives to make it easier for low-income people with Medicare to qualify for and enroll in the Extra Help program, which helps pay for their Medicare prescription drug coverage. Senators Jeff Bingaman, Democrat of New Mexico, and Gordon Smith, Republican of Oregon, introduced a similar bill last week in the Senate.
Like the Prescription Coverage Now Act (H.R. 1536) proposed in the House, the Senate’s Part D Equity for Low-Income Seniors Act of 2007 (S. 1102) makes several key improvements to the Extra Help program. Currently, those with savings and other assets over $11,710 ($23,410 for couples) are ineligible for any assistance, no matter how low their income. Both bills end the current punishment of people who accumulated a meager nest egg in their lifetime, by raising the limit on financial assets to $27,500 for individuals and $55,000 for couples. This will enable millions more people with Medicare to qualify for reduced copayments, coverage through the doughnut hole and help paying premiums, without having to become destitute.
The bills will also help increase enrollment by simplifying the application process. They eliminate the requirement that applicants report the cash value of life insurance policies or estimate the value of in-kind support (help from family members for paying for groceries or other day-to-day expenses). The legislation also excludes 401(k)’s and other retirement accounts from the asset test; these retirement accounts are currently double-counted both as income and as assets.
If enacted, the House and Senate bills would go a long way toward ensuring that low-income older adults and people with disabilities have access to vital medicines.
They also demonstrate a bipartisan effort to spend taxpayer dollars efficiently and responsibly and deliver improved Medicare benefits to those who need them most. Every dollar spent under this legislation to expand Extra Help will go toward making medicine more affordable for people with Medicare.
Of course, Congress will have to pay for this important reform by finding savings in the budget. The first place lawmakers should look is the billions of public dollars that are wasted on overpayments to Medicare Advantage plans—private Medicare plans that cost 12 percent more than the cost of providing health care through Original Medicare.
The insurance companies offering these Medicare Advantage plans argue that the excess payments are necessary to provide better benefits to their members. These “better benefits” do not go to all people with Medicare. They do not go to the people in Medicare most in need. And all too often the promise of “better benefits” under Medicare Advantage proves false for those who fall victim to a costly illness. For every individual who joins a Medicare Advantage plan for “better benefits,” the insurance companies reap a windfall in government subsidies.
Only a Congress in the pocket of the insurance companies could devise such a scheme. Voters, however, gave us a new Congress last fall. This new Congress needs to find the fairest, most efficient way to deliver affordable health care to people with Medicare. Instead of funneling more money to insurance companies, Congress should expand access to the Extra Help program.
Please write and urge your senator to cosponsor the Part D Equity for Low-Income Seniors Act of 2007.
Medical Record
“I am 67. I worry about affording drugs that I may have to take later. My only income is Social Security, a little over $12,000 per year. I have more in savings than the allowed amount so I did not apply for Extra Help. I don't feel I should be penalized. I do what I can to stay healthy, but am very worried about becoming ill” (Story submitted to the Part D Monitoring Project, Medicare Rights Center, February 17, 2007).
“The Commission’s past recommendations about MA [Medicare Advantage] plans emphasize financial neutrality between payment rates in the FFS [traditional fee-for-service Medicare] program and the MA program. However, our analyses of MA payments and plan participation show that benchmarks and program payments in MA are well above 100 percent of FFS levels. Specifically, in 2006, MA program payments were 112 percent of FFS expenditure levels . . . a slight increase over earlier estimates, due primarily to growth in private fee-for-service (PFFS) plans” (“Update on Medicare Private Plans,” Report to the Congress: Medicare Payment Policy, Medicare Payment Advisory Commission, March 2007).
Limiting benchmarks on payments to Medicare Advantage plans to 100 percent of traditional fee-for-service Medicare costs would reduce spending by $65 billion between 2008 and 2012 (“The Medicare Advantage Program: Trends and Options,” Congressional Budget Office testimony, March 21, 2007).
***** 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.
Fast Relief: Part D Monitoring Project
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.
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