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Room for Improvement
May 3, 2007 • Volume 7, Issue 18Getting by on $1,000 a month is tough for anyone. For older adults and people with disabilities with illnesses that require expensive prescription drugs and medical treatment, it can be impossible without financial assistance. That is why assistance programs were created to help people with Medicare afford the coverage they need: state-administered Medicare Savings Programs (MSPs) to help pay for Medicare medical coverage and Extra Help for Part D drug coverage.
However, an alarming number of low-income people with Medicare are not enrolled in these programs. It is estimated that there are between 3.4 and 4.4 million low-income people with Medicare eligible Extra Help, the low-income subsidy program for drug coverage, who are still without assistance in paying for their drug coverage.
Many individuals simply do not know that help is available. And for those who do know about the program, the complicated and confusing application process has proven to be a major obstacle, deterring many qualified applicants from trying to enroll.
The asset test in the application for Extra Help disqualifies many individuals who would otherwise be eligible based on their low incomes. About half of the applicants rejected last year were turned away solely because they had financial assets that were over the limits. The limits on allowable assets are set ridiculously low: having savings over only $11,500 for an individual or $23,000 for a couple means ineligibility for Extra Help. The asset test essentially punishes those who worked hard to accumulate some savings over their lifetimes, but whose modest incomes make affording drug coverage a near impossibility.
Legislation recently proposed by Representative Lloyd Doggett, Democrat of Texas, aims to remove these barriers and increase enrollment in Extra Help. If enacted, the Prescription Coverage Now Act of 2007 will simplify the application process by eliminating questions like the current requirement that applicants calculate the monetary value of “in-kind support,” such as help from family with groceries and bills. The bill also improves efforts to reach out to people who are eligible but not yet signed up by having the government use data it already has to identify people with Medicare who qualify. Finally, the proposed measure expands eligibility by raising the limits on assets people can have to $27,500 for individuals and $55,000 for couples.
This legislation will be a tremendous boon to improving enrollment in Extra Help so that people with low incomes can have access to vital medicines.
Congress must also take this opportunity to boost the enrollment numbers for Medicare Savings Programs. Barely two-thirds of people who are eligible for MSPs are enrolled, yet these are people who are the most likely to be in poor health and for whom access to affordable medical care is especially critical.
Similar enrollment barriers exist for MSPs that are addressed in the Prescription Coverage Now Act for the Extra Help program. By removing asset tests and not counting in-kind support, stepping up outreach efforts and simplifying the often daunting application process, Congress can expand access to these crucial programs for low-income people with Medicare.
When the poorest people with Medicare are cut off from assistance with paying for the rising health and prescription drug costs, coverage for their medical needs is put out of reach. Representative Doggett’s bill, the Prescription Coverage Now Act of 2007, tackles the access problems in Extra Help and deserves the support of all members of Congress. Please write and urge your representative to cosponsor H.R. 1536, the Prescription Coverage Now Act of 2007.
Medical Record
In 2004, 150% of the federal poverty level (FPL) was $13,590 for an individual age 65 and older. Nationwide, 24 percent of people with Medicare over age 65 are below 150% FPL (“Percent of Medicare Beneficiaries Age 65 and Over Living Below 150% of the Federal Poverty Level, 2004,” Kaiser Family Foundation, statehealthfacts.org).
New York State has eliminated the asset test for the Qualified Individual (QI) program, the MSP for people with incomes up to 135 percent of the poverty line. Enrollees in the program are also automatically eligible for Extra Help, which helps MRC clients from New York like Ms. H., a 74-year-old widow from Manhattan, NY. “She receives a $400 monthly Social Security check and works part-time to earn an additional $500 a month to make ends meet. Because she has $12,000 in assets—just $290 over the limit—she is ineligible for Extra Help. But because she lives in New York State, she is eligible for the QI program, which serves as a back door to getting her Extra Help” (Statement for the Record of Robert M. Hayes, President, Medicare Rights Center, May 3, 2007).
“Medicare Savings Programs help people with Medicare, who do not qualify for Medicaid, pay for some of the costs of Medicare. There are three Medicare Savings Programs:
(“Help Paying for Medicare,” Medicare Answers, Medicare Rights Center).
- Qualified Medicare Beneficiary (QMB): Pays for Medicare’s premiums, deductibles and coinsurance
- Specified Low-income Medicare Beneficiary (SLMB): Pays for Medicare’s Part B premium
- Qualified Individual (QI-1) Program: Pays for Medicare’s Part B premium”
An estimated 63 percent of people eligible for the QMB and SLMB programs are enrolled. When individuals with full Medicaid coverage are not counted, that figure drops drastically: only 33 percent of eligible people without full Medicaid are enrolled in QMB and 13 percent are in SLMB. Enrollment rates in these programs are significantly lower than participation rates in other means-tested programs, such as Supplemental Security Income and Medicaid (“Improving the Medicare Savings Programs,” National Academy of Social Insurance, June 2006).
***** The Medicare Rights Center (MRC) would like to hear about your experience, or that of someone you know, enrolled in a private health plan. With information about what the issues are with Medicare Advantage plans, we will be able to demand that those problems be fixed.
Medicare Private Health Plan Monitoring Project
Submit your story at http://www.medicarerights.org/maplanstories.html.
*****
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