[QUAD-L] Fwd: The Fourth Step to Improving Prescription Drug Coverage

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Dana

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Asclepios               

 

Your Weekly Medicare Consumer Advocacy Update

ACT NOW: The Fourth Step to Improving Prescription Drug Coverage

July 21, 2005 • Volume 5, Issue 29

 

Ouch!

 

One saving grace of the Medicare Part D outpatient prescription drug benefit is that the low-income subsidy (LIS)—dubbed “extra help” by the Centers for Medicare and Medicaid Services—has the potential to turn a complex, limited benefit that panders to the insurance and pharmaceutical industries into a real benefit for some consumers.

 

With this extra help, poor older Americans and those with disabilities will receive assistance to pay   their Part D premiums and coinsurance and will not be subject to the infamous “doughnut hole”—an unprecedented coverage gap that will leave many without drug coverage.

 

But, true to form, Congress and the Bush administration fumbled here too—adding an asset test on top of limits to qualify for this extra help—and asking individuals with limited means to use a dauntingly complicated application to prove they need help.

 

In the words of an Asclepios reader:

 

“It is outrageous to expect poor people to present their assets for qualification [for the Medicare Part D low-income subsidy (LIS)].  If they have monetary assets and liv[e] at poverty income levels, they are probably drawing on their assets every month—depleting their resources.” —Bonnie Roberts, Florida.

 

Removing the asset test would allow the government to automatically enroll every person who qualified for LIS based on his or her income—a fundamental step for improving the drug benefit discussed in last week’s Asclepios.

 

Following Bonnie’s lead, here’s step four for improving prescription drug coverage for people with Medicare:

 

4.      Eliminate the asset test for the low-income subsidy.

 

The government estimates that some 14 million people with Medicare meet both the income and asset criteria required to receive extra help to pay for prescription drugs.

 

In addition to those 14 million people, an estimated 2.4 million people with Medicare meet the income limits for extra help—less than $1,197 in monthly income ($1,604 for couples).  But these individuals have too many assets—more than $11,500 in assets ($23,000 for couples)—to qualify for the extra help.

 

Congress and the administration know that millions of people in need will be deprived of necessary medicine because of the asset test.

 

Research (see highlights in the Medical Record) has shown over and over again that the asset test is a tried and true method for reducing the number of people who are eligible for a benefit and for reducing the number of eligible people who enroll, and that eliminating asset tests will actually reduce administrative costs while increasing participation.

 

The complex questions and hard-to-assemble information required by an asset test will scare off some of the neediest, who won’t even apply for LIS, and deny help to others who are depleting their lives’ savings in order to pay for the basic necessities of food, housing and medicine.

 

Instead of discouraging people from applying for extra help, Medicare should rely on its nearly 40 years of experience and program success.

 

Medicare enjoys a 95 percent enrollment rate in Medicare Part B—a success rate unmatched by other public benefits programs.  The Social Security Administration (SSA) automatically enrolls people in Medicare based on their age and work history—information at SSA’s fingertips. 

 

Without an asset test, low-income individuals would not need to endure an application process for extra help to pay for the new drug benefit.  Instead, they could be automatically enrolled based on their Social Security income—and the Medicare drug benefit could reach millions more lower-income older adults and people with disabilities.

 

Sign up here to help build a national campaign to give people with Medicare the drug program they deserve. Send an e-mail message or letter telling us why creating a real Medicare drug benefit is important to you.

 

Click here to help build a national campaign to create a real Medicare prescription drug benefit.

 

 

Medical Record

 

Health and Human Services Secretary Michael Leavitt acknowledged it won't be easy to get those people to apply for the help. “That's a very hard group to reach,” Secretary Leavitt said. “If 20 percent make it, that would represent a world-class effort on our part” (“Selling Seniors on Drug Benefit,” Albany Times Union, July 15, 2005).

 

Nearly 14 million noninstitutionalized people with Medicare would qualify for low-income subsidized prescription drug benefits in 2006 based on income alone. That is, their incomes are less than $1,197 per month/individual ($1,604 per month/couple)—150 percent of the federal poverty level (“Low-Income Subsidies for the Medicare Prescription Drug Benefit: The Impact of the Asset Test,” Kaiser Family Foundation, April 2005).

An estimated 2.4 million people with Medicare with incomes below 150 percent of the federal poverty level are expected to be ineligible for low-income subsidies because of the asset tests. Among these 2.37 million, approximately 70 percent have incomes below $1,077 per month/individual ($1,444 per month/couple), or 135 percent of the federal poverty level; and 30 percent have incomes between 135 percent and 150 percent of the federal poverty level (“Low-Income Subsidies for the Medicare Prescription Drug Benefit: The Impact of the Asset Test,” Kaiser Family Foundation, April 2005).

Older Americans and those with disabilities who have low incomes tend to have minimal assets. Eighty-five percent of all people with Medicare with incomes below the federal poverty level have less than $12,000 in countable assets and more than half (57 percent) have less than $1,500 in countable assets (“Medicare Beneficiaries and Their Assets: Implications for Low-Income Programs,” Kaiser Family Foundation, June 2002).

“In 2001, Arizona eliminated the asset test for Medicare Savings Programs after a study found that savings on administrative costs related to documenting assets roughly equaled the costs of benefits for additional persons who would enroll in the programs” (“How Asset Tests Block Low-Income Medicare Beneficiaries from Needed Benefits,” Commonwealth Fund, May 2004).

Widows make up almost half of the 2.4 million people with Medicare who qualify for the Medicare drug benefit’s low-income subsidy (LIS) based on income, but are ineligible because of assets (“Low-Income Subsidies for the Medicare Prescription Drug Benefit: The Impact of the Asset Test,” Kaiser Family Foundation, April 2005).

 

Fast Relief: What You Can Do

Let everyone—your colleagues, friends, families—know how we can improve the Medicare prescription drug benefit for people with Medicare and American taxpayers. Help us build a national network of concerned citizens who want to create the Medicare prescription drug benefit Americans deserve.

Click hereto help build a national campaign for a real Medicare prescription drug benefit!

 *****

 

Don’t Let Your Suffering Go Unnoticed

Are you struggling to pay for your prescriptions drugs or get the health care you need? Work with the Medicare Rights Center to bring your story to the ears of policymakers, the press and the public in an effort to expose the shortcomings of the American health care system. To learn more about how to make your voice heard in the national Medicare debate, visit www.medicarerights.org/maincontenthiddenlives.html

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 action alert 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.

 

Medicare Rights Center (MRC) is the largest independent source of health care information and assistance in the United States for people with Medicare.  A national nonprofit founded in 1989, MRC helps older adults and people with disabilities get good, affordable health care.

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