By John Reichard, CQ HealthBeat Editor
Medicare's prescription drug benefit for low-income seniors and disabled Americans is a very good deal, but too few of those eligible are enrolled, and those who are face chaotic year-to-year changes that can affect access to their medications, speakers at a Capitol Hill forum said Monday.
Forty-eight percent of seniors with incomes at or below 150 percent of the federal poverty line are unaware they qualify for the low-income benefit, said Stuart Guterman, director of the Program on Medicare's Future at The Commonwealth Fund, a foundation that funds studies of health coverage issues. Those unaware of the benefit—which is funded by a relatively generous "low-income subsidy" (LIS) —are disproportionately African American, non-white Hispanic, or at the very lowest end of the income scale, Guterman said. The forum was sponsored by the Alliance for Health Reform, a nonpartisan group that sponsors educational programs on health policy issues.
The 150 percent figure is the cutoff point for the benefit, which covers the vast majority of prescription drug costs of those who qualify. The benefit is part of Part D of the Medicare program, the prescription drug benefit established under the 2003 Medicare overhaul law (PL 108-173). Part D coverage is available to all Medicare beneficiaries, either through stand-alone "PDPs," or Prescription Drug Plans, or through private health plans in Medicare, known as Medicare Advantage plans.
Those who do enroll in the low-income benefit get much better protection against out-of-pocket prescription drug costs than beneficiaries with standard Part D coverage, Guterman noted, citing data from a survey by the Kaiser Family Foundation, The Commonwealth Fund, and the Tufts–New England Medical Center. The survey of some 16,000 Medicare beneficiaries found that only 11 percent of beneficiaries with the low-income benefit spent more than $100 on prescription drugs in the prior 30 days, compared to 32 percent of those with low-incomes not enrolled in the low-income benefit.
John Rother, policy director at the senior lobby AARP, noted that the low-income benefit on average delivers $3,353 worth of prescription drug coverage to those receiving it—"so you wonder why people aren't beating down the doors to be enrolled." The Centers for Medicare and Medicaid Services estimated soon after the creation of Part D that 14.4 million Medicare beneficiaries would enroll in the benefit, yet thus far, only 9 million are actually signed up, he said. Another 2.3 million beneficiaries who would qualify based on income are excluded because they too meet the assets test, he noted.
Besides ignorance of the benefit, Rother said people fail to enroll because it has a "welfare stigma" for some people, associated with where they must go to enroll and the asset test, which requires them to list such holdings as burial plots and life insurance policies under penalty of criminal prosecution if they fail to state the value of assets accurately.
Another problem with the low-income benefit occurs with automatic enrollment provisions used to sign up some beneficiaries. Laura Summer, a researcher at Georgetown University's Health Policy Institute, said medications needed by an individual beneficiary may not be on the formulary of covered drugs of the plan in which the beneficiary is automatically enrolled. Enrollees' health may suffer because they may go without needed medications for a time because of difficulties they experience with appeals and other procedures to obtain needed drugs, she said. Summer said that about two million beneficiaries with the low-income benefit will automatically be switched to another plan at the start of next year because the plan they are in this year will charge premiums too high to participate in the low-income benefit.
Rother predicted that many of these beneficiaries will continue "ping ponging" from one plan to another with each new year—with the attendant prescription drug access problems that creates. Why? The relatively high prescription drug costs of these enrollees will drive up premiums beyond a Medicare premium "benchmark" that determines whether or not a plan charges the beneficiary a premium and therefore whether or not it can be offered to those in the low-income benefit. Fueling those higher costs is the greater reliance of those plans on brand name rather on lower-cost generic drugs, Rother said. He urged changing the way benchmark is calculated to allow low-income beneficiaries in the same plan from year to year, and that the asset test be eased or eliminated. Asset test changes may be included in Medicare legislation to be considered later this year by Congress, he said.
Tracey McCutcheon, deputy director of the CMS Medicare Drug Benefit Group, did not comment on Rother's call for changes in the asset test, which could draw significant GOP opposition. But McCutcheon said there will be a slight increase next year in the number of drugs covered on the formularies of prescription drug plans. She added that CMS is doing "lots of work" to increase its efforts to enroll beneficiaries in the low-income benefit, including giving estimates by zip code of the number of potential qualifying applicants to groups assisting in enrollment efforts.