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CMS Urged to Broaden Low-Income Drug Coverage

By Mary Agnes Carey, CQ HealthBeat Associate Editor

January 31, 2007 -- Medicare and Social Security officials said Wednesday that they're doing their best to identify and enroll Medicare beneficiaries who qualify for the drug program's financial assistance, but members of a Senate panel said more must be done.

Senate Special Committee on Aging Chairman Herb Kohl, D-Wis., said more than 3 million seniors are projected to be eligible for the low-income subsidy but are not receiving it. He also said that some 600,000 Medicare beneficiaries who received the financial assistance in the drug benefit's first year have lost it and must reapply.

"And since the application process is so onerous, we know that some seniors will simply give up," Kohl said. "As we enter the second year of the Medicare drug benefit, we have an obligation to make sure it is working for all seniors, but particularly for our poorest seniors, who need help the most. We are not there today."

S. Lawrence Kocot, senior adviser to the administrator of the Centers for Medicare and Medicaid Services (CMS), told the panel that his agency has worked with several partners, including grass-roots organizations; local, state, and federal agencies; State Health Insurance Assistance Programs (SHIPs); and others in an effort to enroll Medicare beneficiaries into the drug benefit and, if they qualify for low-income assistance, make sure beneficiaries receive it.

"Our work to identify and enroll these beneficiaries is a multifaceted, continuous effort that did not stop with the end of the first enrollment period; rather it has been a sustained and ongoing effort," Kocot said in prepared testimony.

Beatrice Disman, chair of the Social Security Administration's Medicare Planning and Implementation Task Force, said the agency has used "any and all means at our disposal," including targeted mailings, phone calls, computer data matches, and community forms, to reach eligible beneficiaries. Applications for Medicare Part D's low-income assistance program are filed with the Social Security Administration, which then determines if beneficiaries are financially eligible.

Approximately 10 million Medicare drug plan enrollees received the low-income assistance in 2006, Kocot said, adding that CMS expects that figure to grow throughout the year because beneficiaries approved for the subsidy can enroll in the drug benefit anytime in 2007.

About 35 percent of those who lost their financial assistance have regained their eligibility, he said. Beneficiaries lose eligibility for the Medicare drug benefit low-income assistance when they lose eligibility for Medicaid, the supplemental security income program, or Medicare savings programs that also offer financial assistance to low-income beneficiaries.

According to a National Council on Aging report released at the hearing, between 3.4 million and 4.4 million Medicare beneficiaries who are eligible for the low-income subsidy are not receiving it. The report also shows that there are 2.9 million beneficiaries who have no prescription drug coverage and have not enrolled in the drug benefit.

At the Aging hearing, Howard Bedlin, the group's vice president of policy and advocacy, urged Congress to eliminate the asset eligibility test because he said it disqualifies people with modest assets for the Medicare drug benefit's low-income subsidy. Half of all the people who fail the asset test have excess assets of $35,000 or less, he said, and they tend to be older, female, widowed, and living alone.

Some lawmakers on the panel agreed that the asset test is too difficult and must be simplified. Sen. Gordon H. Smith, R-Ore., the Aging panel's ranking member, said he plans to introduce legislation that would simplify the asset test now used to determine whether or not beneficiaries qualify for the assistance. Smith also said he would reintroduce a bill from the 109th Congress that would eliminate Medicare Part D cost-sharing for low-income seniors who receive their long-term care services in facilities such as assisted-living centers. Currently, beneficiaries' cost-sharing is waived only if they live in a nursing home.

Ellen Leitzer, executive director of the Health Assistance Partnership, a group that works with SHIPs all over the country, asked the Aging panel to help those organizations obtain more federal funding because she said SHIP counselors are handling many inquiries from beneficiaries that should be handled by the drug plans themselves or CMS. Yearly funding for the SHIP network was $31 million in 2006, while Pearson Government Solutions, a Medicare contractor that managed the Medicare hotline, received $440 million in 2006 for a 2.5-year contract.

Kohl also said that Wednesday's session was the beginning of a series of hearings the panel would conduct "to fix the problems with Medicare's prescription drug program so that seniors can finally enjoy a simple, affordable benefit."

Two of the panel's newest members, Bob Casey, D-Pa., and Sheldon Whitehouse, D-R.I., said that during their Senate campaigns they heard many complaints about the Medicare drug program's complexity and hoped the panel would examine those issues.

"I could not go into a senior citizen center and mention Part D without boos and hisses," Whitehouse said. "Every week, we had another heart-breaking story come through the door" of beneficiaries who found the program overly confusing and complex, he said

Aging committee member Larry E. Craig, R-Idaho, who said he had previously been skeptical about the drug program's implementation, declared it a "roaring success" and said that individuals must take more responsibility themselves to enroll in the program, understand how it works, and see if they can qualify for financial assistance.

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