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Only 660,000 Okayed So Far by Social Security Administration for Low-Income Drug Benefit

DECEMBER 5, 2005 -- Only 660,000 of almost 6 million low-income seniors not now in Medicaid estimated to be eligible for the comprehensive Medicare low-income drug benefit have been approved by the Social Security Administration to receive it, the left-leaning advocacy group Families USA said Monday.

Boosters of the Medicare overhaul law (PL 108-173) said it would bring drug coverage to millions of low-income Americans not now receiving it through Medicaid, Medicare managed care, or some other insurance plan.

But "it now appears likely that many millions of low-income seniors will be without the help they need to make drugs affordable," said Families USA Executive Director Ron Pollack. "The most important part of the new Medicare drug legislation was the special help that was supposed to be made available for low-income seniors," he said.

Social Security Administration (SSA) spokesman Mark Lassiter confirmed his agency has approved applications by 660,000 low-income Americans to receive the low-income benefit. Under the Medicare law, SSA must establish that assets held by applicants outside of their yearly income do not exceed certain levels in order for low-income Americans to get the benefit. After an applicant meets the asset test, he or she can then take the next step and actually enroll in a Medicare drug plan.

SSA figures showed that as of the end of November, 3.8 million Americans had applied to meet the assets test. So far, 2.8 million applications have been processed, with the rest to be reviewed by the end of the year, the SSA spokesman said.

Four hundred thousand did not require approval, because they already were deemed eligible or filed a duplicate application, the spokesman added. Of the remaining 2.4 million, about 28 percent, or 660,000, were approved. Of those rejected, 57 percent had too much money saved, 32 percent had too much income from employment, and 11 percent were disqualified both because of income and assets.

The Congressional Budget Office has estimated that 6.4 million Medicare beneficiaries qualify for the low-income benefit because they already are eligible for Medicaid. Medicaid recipients already get drug coverage and are being switched to Medicare.

Another 5.9 million Medicare beneficiaries with incomes below 135 percent of the federal poverty level and ineligible for Medicaid qualify for the most generous part of the low-income benefit, according to CBO.

Centers for Medicare and Medicaid Services spokesman Gary Karr said the low-income population is hard to reach. "It is expected that not everybody would apply right away," he said.

"Anybody who is eligible will get the help. But they do have to apply," he said. Karr added that CMS has sponsored "hundreds of events" along with outside groups to find and enroll low-income Americans. But "we clearly have more work to do and we're going to do it," he said.

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