Eliminate Asset Tests for the Low-Income Subsidy and Medicare

[Guest guest]

AsclepiosYour Weekly Medicare Consumer Advocacy UpdateACT NOW: Eliminate Asset Tests for the Low-Income Subsidy and Medicare Savings ProgramsMay 19, 2005 . Volume 5, Issue 20Ouch!Since 1966 when Medicare was launched, nearly 95 percent of eligible Americans have enrolled voluntarily in Medicare Part B, agreeing to pay monthly premiums in exchange for Medicare coverage for health care from doctors and other community professionals.In enacting the new Medicare Part D drug benefit set to begin in January 2006, the Congress and Bush White House turned their backs on 40 years of Medicare success. Instead of building on the treasured Medicare model of health care coverage, the executive and legislative branches of the federal government colluded (with enthusiastic support from the pharmaceutical and insurance industries) to design a limited, complex and means-tested drug benefit.And now the Administration, along with the Medicare Rights Center and hundreds of other organizations, is struggling to figure out how to recruit people, especially the poorest of Americans, into the program.This month the Social Security Administration is sending out low-income subsidy (LIS) applications to 20 million people with Medicare who may qualify for extra help in meeting the high out-of-pocket costs of the Medicare drug benefit. People with extremely low incomes and scant assets qualify for this extra help.An estimated 14 million people with Medicare are eligible. And it is significant help. It turns a limited drug benefit, a benefit with high out-of-pocket costs and gaps in coverage, covering about a third of a person's drug costs, into a decent benefit for poor older and disabled Americans.Of the 14 million people eligible, about half of them will be enrolled in the subsidy automatically because they have already proven they meet the low income and asset requirements by their enrollment in Medicaid or a Medicare Savings Program (MSP)--programs that help poor people pay their Medicare premiums and some other costs.At issue is how many of the remaining seven million-plus Americans will get the extra help they need--and are legally entitled to receive.Congress and the Administration know that many, perhaps millions of people in need, will be deprived of necessary medicine because of the "asset test."To qualify for the prescription drug LIS, or extra help, people have to establish that they have less than $1,197 in monthly income ($1,604 for couples) and prove that they have less than $11,500 in assets ($23,000 for couples). Imagine being a 75-year old man who worked all his life, and now having to endure the indignity of proving that you're poor enough to receive the medications you need. And, don't forget that these rules leave two million poor people with resources just above these cut-offs facing a continuing choice between buying prescription drug coverage and meeting other basic needs.But even for people who meet these extremely low eligibility criteria, the face the asset test--a proven and tested method to reduce radically the proportion of people who will get help from the drug benefit.People eligible for LIS are not among the heartiest of souls. The neediest and most vulnerable will be scared away from the benefit.Why? Try proving the value of your assets, relying on documentary proof and facing threats of criminal penalties if you make a mistake. And think about being 85 years old, in ill health, and living on $600 a month.The Social Security Administration application right of the bat asks applicants to determine the total value of their savings accounts, checking accounts, stocks, bonds, retirement accounts, and real estate.Once that question is answered--along with three more pages of questions about finances, mostly--the consumer is required to sign, under penalty of perjury, that "I/We understand that anyone who knowingly gives a false or misleading statement about a material fact in this information, or causes someone else to do so, commits a crime and may be sent to prison or may face other penalties, or both."Then reflect that most people eligible for the LIS are* Sicker. More than 50 percent of dual eligibles are limited in activities of daily living, and they have higher rates of Alzheimer's disease, diabetes, pulmonary disease, and stroke than other people with Medicare.* Cognitively impaired. Nearly 4 in 10 have a mental or cognitive impairment. That means that 2.5 million dual eligibles may not be able to navigate program changes even if education and communication efforts are appropriately implemented for an older population.* Institutionalized. One in four dual eligibles lives in a nursing home or other long-term care facility.In getting needed medicine to people who deserve the assistance, the asset test is a killer.Perhaps literally.It is true that the LIS will be a life saver for many people who actually get it. People in need who are driven away by bureaucratic barriers, however, will be denied these life saving benefits. The consequences will be dire.It's time to do away with asset tests and make the low-income subsidy and Medicare Savings Programs accessible to the people who need this critical assistance most.Click here (http://www.medicarerights.org/action) to tell Congress to eliminate asset tests on the Medicare Part D low-income subsidy and Medicare Savings Programs. (We encourage you to personalize your letter.)Medical RecordNearly 14 million non-institutionalized 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 (http://www.kff.org/medicare/loader.cfm?url=/commonspot/security/getfile.cfm & PageID=52270) ," Kaiser Family Foundation, April 2005).An estimated 2.37 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 (http://www.kff.org/medicare/loader.cfm?url=/commonspot/security/getfile.cfm & PageID=52270) ," Kaiser Family Foundation, April 2005).Beneficiaries with 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 (http://www.kff.org/medicare/loader.cfm?url=/commonspot/security/getfile.cfm & PageID=14149) ," 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 (http://www.cmwf.org/usr_doc/summer_assettests_ib_727.pdf) ," 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 (http://www.kff.org/medicare/loader.cfm?url=/commonspot/security/getfile.cfm & PageID=52270) ," Kaiser Family Foundation, April 2005).One-third of men and women with Medicare are unable to properly understand basic health-care materials. Seventy percent of those over 85 have low health literacy. (Pfizer Health Literacy Initiative, Dr. Ruth , September 2002)Lawyers and consumer advocates for low-income people said the form was so complex that they expected fewer than 5 percent of the people to respond ("Medicare Applications Go Out to Low-Income Americans," The New York Times, March 2005).Fast Relief: What You Can DoTell Congress to eliminate asset tests from the Medicare Part D low-income subsidy and Medicare Savings Programs.Click here (http://www.medicarerights.org/action) to send a letter today! (We encourage you to personalize your letter.)*****Don't Let Your Suffering Go UnnoticedAre you struggling to pay for your prescription 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/hiddenlives.html (http://www.medicarerights.org/hiddenlives.html) .The Louder Our Voice, the Stronger Our MessageAsclepios--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, by writing to MRCAdvocacyUpdate@... (mailto:MRCAdvocacyUpdate@...) .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.Please send comments and subscription requests to MRCAdvocacyUpdate@... (mailto:MRCAdvocacyUpdate@...) .