[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
MEDICARE PROGRAMS FOR LOW-INCOME
BENEFICIARIES
=======================================================================
HEARING
before the
SUBCOMMITTEE ON HEALTH
of the
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
May 3, 2007
Serial No. 110-36
__________
Printed for the use of the Committee on Ways and Means
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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COMMITTEE ON WAYS AND MEANS
CHARLES B. RANGEL, New York, Chairman
FORTNEY PETE STARK, California JIM MCCRERY, Louisiana
SANDER M. LEVIN, Michigan WALLY HERGER, California
JIM MCDERMOTT, Washington DAVE CAMP, Michigan
JOHN LEWIS, Georgia JIM RAMSTAD, Minnesota
RICHARD E. NEAL, Massachusetts SAM JOHNSON, Texas
MICHAEL R. MCNULTY, New York PHIL ENGLISH, Pennsylvania
JOHN S. TANNER, Tennessee JERRY WELLER, Illinois
XAVIER BECERRA, California KENNY HULSHOF, Missouri
LLOYD DOGGETT, Texas RON LEWIS, Kentucky
EARL POMEROY, North Dakota KEVIN BRADY, Texas
STEPHANIE TUBBS JONES, Ohio THOMAS M. REYNOLDS, New York
MIKE THOMPSON, California PAUL RYAN, Wisconsin
JOHN B. LARSON, Connecticut ERIC CANTOR, Virginia
RAHM EMANUEL, Illinois JOHN LINDER, Georgia
EARL BLUMENAUER, Oregon DEVIN NUNES, California
RON KIND, Wisconsin PAT TIBERI, Ohio
BILL PASCRELL, JR., New Jersey JON PORTER, Nevada
SHELLEY BERKLEY, Nevada
JOSEPH CROWLEY, New York
CHRIS VAN HOLLEN, Maryland
KENDRICK MEEK, Florida
ALLYSON Y. SCHWARTZ, Pennsylvania
ARTUR DAVIS, Alabama
Janice Mays, Chief Counsel and Staff Director
Brett Loper, Minority Staff Director
______
SUBCOMMITTEE ON HEALTH
FORTNEY PETE STARK, California, Chairman
LLOYD DOGGETT, Texas DAVE CAMP, Michigan
MIKE THOMPSON, California SAM JOHNSON, Texas
RAHM EMANUEL, Illinois JIM RAMSTAD, Minnesota
XAVIER BECERRA, California PHIL ENGLISH, Pennsylvania
EARL POMEROY, North Dakota KENNY HULSHOF, Missouri
STEPHANIE TUBBS JONES, Ohio
RON KIND, Wisconsin
C O N T E N T S
__________
Page
Advisory of May 3, 2007, announcing the hearing.................. 2
WITNESSES
The Honorable Lloyd Doggett, a Representative in Congress from
the State of Texas............................................. 14
The Honorable Jason Altmire, a Representative in Congress from
the State of Pennsylvania...................................... 16
S. Lawrence Kocot, Senior Advisor to the Administrator, Centers
for Medicare and Medicaid Services............................. 34
Beatrice Disman, Regional Commissioner, New York Region, Social
Security Administration........................................ 28
J. Ruth Kennedy, Medicaid Deputy Director, Louisiana Department
of Health and Hospitals, Baton Rouge, Louisiana................ 74
N. Joyce Payne, Ed.D, Member, AARP Board of Directors............ 78
Patricia Nemore, Center for Medicare Advocacy.................... 89
Emelia Santiago Herrera, Moore Consulting Group, Inc., Orlando,
Florida........................................................ 101
SUBMISSIONS FOR THE RECORD
National Council on Aging, statement............................. 110
Senior Citizens League, statement................................ 116
MEDICARE PROGRAMS FOR LOW-INCOME
BENEFICIARIES
----------
THURSDAY, MAY 3, 2007
U.S. House of Representatives,
Committee on Ways and Means,
Subcommittee on Health,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:04 a.m., in
room 1100, Longworth House Office Building, the Honorable
Fortney Pete Stark (Chairman of the Subcommittee) presiding.
[The advisory announcing the hearing follows:]
ADVISORY
FROM THE
COMMITTEE
ON WAYS
AND
MEANS
SUBCOMMITTEE ON HEALTH
CONTACT: (202) 225-3943
FOR IMMEDIATE RELEASE
May 03, 2007
HL-9
Chairman Stark Announces a Hearing on Medicare Programs for Low-Income
Beneficiaries
House Ways and Means Health Subcommittee Chairman Pete Stark (D-CA)
announced today that the Subcommittee on Health will hold a hearing on
financial assistance programs for low-income Medicare beneficiaries.
The hearing will take place at 10:00 a.m. on Thursday, May 3, 2007, in
Room 1100, Longworth House Office Building.
In view of the limited time available to hear witnesses, oral
testimony at this hearing will be from the invited witness only.
However, any individual or organization not scheduled for an oral
appearance may submit a written statement for consideration by the
Committee and for inclusion in the printed record of the hearing.
BACKGROUND:
While Medicare provides universal coverage for senior citizens and
people with disabilities, it can require significant out-of-pocket
spending. Congress recognized the need to help low-income beneficiaries
with Medicare costs through the creation of the Medicare Savings
Programs (MSP), which help cover premium and cost-sharing charges.
Individually, these programs are the Qualified Medicare Beneficiary
Program (QMB), the Specified Low-income Medicare Beneficiary Program
(SLMB) and the Qualified Individual Program (QI). Congress also acted
to help low-income Medicare beneficiaries in the new Part D
prescription drug program by creating a Low Income Subsidy (LIS).
Together, these programs help millions of beneficiaries afford needed
medical services and medications. However, millions of beneficiaries
who are eligible for these programs are not participating.
Medicare Savings Programs
The Federal Government broadly defines three categories of
beneficiaries and programs that comprise the MSP. Under current law,
Qualified Medicare Beneficiaries (QMBs) have income at or below 100
percent of the federal poverty line (FPL) ($10,210--individual/
$13,690--couple in 2007), but above eligibility for full Medicaid
coverage. State Medicaid programs pay Part B premiums and all Medicare
cost-sharing for QMBs. Specified Low-Income Beneficiaries (SLMBs) have
income between 100 and 120 percent of the FPL, and state Medicaid
programs pay their Part B premiums. Qualifying Individuals (QIs) have
income between 120 and 135 percent of the FPL and the Federal
Government pays their Part B premiums. The QMB and SLMB programs are
entitlements for which state Medicaid programs pay a share of these
costs. The QI program is funded through an annual capped appropriation
passed through the Medicare Part B Trust Fund. Federal law sets the
income eligibility requirements, application procedures and asset
limitations to qualify for these programs differ substantially across
the states.
The MSP are a vital safety net for approximately 1.6 million
beneficiaries. However, estimates suggest that only 40 to 60 percent of
eligible beneficiaries are participating. Onerous application
requirements, personal disclosures about income and assets, and lack of
awareness of the programs are largely responsible for the low
enrollment rates. States also have a financial disincentive to find and
enroll these low-income Medicare beneficiaries because state
expenditures increase when beneficiaries enroll in MSP.
Low-Income Subsidy Program for Prescription Drugs
The LIS program provides extra help for beneficiaries with limited
income and resources in paying for Medicare prescription drug plan
costs. For 2007, beneficiaries with incomes below 150 percent of the
Federal Poverty Level (FPL)--$14,700 individual/$19,800 couple and with
assets under $10,210 (individual) or $20,410 (couple)--qualify for the
LIS. However, benefits in the LIS differ substantially based on where
beneficiaries fall on the income and asset spectrums--``ranging from
complete premium assistance with no deductible and copayments of $1-
$5.35, to partial premium assistance with a deductible and copayments
that are lower than standard coverage.
Beneficiaries with full Medicaid benefits (``dual eligibles''),
those in a Medicare Savings Program and those who receive Supplemental
Security Income (SSI) are deemed eligible for the LIS and automatically
enrolled in a prescription drug plan. Thus, of the approximately nine
million beneficiaries currently enrolled in the LIS program, more than
six million were automatically enrolled into a plan. However, CMS
estimates that more than 3 million beneficiaries eligible for the LIS
are not enrolled in a prescription drug program at all. Targeted,
aggressive outreach programs are necessary to get these beneficiaries
enrolled. Numerous Medicare advocates and analysts have also called for
an end to the complicated asset test, which has kept millions more from
qualifying for extra help and, they argue, penalizes beneficiaries who
have managed to accrue even modest savings or assets.
Increased enrollment in LIS and MSP would provide financial
security to millions of Medicare beneficiaries who can't afford
Medicare's out-of-pocket costs. Improved outreach, less burdensome
application processes, and adjusted income and asset limits could
greatly increase enrollment, improving both the financial and physical
health of Medicare's most vulnerable beneficiaries.
``We must determine how best to ensure that Medicare remains affordable
for all senior citizens and people with disabilities,'' said
Chairman Stark in announcing the hearing. ``Improving the Low
Income Subsidy and Medicare Savings Programs is the most
efficient and direct way to guarantee affordable, comprehensive
Medicare coverage to low-income beneficiaries.''
FOCUS OF THE HEARING:
The hearing will focus on the current state of the Part D Low
Income Subsidy the Medicare Savings Programs, and opportunities to
increase enrollment and expand eligibility in these programs.
DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
Please Note: Any person(s) and/or organization(s) wishing to submit
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FORMATTING REQUIREMENTS:
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Note: All Committee advisories and news releases are available on
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The Committee seeks to make its facilities accessible to persons
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noted above.
Chairman STARK. If our guests would like to join us and
find a seat, we will begin our hearing on help for low income
Medicare beneficiaries.
Medicare is and should always remain an entitlement for
seniors and people with disabilities. I think we have a duty to
ensure that the most vulnerable low income Medicare
beneficiaries are assured access to this entitlement.
Recognizing this, I introduced the Medicare Catastrophic
Coverage Act 20 years ago, at the request of President Reagan,
it perhaps was the shortest lived piece of legislation to come
out of this Committee, but it did have a decent drug benefit,
which we do not have now, and it did have a catastrophic cap,
but that is history.
What is left of it, however, is what we now know as the QMB
part of our legislation and the last vestiges of that Act.
We in this Committee have a history on these issues to
protect and advance the coverage of low income beneficiaries.
Fifty percent of the people over 65 have incomes below $20,000
a year and by the time you add up $1,100 in Part B premiums and
$131 Part B deductible that is going up each year, and $300 or
so in Part D premiums, and a Part D deductible that may be $265
and a couple of hundred bucks more in out-of-pocket costs, many
of these beneficiaries are spending over 10 percent of their
already limited income on medical care.
The two major programs that target financial relief for low
income beneficiaries are the Medicare savings programs, which
comprise QMB and SLMB and QI programs, help low income
beneficiaries pay Medicare premiums and cost sharing.
The low income subsidiary programs help beneficiaries pay
for prescription drugs under Part D.
These programs provide vital financial safety nets for
millions of Medicare beneficiaries, but they are unnecessarily
complex, and the participation rates are unacceptably low.
Estimates suggest that three to four million people are
eligible but not enrolled in the Part D LIS and in MSP,
estimates that 40 to 60 percent of the eligible low income
beneficiaries--only 40 to 60 percent get the help to which they
are entitled.
Bottom line is that millions of people who could benefit
from these programs do not. I would wager it is not because
they do not need or want the help, it is just they do not know
it is there or how to go about getting it.
Improving the low income subsidy and Medicare programs,
savings is the most efficient and effective way to help the
beneficiaries who need it most.
Medicare Advantage plans would have us believe they are the
ones offering the most help to the most vulnerable. That is
just not true. Medicare MSP and LIS are far and away the most
important and comprehensive sources of supplemental coverage
for low income Medicare beneficiaries.
Unlike Advantage plans, these programs protect the choices
that matter to beneficiaries. Choice of doctor, choice of
hospital, and full ``subsidation'' of cost sharing. No games.
No profiteering. No low balls. Just straight up help.
Done right, it is a strategy that is equitable, efficient
and effective.
Today we will hear more about the current state of these
programs and the options for improving them. Simple changes to
eligibility and enrollment rules coupled with strong outreach
programs could help millions more beneficiaries get the support
and medical care they need and deserve.
I hope my colleagues will join us in our efforts to do that
this year. I look forward to hearing from our friends, Lloyd
Doggett and Jason Altmire from Pennsylvania. They will discuss
legislation that they have to improve the LIS program.
In the second panel we will hear from CMS and Social
Security about how these programs are running, and I hope help
us identify opportunities for improvement.
The final panel, the State of Louisiana and several
advocate and beneficiary organizations, will discuss the
positive and negative aspects of the low income programs and
what we can do to improve financial support for vulnerable
beneficiaries.
I look forward to the testimony of our witnesses and would
like to yield to Mr. Camp for any remarks he would like to
make.
Mr. CAMP. Thank you, Mr. Chairman. I, too, welcome our
panels today. Today we will examine programs that provide help
to low income Medicare beneficiaries and certainly these
programs are critical to our most vulnerable seniors who
without them would not have access to health care services.
As we consider ways to improve these programs, we must
focus on measures that give beneficiaries the ability to choose
how they get assistance and also promote the most cost
effective strategy for administering these benefits.
For over 30 years Medicare has provided assistance to low
income seniors through Medicare savings programs, which have
helped to pay premiums, cost sharing and deductibles for
eligible low income beneficiaries.
Yet these programs have not reached enough of the eligible
beneficiaries. Some have suggested we should expand these
programs and possibly even require beneficiaries to be
automatically enrolled.
This approach raises a number of potential concerns. A
mandatory enrollment program could also raise significant
privacy concerns. In order to automatically enroll all eligible
seniors, multiple Government agencies would have to share
sensitive and confidential information which may require
changing existing privacy protections.
These programs are not, however, the only way to assist low
income Medicare beneficiaries.
We will hear today from Ms. Emelia Santiago-Herrera, a
Medicare beneficiary from Orlando, Florida. Ms. Herrera is
enrolled in a Medicare plan that helped her qualify for the low
income subsidy which coupled with her Medicare Advantage plan
provides her with free prescription drugs.
Ms. Herrera's plan also pays her co-payments and other
costs as well as providing extra benefits that Medicare does
not cover, like diabetes disease management and transportation
to her doctor appointments.
Without these additional benefits, Ms. Herrera would likely
be forced to live in a nursing home.
As we consider ways to assist low income beneficiaries, I
hope that we will consider Ms. Herrera's testimony as an
example of how beneficiaries can select how they receive their
assistance and not force them into an one size fits all model.
With that, Mr. Chairman, I yield back the balance of my
time.
Chairman STARK. Thank you. Now I guess we will hear in
either order----
Mr. DOGGETT. I am glad to lead.
Chairman STARK. Mr. Doggett, a distinguished member of our
Committee. You have a bill analysis before us.
Mr. DOGGETT. Mr. Chairman, I have passed that out, I
believe, and a bill analysis that we did on each section of
that.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman STARK. Proceed, and enlighten us in any way you
are comfortable.
STATEMENT OF THE HONORABLE LLOYD DOGGETT, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Mr. DOGGETT. Thank you for convening this important
hearing. Mr. Camp, thank you for your constructive statement.
Fellow Members of the Committee, I appreciate the opportunity
to discuss the needs of low income seniors and individuals with
disabilities to receive extra help to get the life saving and
pain relieving medication that is so important to them.
The supporters of the Medicare Modernization Act of 2003
highlighted the ability of the extra help provisions of that
legislation to afford 13 to 14 million low income Medicare
beneficiaries the assistance that they need.
Unfortunately both Part D and extra help have been plagued
with problems that are keeping millions of individuals from
receiving that assistance that was promised to them.
We have, as all you know, debated in this Committee the
pros and cons of that bill. Some of us think it is great. Some
of us think it is not so great.
I am not here today to re-visit those arguments. Rather,
the sole purpose of this very modest bill is to simply see that
the original intent of the supporters of the Part D Medicare
provision have their promises fulfilled, and that we extend
that extra help to those that need it the most.
In her testimony to this Committee on February 13th, Acting
CMS Administrator, Lesley Norwalk, indicated that at least 3.25
million eligible people with Medicare are not receiving extra
help.
For all the things that may be said pro or con about the
Part D bill, one thing that is not subject to debate is that
for some individuals, some of the poorest individuals in this
country, the Medicare Part D bill is 100 percent failure. They
are not getting extra help. They are not getting any help. It
is those folks to which this legislation is targeted.
H.R. 1536, which you have before you, has been endorsed by
AARP, which will be testifying later, the National Committee to
Preserve Social Security and Medicare, the Center for Medicare
Advocacy, which will be testifying, Families USA, Consumers
Union, the National Council on Aging, and a number of national
health care organizations in addition to that, particularly
those concerned with individuals with disabilities and
prolonged illnesses.
It is co-sponsored by over 160 of our colleagues. My
colleague, Jason Altmire, shares a strong concern for seniors
and the disabled. He will be addressing his bill, which
addresses one of the issues that mine touches in part.
I salute his active and informed role in ensuring that our
seniors and individuals with disabilities get the assistance
that they need.
In 2003, Medicare itself estimated to us on this Committee
that over 58 percent more seniors and individuals with
disabilities would sign up for extra help than have actually
done so since that time.
Many of the eligible individuals who thought they would
receive assistance with this Act are not in fact covered today.
The bill has just really four very simple objectives.
Identify the eligible people. Notify them. Simplify the
process. Adjust the asset test.
First, on identification. As to those three and a quarter
million people that are not now covered, the Inspector General
of the Health and Human Services Department last Fall said
``Access to IRS data would help CMS and the Social Security
Administration identify the beneficiaries most eligible for
subsidy.''
Indeed, the Social Security Administration realized this
when it requested this same data shortly after the Medicare
bill was adopted.
The Internal Revenue Service said it could not supply that
information without a change in the law.
Mr. Camp has referenced privacy protections and as a member
of the Privacy Caucus here in Congress, I am keenly aware of
the need to do that.
This particular bill would simply require identification
not of all income, but where IRS simply gives a yes or no on
potential eligibility based solely on income. This does not
automatically enroll anyone. It does not automatically force
anyone into a Medicare prescription drug plan if they do not
want to be in it.
IRS will say if someone has less than $13,783 in income
this year that they are probably eligible. They may not be, but
they are someone to look at, and if they are above $15,315 in
income, they will say they are probably not eligible. Only for
the narrow group in between those figures will there be any
actual income information supplied to Social Security, and
there are other safeguards on confidentiality included.
On notifying, we provide for a much clearer and direct and
precise notification than has occurred to date.
On simplifying, it is a fairly complex application that is
required to be filed right now. Some of that relates to matters
that are included in income.
For example, if a child assists their parents with their
groceries or something else, cleaning the house, this may be
calculated as income. I think it is neither good family values
nor good Government to demand that be calculated.
My bill removes those items from the income calculation and
simplifies that application.
Fourth, the asset test adjustment. No one wants to provide
the wealthy with free prescription drugs or discounted
prescription drugs under this extra help program. The current
limitation of lifetime savings is less than $8,000 for an
individual, all the savings that they have been able to
accumulate all their life and about $12,000 for a couple, in
order to get the full subsidy.
I make modest adjustments in those levels, raising them to
$12,000 and $18,000 appropriately, and modest adjustments for
the partial subsidy.
The people who meet this income requirement but are
disqualified by the restrictive asset test are by the way,
according to the studies, mostly women, widows, living alone
with no college degree. For the full subsidy, an individual
would still be restricted to no more than $12,000 for an
individual, $18,000 for a couple in savings. That is hardly a
luxurious retirement.
There are other changes that are made in the bill. I see I
am over my time, and I would be glad to respond to questions.
I hope we can build bipartisan support for modest changes
that we can afford and reach more of these people and fulfill
the promise of the Medicare prescription drug bill.
Thank you, Mr. Chairman.
Chairman STARK. Thank you very much.
Jason, would you like to enlighten us on your bill?
STATEMENT OF THE HONORABLE JASON ALTMIRE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF PENNSYLVANIA
Mr. ALTMIRE. Thank you, Mr. Chairman and Ranking Member
Camp. I want to include my colleague Phil English from
Pennsylvania.
Chairman STARK. Jason. I am sorry, not Justin.
Mr. ALTMIRE. That is okay.
I very much appreciate the opportunity to testify today
about my bill, H.R. 1310, the Relief and Elimination of the
Medicare Enrollment Deadline Penalty Act, REMEDY Act.
As part of the Medicare Modernization Act of 2003, Congress
included provisions to apply a late enrollment penalty to the
monthly premiums of Medicare beneficiaries who failed to select
a prescription drug plan by the end of the initial enrollment
period, which concluded on May 15, 2006.
A late enrollment penalty, one percent of the base
beneficiary premium, is added to each uncovered month that a
beneficiary was eligible for coverage but did not enroll.
For Medicare beneficiaries who were on the rolls prior to
January
1, 2006, the clock began after the initial enrollment period
ended.
Their next opportunity to enroll was not until the annual
enrollment period, which ran from November 15, 2006 through
December 31. Individuals who deferred enrollment during the
initial sign up period and decided to wait until the open
enrollment period would therefore have seven uncovered months
and are penalized an additional seven percent, starting with
their 2007 monthly premium.
This penalty applies for as long as the beneficiary is
enrolled in Part D.
The MMA does include exceptions. Individuals who are able
to maintain creditable coverage through a current or former
employer, or union, for example, are exempt. Other examples
include TRICARE, the Federal Employees Health Benefits Plans,
and coverage through the VA.
In Pennsylvania, seniors are able to maintain creditable
coverage through the PACE, PACENET and PACE Plus Medicare
programs.
Certain categories of low income populations, including
dual eligibles, enrollees in Medicare savings programs, and
supplemental security income recipients, are automatically
enrolled in the plans, and therefore, face no penalties.
The MMA also extends low income subsidies to individuals
with incomes below 150 percent of poverty and with assets below
$10,000 for an individual and $20,000 for a couple, but these
beneficiaries may be subject to the late enrollment penalty.
Outside of those exceptions, Medicare beneficiaries are
subject to a late enrollment penalty for all uncovered months.
It is permanently added to their monthly premiums and the
amount is expected to increase each year as it is recalculated
annually to the greater of the amount CMS determines is
actuarially sound or one percent of the base beneficiary
premium.
In the months leading up to the initiation of the Medicare
Part D program, beneficiaries were inundated with information
about coverage options which often caused confusion and
frustration among seniors.
In my home in the Pittsburgh area, seniors had to choose
from over 60 different plans that were submitted to them. It is
simply too much information to consume within a short period of
time.
On top of the new plan options, the initiation of the
program led to a number of access issues to the beneficiaries.
Thousands of seniors were forced to wait days and in some cases
weeks to obtain vital prescriptions.
Considering the hurried initiation of the program, I
introduced H.R. 1310 to provide Medicare beneficiaries with
sufficient time in which to evaluate the myriad of coverage
options available to them. Choosing a health care plan is one
of the most important decisions one can make. It is only fair
to provide beneficiaries with the time necessary to properly
choose the appropriate plan.
My bill provides the needed relief to millions of Medicare
beneficiaries, particularly those with limited incomes. My bill
delays implementation of the late enrollment penalty for the
first two years, 2006 and 2007, of the program. These are the
people that were directly impacted by the fact that it was a
hastily prepared program and did not get off to a quick start.
The bill directs HHS to devise a system in which to
distribute rebates to any Medicare beneficiaries who paid the
late enrollment penalty and it permanently eliminates the late
enrollment penalty for low income subsidy beneficiaries who
might find it otherwise difficult to pay for the increase in
their monthly premium.
I note that CMS in January did delay the late enrollment
penalty for these people for one year, and my bill simply
codifies this waiver and makes it permanent.
Approximately 4.5 million eligible Medicare beneficiaries
did not have prescription drug coverage last year at the
deadline and thus, may be subject to the late enrollment
penalty.
In my district, the Pennsylvania Department of Aging
estimates that 14,000 individuals are eligible for this
coverage but are not enrolled.
I urge the Committee to delay the late enrollment penalty
for two years and provide seniors with the time necessary to
evaluate their health care options without being penalized. It
is a straightforward approach that maintains the current design
of the program and protects against adverse selection while
providing relief for millions of seniors.
Thank you again, Mr. Chairman, and the rest of the
Committee for the opportunity to testify.
[The prepared statement of the Honorable Jason Altmire
follows:]
Prepared Statement of The Honorable Jason Altmire, a Representative in
Congress from the State of Pennsylvania
Thank you, Mr. Chairman, Ranking Member Camp, and Members of the
Committee, including my colleague from Pennsylvania, Mr. English, for
providing me with the opportunity to testify today about my bill, the
Relief and Elimination of the Medicare Enrollment Deadline Penalty (or
REMEDY) Act, H.R. 1310.
As part of the Medicare Modernization Act of 2003 (MMA), Congress
included provisions to apply a late enrollment penalty to the monthly
premiums of Medicare beneficiaries who failed to select a prescription
drug plan by the end of the initial enrollment period on May 15, 2006.
The rationale for a late enrollment penalty was based in part on
experience with the Medicare Part B program and to prevent adverse
selection.
The late enrollment penalty--1% of the base beneficiary premium--is
added for each uncovered month that a beneficiary was eligible for
coverage and did not enroll. For Medicare beneficiaries who were on the
rolls prior to January 1, 2006, the clock began after the initial
enrollment period ended on May 15, 2006. Their next opportunity to
enroll was during the annual open enrollment period, which ran from
November 15, 2006 through December 31, 2006. Individuals who deferred
enrollment during the initial signup period and decided to wait until
open enrollment would have a total of seven uncovered months and would
be penalized an additional 7% starting with their 2007 monthly premium.
The average monthly penalty in this case is $1.91 and the percentage
penalty applies for as long as the beneficiary is enrolled in a Part D
plan.
MMA does include exceptions. Individuals who are able to maintain
creditable coverage through a current or former employer, or union for
example, are exempt. Other examples include TRICARE, the Federal
Employees Health Benefits Plans, and coverage through the Veteran's
Affairs Administration. In Pennsylvania, seniors are able to maintain
creditable coverage through the PACE, PACENET, and PACE Plus Medicare
programs.
In addition, exceptions are made for low-income individuals.
Certain categories of low-income populations, including Dual Eligibles
(those eligible for Medicare and Medicaid), enrollees in the Medicare
Savings programs, and Supplemental Security Income recipients, were
automatically enrolled in plans, and therefore face no penalty. The MMA
also extends low-income subsidies to individuals with incomes below
150% of poverty and with assets below $10,000 for an individual and
$20,000 for a couple, but these beneficiaries may be subject to the
late enrollment penalty.
Outside of these exceptions, Medicare beneficiaries are subject to
a late enrollment penalty for all uncovered months. It is permanently
added to their monthly premiums and the amount is expected to increase
each year as it is recalculated annually to be the greater of: (1) the
amount CMS determines is actuarially sound or (2) 1% of the base
beneficiary premium.
In the months leading up to the initiation of the Medicare Part D
program, beneficiaries were inundated with information about coverage
options, which often caused confusion and frustration among seniors. In
the Pittsburgh area, seniors had the option of selecting one from over
60 available plans. It was simply too much information to consume
within too short of a time frame.
On top of the new plan options, the initiation of the program on
January 1, 2006 led to a number of access issues for beneficiaries.
Thousands of seniors were forced to wait days, in some cases weeks, to
obtain vital prescriptions. It was clear to all outside observers that
the Medicare Part D program was not ready for prime time.
Considering the hasty initiation of the program, I introduced the
REMEDY Act, H.R. 1310, to provide Medicare beneficiaries with
sufficient time in which to evaluate the myriad of coverage options
available to them. Choosing a health care plan is one of the most
important decisions one can make. It is only fair to provide
beneficiaries with the time necessary to properly choose an appropriate
plan. The REMEDY Act provides much needed relief to millions of
Medicare beneficiaries, particularly those with limited incomes.
H.R. 1310 does the following:
Sec. It delays implementation of the late enrollment penalty for
the first two years, 2006 and 2007, of the program.
Sec. It directs the Secretary of Health and Human Services to
devise a system in which to distribute rebates to any Medicare
beneficiaries who may have paid a late enrollment penalty.
Sec. It permanently eliminates the late enrollment penalty for
low-income subsidy beneficiaries, who may otherwise find it difficult
to pay for the increase in their monthly premium. I note and applaud
the announcement of Centers for Medicare and Medicaid Services (CMS) in
January to delay the late enrollment penalty for low-income enrollees
for one year. My bill will codify this waiver and make it permanent.
As of June 11, 2006, approximately 4.4 million Medicare
beneficiaries did not have prescription drug coverage and thus may be
subject to a late enrollment penalty. CMS has not released data about
the specific number of Medicare beneficiaries who have started to pay
the penalty in 2007. But in my district, the Pennsylvania Department of
Aging estimates that 14,000 individuals are eligible for coverage, but
are not enrolled.
I urge the committee to delay the late enrollment penalty for two
years and provide seniors with the time necessary to evaluate their
health care options without being penalized. It is a straightforward
approach that maintains the current design of the program and protects
against adverse selection, while providing relief for millions of
seniors.
Thank you again, Mr. Chairman, for the opportunity to testify today
in support of my bill.
Chairman STARK. Thank you. Thank you both. The Rector of
Justin was the founder of the Groton School. I don't know where
that comes from in my memory bank, but I apologize again. You
first heard about these problems in your town meetings?
Mr. ALTMIRE. That is right. As I said, I have 14,000
Medicare beneficiaries who are subject to the penalty and a
number of them have approached me.
Chairman STARK. They all come to your town meetings?
Mr. ALTMIRE. They do not all come, but a number of them
have, and the chief complaint was they were inundated with so
much information in a short period of time.
Chairman STARK. Your bill now makes this permanent; is that
correct?
Mr. ALTMIRE. Correct. It's a two year fix.
Chairman STARK. You are not suggesting that we do away with
the other late enrollment penalties, charges for say late
enrollment into Medicare and those sorts of things which keep
us from having adverse selection?
Mr. ALTMIRE. I am not; right.
Chairman STARK. Thank you very much.
Lloyd, often we can solve the problems that you suggest
through administrative changes when there is cooperation. Did
you discuss this with CMS or the administration on how we might
correct this in an administrative fashion?
Mr. DOGGETT. I attempted to. I must say I have not met with
great success in that regard and after some months, they
determined that there was a need for an actual change in the
law, but just to give you some background, actually, one year
ago exactly today, the head of CMS, at that time, Dr. Mark
McClellan, was sitting in this chair testifying to the
Committee.
I was asking him about these problems. Because I did not
feel I was getting a very complete response about what was
being done for the low income individuals, on May 26th, after
his testimony, I was joined by 145 colleagues in sending a
letter to him, at that time, thinking this could all be done
administratively.
It took over four months for us to get a response back that
was essentially ``don't worry, be happy,'' we are doing a great
job, not indicating there was a statutory barrier to targeting
these low income individuals.
We also wrote him again in June following further testimony
he had given to the Subcommittee, seeking information. That
also was a communication that was very delayed in getting back
and very incomplete.
Only when the Inspector General of the Health and Human
Services Department came out with his report recommending that
we do exactly what we had been asking CMS to explore, did I get
any firm indication that a statutory change would be necessary.
The fact that Ms. Norwalk, the current acting head of CMS,
told this Subcommittee in February that despite all of their
efforts, all their outreach, they still had about the same
number of people that were not signed up that they had a year
ago indicates that more needs to be done.
A fact, which had not been made known to me previously, the
fact that the Social Security Administration essentially asked
for the same information this bill would authorize to IRS,
because they thought that was the best way to target the
information.
Chairman STARK. Excuse me. The Social Security
Administration asked for the same information?
Mr. DOGGETT. According to the Inspector General's report,
and without going through all of----
Chairman STARK. Did they get it?
Mr. DOGGETT. They were told that a change in the law would
be necessary, that under existing law, they could not provide
that.
I have tried to work to craft, sharing the same concern Mr.
Camp voiced about privacy, to craft the narrowest change
possible. It is very similar to an approach that Senator Gordon
Smith and Senator Jeff Bingaman have offered, after we filed
this bill over in the Senate, trying to work with them to see
how can we target rather than do a scatter shot.
I have sought to work with the folks at CMS right through
last night when unfortunately they again declined to really
give a careful review of this legislation that has been
pending, to tell us if there were any aspects that would create
problems for them in administratively, or that would not
achieve the goal.
There is no doubt they are doing significant outreach, but
that significant outreach has not brought in many of the people
that need to be reached.
I am not suggesting we replace what they are doing, but
target it and do it with a simple, direct application that has
a better chance of achieving success.
Chairman STARK. Thank God you did not turn the problem over
to the military recruiters. You might have even worse results.
Mr. DOGGETT. I would just bring to your attention, today's
USA Today has several articles outlining this problem with an
article entitled ``Many Low Income Seniors Don't Get Drug
Benefit, Advocates/Feds Failing to Reach Out to the Neediest.''
It really is just a summary of the same problems that I have
been testifying about, that this bill is designed to correct.
Chairman STARK. Maybe we can make some steps in that
direction. Mr. Camp?
Mr. CAMP. Thank you, Mr. Chairman. Mr. Doggett, thank you
for your testimony today. Obviously, we would like to reach out
to those eligible for the prescription Part D benefit as much
as possible.
Tell me, with the changes that you are proposing, have you
had a chance to have this scored?
Mr. DOGGETT. Other than protecting privacy, that is my
biggest concern, because I'm committed to pay as you go, and I
requested a score or the Subcommittee requested a score on this
about two months ago. We continue to encourage the
Congressional Budget Office to move forward on it, but we do
not have it today.
I have asked for a section by section analysis so that if
we cannot do all of this, perhaps we can do some of it within
the budget constraints that we face. I do not have a score
today.
Mr. CAMP. As you know, the cost of the entire prescription
Part D program received a lot of attention. Unfortunately, it
is coming in under what was suggested, but still the costs of
this are going to be absolutely critical, and will be a big
part of the policy changes that we are going to be able to
make.
Mr. DOGGETT. Absolutely. That concern is a very legitimate
concern. Many of the advocacy groups that we work with that are
concerned about protecting more people wanted to move to more
of an automatic enrollment and eliminate the asset test
entirely.
There are some good arguments for that. I did not do that,
and in fact, I reduced the asset test so that it makes some
adjustment but a fairly modest adjustment, because of cost
concerns.
Mr. CAMP. Yes. Once you get that and then obviously how
then we meet those PAYGO rules will be something we will have
to grapple with within the Committee.
Thank you very much for your testimony.
Mr. DOGGETT. Thank you.
Mr. CAMP. Thank you. Thank you, Mr. Chairman. I yield back.
Chairman STARK. Mr. Pomeroy, would you like to inquire?
Mr. POMEROY. Just one feature, and I intend to pursue it
more extensively with the Social Security Administration
representative in the next panel.
It is my understanding that SSA was given some initial
funding, which has now expired, relative to handling the
inquiries and making the eligibility determinations for the
extra help.
I have been informed that without additional funding
continuing, they are literally diverting resources away from
the normal work of a Social Security office on a zero sum gain.
We want them to tend obviously to the enrolling of those that
are appropriate for extra help and making those determinations.
We want the Social Security activities to continue.
It is a little mind boggling to think that they would just
think after an initial start up period there would not be any
staffing consequences for the work that SSA has carried on this
extra help determination.
Lloyd, are you aware of anything regarding that?
Mr. DOGGETT. I believe there will be some modest
adjustments necessary. As you know, yesterday in the
Subcommittee on Social Security, we were concerned about the
same issue as it related to handling disability claims. They
are going to be best positioned to answer that.
We basically seek to have the Social Security
Administration go back and re-ask the same inquiry to the
Internal Revenue Service they did originally, perhaps with some
variation given the privacy protections we have here, get that
data, and then use it for a targeted notice out to these folks.
There would be some costs attendant to that. I know costs
was a concern that you had in deciding to join as a co-sponsor
of this legislation, which I appreciate, the same concern Mr.
Camp raised.
Hopefully, when we hear from Social Security and we get
back the score, we can focus any new dollars where they will do
the most good to get the most people.
Mr. POMEROY. Great. Thank you. Thank you, Mr. Chairman. I
yield back.
Chairman STARK. Mr. Hulshof?
Mr. HULSHOF. Thank you, Mr. Chairman. I accept to my
colleague, Mr. Doggett, your invitation to move forward, but I
think I need to take a quick glance in the rear view mirror,
having been in many hearings leading up to Part D.
We heard the complaints that there were going to be zero
choices for seniors, and then of course, we saw the flood of
plans because the private sector saw this was something that
could happen, and then the complaint was there were too many
choices.
It was proposed by some that we should actually have to
legislate the monthly premium because we were not going to see
$35 premiums. In fact, we have not. In fact, in Missouri, you
can find a monthly premium as low as $15, and every senior in
Missouri has had the opportunity to have the doughnut hole
covered.
There have been wild estimates of costs, as Mr. Camp
pointed out. There was an attempt to embarrass the White House
in this Committee, and now as some of us predicted, cost
estimates were over blown.
We supported the idea, for instance, Mr. Doggett, of means
testing Part D for wealthy seniors. That was in the House
version of the bill. I remember when we had that discussion on
the Floor, if memory serves, that vote of means testing for
wealthy seniors was rejected unanimously by those on your side.
I am not here to play ``gotcha.'' When we had the debate on
the Floor about drug negotiation, I asked the Majority Leader,
why is it so difficult to at least provide some credit for
those of us that got at least part of it right.
I think this place would work a lot better when we did not
care who got the credit when things go well.
Mr. Altmire, you said ``hastily prepared program.'' ``Hasty
initiation.'' Well, I respectfully disagree in that we had the
interim drug card. Yes, there were glitches during the massive
roll out, but the fact that eight out of ten senior citizens
think this has been a good program for them.
Yes, we should improve where we should improve.
I would ask you, Mr. Altmire, you waived the penalty for
Medicare beneficiaries who do not enroll in Part D, there are
about 800,000 beneficiaries who pay a late enrollment penalty
in Part B. Why do you not address those folks?
Mr. ALTMIRE. In answering both of your comments, and I
appreciate the question, in saying it was ``hastily prepared,''
maybe I did not articulate. It was not a pejorative statement.
I was merely getting to the fact that in my home state of
Pennsylvania, beneficiaries had 60 different plans to choose
from in a relatively short period of time, something they had
not been asked to do before, and then the fact that the penalty
kicks in for seven months before they have the opportunity to
make their next plan.
It was not an editorial comment on the program. It was just
merely getting to the fact that as you pointed out, there were
more choices than people thought they were going to have, and
as a result, some of them were unable to make their selection
in time and then were subject to the penalty, which leads me
into the second part, unless you want to follow up on that.
Mr. HULSHOF. I would follow up in the sense that your
written statement said ``It was clear to all outside observers
that the Medicare Part D program was not ready for prime
time.''
You were on the health care side before coming here, were
you not? A lobbyist or in some fashion?
Mr. ALTMIRE. I was. I took that part out of my--you are
right. That was in my written statement. I took it out for my
comments. I thought that was over the top, admittedly.
Mr. HULSHOF. Let me ask you, either from your experience in
the health care industry before coming here, or now that you
have joined this body, is there a reason for a late enrollment
penalty?
Mr. ALTMIRE. Yes. There is absolutely a reason with regard
to adverse selection, and that is the reason, and Mr. Camp
mentioned costs, as you did as well. That is the reason this is
only a two year fix. This not an open-ended situation.
I just wanted to resolve or remedy the problem for people
who were caught in this trap of having too many plans to choose
from in a short period of time and are now subject to the
penalty.
I understand how adverse selection works and the cost
issues associated. I only made this a two year bill for that
reason.
Mr. HULSHOF. I would say and would you agree that there are
some seniors, I do not know what the percentage might be, we
are all concerned about those that are not covered, but there
are some seniors, healthy seniors, or maybe even some that just
choose not to participate in some Government run program? Would
you agree with that?
Mr. ALTMIRE. Absolutely. They still would have the right to
do that.
Mr. HULSHOF. Again, I appreciate each of you, as we try
to--no one on this side or either side is saying there is not
room for improvement. Certainly, providing access to those who
need it, certainly on the low income side, again, the original
version said for those that are the affluent who do not need
help with drugs, we had that in the original House version, but
it did not make the final version, but I appreciate the
Chairman indulging me with my time.
Chairman STARK. If the gentleman would yield, I would yield
him time to yield back, I do want to suggest that your review
of how we got where we are was accurate.
I think that now, I do not suspect any of us want to repeal
this law and start over. It is incumbent on us in the nature of
oversight to see what we can do. We have the law. We ought to
see that it gets administered fairly and probably directing
some help to those who are less capable of understanding it.
I think we have all had in every town meeting come and say
I do not understand it, and we have had people call our
district offices and try to get it explained.
To that extent, I hope we could work together either to
simplify or to make the process more user friendly. I think
that is the intention of this hearing.
Mr. HULSHOF. Would you yield?
Chairman STARK. I would be glad to; yes.
Mr. HULSHOF. I absolutely acknowledge and agree with the
statement you just made, Mr. Chairman. What is extraordinary is
that given the difficulty and almost the unanimous opposition
when this plan first came out, the fact that if you believe the
polls, and some people may not----
Chairman STARK. It was not unanimous. It passed by one
vote.
Mr. HULSHOF. I am saying the unanimous--just a handful, Mr.
Chairman, on your side, that supported the bill. Again, I am
not here to point fingers. It is just as difficult as it was to
get Part D passed, and certainly the implementation, I think it
is extraordinary in the short amount of time to have the vast
majority of senior citizens who now are covered with drugs that
they need and the satisfaction rate given the difficulty to get
it passed and certainly the almost unanimous opposition on the
gentleman's side of the aisle.
Yes, let's fix what needs to be fixed.
Chairman STARK. If it will help the gentleman in
deliberating on this issue, I will admit that I am happy we
lost, and I think----
Mr. HULSHOF. I am going to write that down.
Chairman STARK. We think we now have the bill. It is not
the bill I would have written, and it may not have been the
bill the gentleman would have written.
All I can say is let's live with it and improve it in
whatever way we can afford to improve it to help the people who
we hope are served by it.
Mr. DOGGETT. Mr. Chairman, may I respond if there is time?
I am not so happy that we lost, but we did, and you prevailed.
The thrust again is only on ensuring that since you prevailed,
we fulfill the promise that was made at that time.
I am concerned that one of the reasons, not perhaps the
major reason, but one of the reasons those cost figures have
come in much lower than were predicted is that a significant
number of the 13 to 14 million people that Billy Tauzin talked
about and that Medicare estimated would qualify for extra help,
that they just have not gotten it.
If there is a way to achieve that within the cost
constraints and within the privacy constraints, that is all I
am trying to do.
Chairman STARK. I thank the gentleman. Mr. Kind, would you
like to inquire?
Mr. KIND. Thank you, Mr. Chairman. Just briefly. I want to
thank my two colleagues for the good work they are putting into
both of these measures.
Mr. Doggett, first of all, we are taking a look at the
bill. We are quite frankly just waiting for some cost figures
to come back. I think for some time now, we have to take a look
at the asset limit for LIS individuals, but if you could
refresh my recollection, are you proposing indexing those
assets for future inflationary, or are you just bumping the
asset limits up to increase eligibility?
Mr. DOGGETT. I think we are just proposing to raise them
and not to index them. They do need to be indexed. That might
be an appropriate adjustment to the bill.
Mr. KIND. Mr. Altmire----
Mr. DOGGETT. If I might clarify that, apparently they are
already indexed under current law. I know the income limit is
indexed or has an inflation factor in it under current law. Our
bill does not change that. There is something there already.
Mr. KIND. You are also proposing in your legislation that
you would waive the penalties for low income subsidy
individuals on a permanent basis?
Mr. DOGGETT. We do, and that is similar--it covers part of
the population that Mr. Altmire does in his bill.
Mr. KIND. Mr. Altmire, you are just proposing a two year
waiver?
Mr. ALTMIRE. Correct.
Mr. KIND. Not only for low income subsidy but for?
Mr. ALTMIRE. Anyone that is subject to the penalty.
Mr. KIND. I agree. I had a lot of forms as far as sign up
sessions when Part D eligibility enrollment period first opened
up, tremendous amount of confusion, the complexity of it. A lot
of people were not quite sure where to go for accurate
information. It was difficult. If they did not enroll during
that limited sign up period, they were shut off for about seven
months and those penalties were accruing during that time.
It is my understanding that CMS has waived the penalty in
2007 for low income subsidy individuals, but that is it so far.
Is that correct?
Mr. ALTMIRE. Yes. In my bill, I codify that into the
legislation.
Mr. KIND. Very good. Thank you again for your work. Thank
you, Mr. Chairman.
Chairman STARK. Mr. Emanuel, would you like to inquire?
Mr. EMANUEL. Thank you, Mr. Chairman, I would. I apologize
for coming in late. I thank my colleague, Mr. Doggett----
Chairman STARK. Did you bring a note from your mother?
Mr. EMANUEL. My mother has a couple of other things she
would like to bring besides a note, but I will make sure she
knows you said that. She usually carried a 2 x 4 for her kids.
My mother would actually like this whole forum just for her.
That is the dedication of a Jewish mother.
Mr. Doggett, you cited the USA Today story and the fact is
that outside of the automatic enrollment, those low income
seniors have not actually enrolled in the prescription drug
Part D benefit. I was going to take note of that, but if it has
been noted already in the interest of time, I will not do that.
If you go back to the debate we had on the Floor, all those
who were champions of the bill said how well it would do for
low income seniors. In fact, the data shows it has not reached
those, and there are about 3.2 million low income seniors who
are not enrolled who would clearly benefit.
I think our obligation is how do we figure out how to get
to those folks. There are a lot of things to do. I want to
compliment my colleague from Pittsburgh for his idea of waiving
the fee.
You have it obviously for everybody, but at a bare minimum,
and I would hope, Mr. Chairman, we take note of his idea, at
least codifying what CMS did for an one year proposal. If it
was good for one year, it may be good for the second year when
you have 3.2 million folks who are not enrolled that could be
enrolled.
We have to be doing everything we can. I would hope that
obviously we look at this and take some recommendations of our
two colleagues here. I am most impressed with the idea of
codifying and expanding this idea of waiving the fee for
seniors so we do not put up road blocks.
If it was intended to get people in, they got in. Those who
are left out, it is clearly not working for its intention. The
intention was to have a fee to move people. We are past that
stage. Now we have to figure out what we have to do to get them
in because the late fee is a penalty to incentivize you to
move, and that is past its prime. Its best days are behind it.
I would point to my colleague from Pittsburgh who has come
up with a piece of legislation where I cannot stress enough
that we take consideration of and look into.
To the debate between you and my colleague from Missouri, I
will say that I wish this was not the plan. I do not think it
was right. I think when we had the debate about $395 billion
and it turned out to be closer to $800 billion, we should have
know that information.
We would have had a different judgment about whether we
should have done this bill. That said, it is here. One of the
things that concerns me and I hope as we look at it and debate
this is the fact is when we looked in the 1980s and 1990s at
the HMO and the privacy industry to save costs, the reason
people looked at those plans was because they were supposed to
be cheaper than Medicare fee for service.
By the time we got to 2000, the advantage of the private
plans from being more efficient than Medicare, the only way we
got to those plans if we had to give them a 12 percent bonus on
top of the fee for service.
Their sales pitch in the 1980s and 1990s was they were
cheaper, better, more efficient. By 2000, it became we had to
pay them extra to get them to take on the Medicare.
I am not suggesting that we eliminate all of the HMO
benefits. They may work better in rural areas where you do not
have a density, et cetera. All that we are doing here is trying
to find after this period of time a better way to deliver a
benefit in a more cost effective way, because it was never
going to be $394 billion. It is now $800 billion.
We have got to be better with taxpayer money so we can get
a better benefit.
Mr. HULSHOF. Would you yield for clarification, Mr.
Emanuel?
Mr. EMANUEL. Only if my mother is here. Yes, I will.
Mr. HULSHOF. The Congressional Budget Office certified that
the drug benefit was $395 billion and the Congressional Budget
Office has not budged off that number.
The reference to the larger number was the Office of
Management and Budget under the administration that made
different assumptions than the Congressional Budget Office, and
it is the Office of Management and Budget that has indicated
that because of the prevalence of wellness and preventive
drugs, that the cost has been coming down.
The record should indicate that CBO, the official score
keeper for this institution, has held firm to the $400 billion
or less. It is the administration's budget numbers that were
the number.
Mr. CAMP. Would the gentleman yield for one minute?
Mr. EMANUEL. I think I need my mother.
Mr. CAMP. It went down 30 percent from the initial
projection. The fact is the costs are down 30 percent. That is
unprecedented in the history of any Government program.
Mr. EMANUEL. As you both know, because you are both very
good and very studious and committed, one of the reasons the
costs are down is because enrollment is not up. Fact.
As Ronald Reagan used to say ``Facts are a stubborn
thing.''
The truth is and we all know it, yes, they are down, no
doubt. B, one of the reasons they are down is enrollment is not
up. C, one of the things that our two colleagues, from Texas
and Pittsburgh, are trying to do is trying to figure out how to
get enrollment up among the audience and parts of the
population that are in most need of it. D, Richard Foster
nearly lost his job for having--it was a different set of
numbers, granted, but I believe had we known that, I do not
think we would have gotten this bill.
That is all I have to say. Thank you, Mr. Chairman.
Chairman STARK. Would any of the members like to further
inquire?
[No response.]
Chairman STARK. If not, I want to thank both the witnesses.
I know Mr. Doggett will stay with us. Jason, if you would like
to join us for the rest of the session up here and sit in and
listen, you would be welcome.
I am going to call our second panel with the caveat that we
are expecting two votes sometime between 11:00 and 11:15. If
Mr. Lawrence Kocot, Senior Advisor to the Administrator for
CMS, and Ms. Beatrice Disman, Regional Commissioner of the New
York Region of the Social Security Administration, would like
to come forward, we will empanel you.
Ms. Disman, if you would like to proceed to enlighten us. I
think we will have time to get through the summary of your
presentation, and then if we can prevail on you to stick around
for a few minutes, the members will return after the vote and
may wish to inquire.
Please go ahead and enlighten us in any manner you are
comfortable with.
STATEMENT OF BEATRICE DISMAN, REGIONAL COMMISSIONER, NEW YORK
REGION, SOCIAL SECURITY ADMINISTRATION
Ms. DISMAN. Thank you, Mr. Chairman, and Members of the
Committee. On behalf of Commissioner Astrue, I thank you for
inviting me to provide an update on Social Security's ongoing
efforts to sign up eligible Medicare beneficiaries for the low-
income subsidy or ``extra help'' as it is known in the
community.
As you said, I am Bea Disman. I am the Regional
Commissioner of the New York Region, and I have had the good
fortune for the last three years to chair Social Security's
Medicare Planning and Implementation Taskforce.
In doing this, I have had the opportunity of seeing the
truly tireless and dedicated efforts of so many Social Security
employees as they have attempted to reach out to those
individuals who could benefit from the ``extra help.''
I am pleased to provide you with an update of our story.
During the last year, Social Security has continued to use
every means at our disposal to reach those who could benefit
from ``extra help.''
We have been in the communities and senior citizens'
centers, pharmacies, public housing, churches, any place we
thought senior citizens or the disabled were likely to be
found.
We have also continued to work with State pharmaceutical
programs, State health insurance programs, area agencies on
aging, local housing authorities, community health centers,
prescription drug providers, and others to identify those with
limited income and resources.
Throughout these efforts, Social Security's goal has been
to reach every potentially eligible Medicare beneficiary
multiple times in a variety of ways. Whether there were 300 or
three million people, Social Security's job is the same, find
them. Find them where they live. Find them in the communities
where they work, find them in any way we can.
Our message is simple. If you could possibly benefit from
this program, Social Security will help you apply.
For more detail on the many avenues Social Security has
used to inform low-income beneficiaries about ``extra help,''
for example, our multiple targeted mailings, telephone calls or
targeted events, I refer you to my written testimony.
Today, however, I would like to focus on a new initiative.
On behalf of Commissioner Astrue, I am pleased to announce a
new strategy in our continuing efforts to inform the public
about ``extra help''.
This outreach initiative, ``Show Someone You Love How Much
You Care,'' is designed to inform relatives and care givers,
the sons, daughters, grandchildren and family friends who count
a Medicare beneficiary among the important people in their
lives.
By specifically focusing on these caregivers, SSA hopes to
reach even more individuals who could be assisted through the
``extra help'' program.
Last week, Commissioner Astrue met with the advocacy
organizations, some of whom will be testifying later, and
encouraged them to help us in this new strategy. We have
actually worked with all these organizations over the last
three years.
We plan to launch this new initiative around Mother's Day
as we celebrate the most important special people in our lives.
This year we are asking that people show someone they love how
much they care by learning more about that ``extra help'' that
is available with Medicare prescription drug costs.
We are asking them to take a further step to help their
loved ones apply. In the week preceding Mother's Day, Social
Security employees around the country will be visiting their
flower shops, restaurants and place of worship to make
information about the ``extra help'' available. That is where
mothers spend Mother's Day.
I personally will be visiting one of the largest African
American churches in Jamaica, New York on Mother's Day, and I
filmed TV spots publicizing extra help for NBC's local consumer
reporter yesterday.
I have seen the activities from around the nation, in which
my colleagues and their staff are actively engaged. Social
Security also plans to publish related articles in the local
media.
Outreach efforts have also included distribution of special
pamphlets explaining ``extra help,'' and I provided those
pamphlets to each one of you so you could see them. The
campaign will also continue throughout this year with a second
series targeted at Father's Day.
We also did officially send you pamphlets within the last
day or two with a note from Commissioner Astrue. We are excited
about this new initiative and its timing during Older Americans
Month and its prospects for assisting low-income Medicare
beneficiaries.
I would now like to turn to another topic of great
importance to SSA and this Committee, outreach to individuals
potentially eligible for Medicare savings programs.
In May 2007 as in prior years, Social Security will be
sending an annual notice to approximately six million
beneficiaries who based on our data and systems matching of
data with Veterans Affairs, Office of Personnel Management and
the Railroad Board, are potentially eligible for Medical
Savings Programs (MSP).
As in prior years, the MSP letters are tailored to address
the programs which they are potentially entitled to based on
our records. These letters also address ``extra help'' where
appropriate.
In addition to the notices we send information about MSP
assistance to the various States. Information such as income
along with names, and addresses of those individuals are shared
electronically right after the mailing, thus providing vital
information for the States to use in their own outreach
programs.
SSA also assists the States in MSP through the buy-in
process. In 32 States and the District of Columbia, SSA has an
agreement where a determination for SSI imparts Medicaid
eligibility, therefore, MSP. Even in those States where we do
not have an auto enrollment agreement with the State, we
generate an alert that the State can use in assessing MSP.
Finally, I would like to let you know that SSA decision
letters about ``extra help'' have information about MSP.
Information on ``extra help'' decisions themselves are
transmitted to CMS, thus, CMS knows about whether ``extra
help'' is approved or denied. They also receive certain
information on income and resources.
In terms of ``extra help,'' SSA has made a special effort
with CMS to reach those beneficiaries who lost their deemed
status effective January 2007. Of the approximately 630,000
individuals affected, 247,000 have applied for ``extra help''
and 168,000 are eligible. This is in addition to those who have
been re-deemed.
Social Security is currently calling 188,000 individuals
who have not yet filed.
For this fiscal year, almost 850,000 beneficiaries have
filed for the ``extra help,'' about 200,000 of these are
unnecessary--I have about another 15 seconds, if I can
continue--because they automatically were eligible or because
they filed more than one application.
For this fiscal year, we have found 350,000 individuals
that are eligible for the ``extra help''. We continue to
receive about 30,000 applications a week or over 100,000 a
month.
In conclusion, I want to express to this Committee my
personal thanks and the thanks of Commissioner Astrue for your
continuing support for the Agency. I can assure you that the
dedicated employees of Social Security will continue to do our
very best in administering the ``extra help'' assistance and in
partnering with the state and CMS in the promotion of Medicare
Savings Plans.
We realize our job is not complete. We continue to look for
ways in which we can reach out to those in need.
We look forward to our continued dialogue with
organizations, advocacy groups and of course, this Committee.
Thank you. I will be glad to answer any questions you have.
[The prepared statement of Beatrice Disman follows:]
Prepared Statement of Beatrice Disman, Regional Commissioner, New York
Region, Social Security Administration
Mr. Chairman and Members of the Committee:
On behalf of Commissioner Astrue, I thank you for inviting me to
provide an update on the Social Security Administration's (SSA's)
ongoing efforts to sign-up eligible Medicare beneficiaries for the low-
income subsidy (LIS)--or ``extra help'' as it is commonly called, under
the Medicare Prescription Drug Program. I am Bea Disman, and I have
served for over a decade as Regional Commissioner of the New York
Region. I have also spent the past 3 years as Chair of SSA's Medicare
Planning and Implementation Task Force. In this role I have seen the
truly tireless and dedicated efforts of so many SSA employees, as they
have reached out to those individuals who could benefit from ``extra
help.'' I am pleased to provide you with an update of our story--
exactly one year to the day after we last met to discuss this very
important issue.
Since we last spoke, SSA has continued its intensive efforts to
locate low-income Medicare beneficiaries, and provide them with an
opportunity to apply for ``extra help'' assistance. We have used
targeted mailings, phone calls, computer data matches, community
forums, partnerships with State agencies and non-profit organizations,
public information fact sheets, word-of-mouth--in short, any and all
means at our disposal--to reach those eligible to receive assistance
with out-of-pocket costs associated with Medicare prescription drug
coverage. Today's testimony looks back at some of those efforts, but
more importantly, it looks at how SSA's outreach initiatives are moving
forward.
Background
To begin, it may be helpful to recap Social Security's role and
responsibilities regarding the new Medicare Prescription Drug Program.
This provides the context to further describe SSA's activities in
getting low-income people the ``extra help'' intended by Congress.
SSA was given the responsibility by Congress to take ``extra help''
applications and to make eligibility determinations for individuals who
were not automatically eligible, by virtue of their receipt of full
Medicare and Medicaid, Supplemental Security Income (SSI), or Medicare
Savings Programs (MSPs). In order to be eligible for ``extra help,''
individuals must have incomes below 150 percent of the poverty level
applicable to their corresponding household size. In 2007 this is
$15,315 for an individual and $20,535 for a couple. Individuals with
incomes between 135 percent and 150 percent of poverty are eligible for
a subsidy amount based on a sliding scale. The income limits adjust
annually, based on the Federal Poverty Level (FPL).
Individuals must also meet a resource test. The resource level is
$11,710 for single individuals or $23,410 for couples. (These figures
include the $1,500 credit given to individuals who will use their
resources for funeral or burial expenses.) Those who have countable
resources of less $6,120 for an individual and $9,190 for couples,
receive the most cost-sharing assistance. The resource limits adjust
annually based on the Consumer Price Index, or CPI.
SSA was given these responsibilities because of its network of
nearly 1,300 offices across the country, and because of its already
existing role in administering some parts of the Medicare program. Over
the past 70 years, SSA has gained a reputation for helping people in
the communities where they live, and Congress realized that SSA's
presence ``on the ground'' would be vital in the launch of the Medicare
``extra help'' program. Also, the low-income subsidy was designed with
many similarities to SSI, a means-tested assistance program for low-
income aged, blind and disabled individuals, which SSA has administered
for more than 30 years.
Application Process Improvements
When we last met, I described for you the extensive research and
review that went into the creation of SSA's application for ``extra
help.'' Focus groups and cognitive testing experts, automation experts,
advocate organizations, form design professionals, and Congressional
staffs all contributed to this undertaking. The resulting application
was the most extensively tested form SSA has ever produced. But you
should also know that our efforts to improve the application--to
provide an easy way for beneficiaries to apply for ``extra help''--are
continuing.
For example, we have added fields to the application that allow the
applicant to enter the amount of his or her Social Security benefit. Of
course SSA already knows this information, and the original application
instructions stated that the applicant did not need to supply Social
Security benefit amounts. But our analysis of applications received
showed that applicants were trying to enter the information anyway, and
this was frequently leading to inaccurate entries and inaccurate
eligibility determinations. In addition, we revised the application to
request the applicant's date of birth, so that we can identify him or
her if they entered the wrong Social Security number. In another
example, we simplified the question about filing as a couple and
changed the resource amounts to reflect the 2007 resource limits.
In response to advocates and Congressional concerns, SSA is
currently reviewing the paragraph at the end of the ``extra help''
application (sometimes referred to as the ``penalty clause''). Our
review has been prompted in response to concerns some have raised that
such language might inhibit individuals from filing.
Another interesting note is the way Medicare beneficiaries are
currently filing for ``extra help.'' Since the beginning of Fiscal Year
2007, about 22 percent of new applications are Internet filings. This
means that, as a percentage of applications received, the online
``extra help'' application has even exceeded the success of SSA's
online Application for Retirement benefits. The online application has
been a real success story, receiving one of the highest scores ever
given to a public or private sector organization by the American
Customer Satisfaction Index.
Outreach Efforts
I would now like to summarize the efforts SSA has undertaken to
inform beneficiaries about the ``extra help'' available for costs with
prescription drugs. Efforts to educate the public about the new,
``extra help'' program began almost immediately after passage of MMA,
and this outreach continues today. As I mentioned earlier, SSA has
worked with CMS and other Federal agencies, community based
organizations, advocacy groups, and State entities in order to spread
the word about the available ``extra help.''
We have been in the communities--``in senior citizen centers,
pharmacies, public housing, churches--``any place in which we thought
senior citizens or the disabled were likely to be found. We also
continue to work with States that have their own pharmaceutical
programs, State Health Insurance Programs, Area Agencies on Aging,
local housing authorities, community health clinics, prescription drug
plans, and others to identify people with limited income and resources
who may be eligible for the ``extra help.''
Throughout these efforts, SSA's goal has been to reach every
potentially eligible Medicare beneficiary multiple times, in a variety
of ways: for example, by targeted mailings and events, and follow-up
phone calls. And while we are confident we have taken appropriate steps
to reach out to those who may be eligible for the ``extra help,'' our
outreach efforts are continuing. Because there is no enrollment period
for the ``extra help,'' a Medicare beneficiary can apply at any time.
This means there is no inappropriate time to reach out to our lower-
income beneficiaries, and there is no wrong time for these individuals
to complete an application.
As you know, many estimates have been made as to the size of the
eligible population. But whether there are 300 or 3 million people,
SSA's job is the same--find them. Find them where they live, find them
in the communities where they work, find them in any way we can. Our
message is simple: if you could possibly benefit from this program, SSA
will help you apply.
SSA's Initial Outreach Efforts
To further explain how this outreach philosophy has translated into
action, I would now like to describe some of the specific routes SSA
has taken to reach our lower-income Medicare beneficiaries.
As I described to you in last year's testimony, during the initial
start-up phase of the new Medicare prescription drug program, SSA
mailed almost 19 million applications to Medicare beneficiaries who,
based on systems data available to SSA, appeared to have incomes below
150 percent of the FPL. Our goal was to have as many potentially
eligible lower-income Medicare beneficiaries as possible file for the
``extra help'' before the Medicare prescription drug program started in
January 2006.
I also described for you some of the many ways in which SSA
followed-up with those individuals who did not return the applications
sent in the initial mailing.
Through a vendor contract, we called 9.1 million
people and mailed 5 million follow-up notices. SSA
representatives provided one-on-one assistance to nearly
400,000 beneficiaries.
Through a separate analysis, we identified
approximately 1.5 million disability beneficiaries who received
an ``extra help'' application mailer, but did not file an
application. We mailed a special follow-up notice to all of
these beneficiaries, assuring them that filing for ``extra
help'' would have no adverse effect on their disability
benefits.
We personally called over 300,000 beneficiaries who
did not respond to an ``extra help'' application mailer, but
had previously applied for and received the Medicare $600 drug
discount card credit during 2004 or 2005.
We coordinated targeted advertising efforts with
national organizations, such as AARP, and targeted outreach
events with state organizations such as the Elderly
Pharmaceutical Insurance Coverage program in New York.
Ongoing Outreach
SSA continues to use our standard Agency mailings to inform the
public. For example, the cost of living adjustment notice sent in
November 2006 to over 50 million Social Security beneficiaries,
contained information about the new drug program and the availability
of ``extra help.'' In additional efforts to reach specific communities,
SSA has undertaken targeted mailings to beneficiaries with
representative payees, beneficiaries who speak Spanish, Asian-American
and African-American households, and beneficiaries age 79 and older who
lived in zip codes with a high percentage of low income households.
During the period of June through August, 2006, 2.5 million ``extra
help'' applications were mailed to these individuals. SSA has also made
a special effort to reach and re-sign those ``extra help'' recipients
who have lost ``deemed'' or automatically eligible status. As I
previously described, some individuals received the subsidy
automatically, by virtue of Medicaid, SSI or MSP eligibility. In some
cases, however, these individuals lost eligibility to these other
programs, and thus their deemed status, as of January 2007. Working
with CMS, in September 2006, SSA mailed more than 600,000 applications
with CMS notices to Medicare beneficiaries who would no longer be
automatically eligible for ``extra help.'' To date, more than 247,000
have reapplied and 168,000 are now eligible. This is in addition to a
number of individuals who have regained automatic eligibility through
re-entitlement to certain State programs. Social Security is also
personally calling 188,000 of these individuals who, according to our
records, potentially have incomes below the Federal Poverty Level. In
addition to the many specific outreach activities SSA has performed in
the past year, the agency also provides educational outreach to
Medicare attainers--those current Social Security beneficiaries who
turn 65 or reach the 25th month of their disability. If our records
indicate an attainer may potentially be eligible for ``extra help,''
SSA sends an application. This means between 120,000-130,000
beneficiaries receive ``extra help'' applications every month.
Similarly, many individuals call our 800 number or visit our field
offices to conduct traditional Social Security business. We educate
these individuals about the ``extra help,'' and we will take the
application if it is appropriate.
Reaching Caregivers: A New Strategy
On behalf of Commissioner Astrue, I am also pleased to announce
today, a new strategy in our continuing efforts to inform the public
about the ``extra help'' program. This outreach initiative, themed
``Show Someone You Love How Much You Care,'' is designed to inform
relatives and caregivers--the sons, daughters, grandchildren and family
friends--who count a Medicare beneficiary among the important people in
their lives. By reaching these care providers, SSA hopes to reach even
more individuals who could be assisted through the ``extra help''
program. Last week Commissioner Astrue met with the advocacy
organizations that SSA has engaged as partners over these last three
years, to ask their assistance in the new strategy.
We plan to launch this new strategy around Mother's Day. On
Mother's Day, we celebrate some of the most special people in our
lives. This year, we are asking that people show someone they love how
much they care, by learning more about the ``extra help'' that is
available with Medicare prescription drug costs. We are also asking
them to take a further step--help these loved ones to apply. In the
week immediately preceding Mother's Day, SSA employees across the
country will be visiting their local community centers, grocery stores,
restaurants, and places of worship, to make information about the
``extra help'' available on or around the Mother's Day weekend. SSA
also plans to publish related articles in the local media. The outreach
effort includes distribution of special pamphlets explaining ``extra
help,'' entitled ``This Mother's Day, Show Someone You Love How Much
You Care.'' The campaign will continue throughout this year. There will
be a second series of targeted events scheduled for Father's Day. You
should have received copies of these pamphlets within the past day or
two, along with an announcement letter from Commissioner Astrue. We are
excited about this new initiative, and its prospects of assisting low-
income Medicare beneficiaries.
Making a Connection with Medicare Savings Plans
I would now like to turn to another topic of great importance to
SSA and to this Committee--outreach to individuals potentially eligible
for Medicare Savings Programs, or MSPs.
In May 2007, as in prior years, SSA will be sending our annual
notice to approximately 6 million beneficiaries who, based on SSA's
systems matching of data with Veterans Affairs, the Office of Personnel
Management and the Railroad Retirement Board, could be potentially
eligible for MSPs. These programs (Qualified Medicare Beneficiaries/
QMB, Specified Low-Income Medicare Beneficiaries/SLMB, Qualifying
Individuals/Q1, and Qualified Disabled and Working Individuals/QDWI)
provide cost-sharing assistance or ``wrap-around'' coverage to low-
income recipients of traditional Medicare. They are a vital safety net,
and SSA is pleased to cooperate with CMS in this effort. The MSP
letters are tailored to address the programs to which, based on the
matched records, an individual may be eligible. Since the inception of
the Prescription Drug component of Medicare, the letters have also
addressed ``extra help,'' where appropriate.
In addition to the notices we send to inform individuals about MSP
assistance, SSA also shares our list of potential eligibles with State
Medicaid agencies. Information such as income, along with names and
addresses of these individuals are shared electronically right after
the mailing, thus providing vital information for the States to use in
their own outreach programs.
SSA also assists the States' MSP outreach through the ``buy-in''
process--generally speaking, the purchase of Medicare Part B by a State
on behalf of a low-income Medicaid recipient. In 32 States (and the
District of Columbia) SSA has an agreement that our determination of
SSI eligibility imparts Medicaid eligibility as well, and therefore MSP
eligibility. And even in situations where SSA has no auto-enrollment
agreement with the State, we still generate an alert that the State can
use in assessing MSP eligibility.
Finally, we would also note that all SSA decision letters regarding
``extra help'' provide generic information about Medicare Savings
Programs. Information on the ``extra help'' decisions themselves are
also transmitted to CMS. Thus CMS knows whether an ``extra help''
application is approved or disallowed. They also know whether the
resource level is below $6,120 for an individual, or $9,190 for a
couple, and the income as a percent of FPL.
Current Status of Beneficiaries Filing for ``Extra Help''
From the beginning of the fiscal year (October 2006) through mid-
April, almost 850,000 beneficiaries have filed for ``extra help'' with
SSA. About 200,000 of these filings were unnecessary, because either
the applicants were automatically eligible or because they had filed
more than one application. Based on these filings we have found about
350,000 individuals eligible for assistance.
Generally, SSA continues to receive 30,000 applications for ``extra
help'' every week. This continued level of interest from beneficiaries
tells us our outreach campaign is working.
While SSA has no direct role in assisting individuals in either
selecting or enrolling in PDPs, we have also provided instructions to
the field offices on how to make sure those with the new Medicare
prescription drug coverage questions are directed to the resources they
need. In some cases this means our employees will simply refer the
questioner to 1-800-MEDICARE, or to the beneficiary's PDP provider, but
in other cases it means making a personal call to state coordinators,
reprinting and faxing award notices, and even making emergency calls to
CMS Regional Offices.
SSA employees across the country are continuing to communicate
information about this valuable benefit. Our job is not completed, and
we continue to look for more ways to reach those eligible for the
``extra help'' program.
Conclusion
In conclusion, I want to express to this Committee my personal
thanks, and the thanks of Commissioner Astrue, for your continuing
support for the Agency. I can assure you that the dedicated employees
of SSA will continue to do our very best in administering the ``extra
help'' assistance, and in partnering with State and other Federal
Government agencies in the promotion of Medicare Savings Plans.
We look forward to our continued dialogue with organizations,
advocacy groups, and of course, this Committee.
Thank you and I will be glad to answer any questions you may have.
Chairman STARK. Thank you very much. Mr. Kocot, if you
would proceed. At the conclusion of your summary, we will
recess for a few minutes to go vote. We should be back in 15
minutes. Please proceed.
STATEMENT OF S. LAWRENCE KOCOT, SENIOR ADVISOR TO THE
ADMINISTRATOR, CENTERS FOR MEDICARE AND MEDICAID SERVICES
Mr. KOCOT. Thank you. Chairman Stark, Congressman Camp and
distinguished Members of the Subcommittee, thank you for
inviting me to discuss the low income subsidy available under
Medicare Part D and the Medicare savings programs, the MSPs,
which are joint Federal and state partnerships to assist
qualified beneficiaries with Medicare premium and out-of-pocket
costs.
I am Larry Kocot, Senior Advisor to the Administrator of
the Centers for Medicare and Medicaid Services. In my role at
CMS, I have been deeply involved in the policy development and
implementation of Medicare Part D, including outreach efforts
designed to reach beneficiaries who may qualify for extra help.
Today, roughly 39 million Medicare beneficiaries, more than
90 percent of all those eligible for prescription drug
benefits, are receiving the drug coverage they need. Without
question, Part D has had a positive impact on the lives of
people with Medicare, especially those who receive the low
income subsidy.
A primary goal of the Medicare Modernization Act was to
provide access to prescription drugs and generous financial
assistance to beneficiaries with the greatest need. That is
what CMS is doing today.
The low income subsidy provides substantial help to
beneficiaries with limited incomes, and includes the Federal
premium subsidy ranging from 25 to 100 percent of the monthly
premium cost for qualified plans and minimal cost sharing for
covered drugs.
Over 75 percent of low income beneficiaries eligible for
extra help now receive comprehensive drug coverage at little or
no cost. That is 10 million out of an estimated 13.2 million
people. With the extended special election period allowing
subsidy approved beneficiaries to enroll without penalty, we
expect these numbers to continue to grow throughout 2007.
Compared with other means tested programs, enrollment in
the Medicare low income subsidy is impressive. However, we will
not rest until we have reached and assisted every Medicare
beneficiary who qualifies and wants to apply for the low income
subsidy.
Our work to identify and enroll these beneficiaries has
been a multi-faceted and continuous effort that did not stop
with the end of the statutory enrollment periods. Given that
many of these beneficiaries are very difficult to reach through
traditional means, CMS has designed special ongoing initiatives
to target those living in areas that general community outreach
efforts may miss.
To reach the estimated three million beneficiaries who may
be eligible who have not yet enrolled in the low income
subsidy, CMS will pursue innovative non-traditional outreach
techniques. We will sponsor multi-media campaigns, and we are
going to expand our grassroots networks.
We are working closely with more than 40,000 partners who
sponsored and participated in over 12,700 events to date.
The one-on-one counseling and personalized attention made
possible by these partnerships have enabled CMS to reach tens
of millions of people one at a time.
CMS recently launched a targeted data driven outreach
effort with the Administration on Aging to provide resources to
community based organizations and the National Aging Services
networks, so they may provide personalized assistance to low
income Medicare beneficiaries.
Additionally, CMS recently announced $34.2 million in
direct grants and program support to the state health insurance
assistance programs, the SHIPs, which will build capacity for
local counseling sites to reach LIS eligible individuals in the
hard to reach populations.
Our just launched initiative, ``A Healthier U.S. Starts
Here,'' is another component of this comprehensive effort. CMS
and HHS will crisscross the country by bus to raise awareness
about disease prevention. At more than 300 public events, we
will promote Medicare covered tests and screenings, as well as
the availability of the extra help with prescription drug
coverage.
In fact, eligible Medicare beneficiaries will have the
opportunity to apply for the low income subsidy on-site at
these 300 locations.
People enrolled in Medicare savings programs, the MSPs, are
automatically eligible for the Part D low income subsidy.
Through these joint Federal/state programs, qualifying low
income Medicare beneficiaries are entitled to limited
assistance with Medicare Part A and B premiums, deductibles and
cost sharing, depending upon their income status.
In general, the MSPs make Medicare coverage more affordable
for low income beneficiaries and thus promote access to
critical health care services.
While MSP enrollment has grown in recent years, reaching
this population is especially challenging and time and resource
intensive. To assist states with MSP enrollment, beginning this
year, CMS will begin sharing leads data, that is data on those
who have applied for LIS and have either been accepted or
rejected, on a monthly basis, so they may target outreach to
potential MSP eligible individuals in their states.
Outreach to promote and increase enrollment in the Medicare
Part D LIS and related benefits, including the state based
Medicare savings programs, is now part of the permanent
campaign at CMS.
We look forward to working with SSA, our partners here, and
our partners in the local communities, as well as the
Subcommittee, to refine our efforts to achieve even greater
success in finding and enrolling all of the LIS eligible
beneficiaries in Medicare.
Again, thank you for the opportunity to appear today, and I
would be happy to answer any questions that you may have.
[The prepared statement of S. Lawrence Kocot follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman STARK. Thank you very much. I think at this point,
we will recess for about 15 minutes until we return from the
vote, if you two would not mind waiting for us. Maybe we can
even find you a cup of coffee while we are gone.
[Recess.]
Chairman STARK. The Committee will resume the hearing.
Members will be returning a bit at a time from the Floor and
their votes.
Mr. Kocot, I guess I'm disappointed in the lack of
suggested solutions or a discussion in your testimony of the
problems that need to be solved.
It was a marvelous ten pages of praising the Agency and
detailing your past efforts, but I did not find that you
acknowledged what more could or should be done or even any
evaluation of the effectiveness of some of the strategies you
mentioned, that you have had contracts for programs, but I
could not gather from your testimony what the results were.
At the bottom of page ten, you give us a little hope in
that you pledge a commitment to do more. I could not find out
what ``more'' was.
Could you help us help you help the beneficiaries? I would
like to know what you think can be done administratively to get
more folks the benefits of LIS and MSP, to which they are
entitled.
Tell me what you can do and what you plan to do
administratively, and then would you suggest what we can do
legislatively that you will support to help accomplish this
goal.
Mr. KOCOT. I will be happy to, Mr. Chairman. First, let me
take a step back because I want to just kind of ground this
discussion and the fact that we are only in the second year of
this program. It is a brand new benefit. Our primary objective
was to get the benefit up and running and get the people in
that needed the help that we could get.
We undertook a massive effort----
Chairman STARK. This is also about the Medicare savings
programs.
Mr. KOCOT. I understand that, sir. I am getting to that. We
undertook a massive effort to reach a lot of people in a very
short period of time, get them in. Get them enrolled. Get them
signed up for a benefit, in addition to signing up for the
Medicare benefit.
Going back to the MSP programs, back in the early part of
the decade, we did a lot of research on what was effective and
what was not effective. We learned quite a bit from that
research, particularly in that large Government programs, large
Government efforts, largely do not work for the people who are
the hardest to find, specifically those in minority
communities, the poorest of the poor, and so forth.
It is the one-on-one counseling and outreach to them
through local organizations, through trusted intermediaries,
that works best with that population. We have penetrated quite
a few in the initial stages of this benefit. We are now
focusing our campaign towards those hardest to reach, those
most resource intensive and most expensive population to reach,
to get those in the community to work with us on targeting them
on a one-on-one basis.
In terms of what we are actually doing specifically in
terms of the minority communities, I mentioned in my testimony
and in my oral what we are doing with some of the larger
organizations, but it is really the on the ground organizations
that count the most.
We are working with the NAACP, the National Center for
Black and Aged, the National Hispanic Council on the Aging, the
National Asian Pacific Center on the Aging, the Office of
Minority Health.
We have targeted efforts in the African American community
planned, and already, I will say our minority enrollment,
particularly in the African American, Hispanic and Asian
populations, is above the average.
We feel like we have had a considerable amount of success
so far, but our effort really has to turn now to a more focused
hand-to-hand----
Chairman STARK. Are those both LIS and MSP or just LIS,
those outreach programs?
Mr. KOCOT. This is primarily for LIS. Remember, on MSP, our
charge is a little bit different. Specifically with MSP, we do
alert beneficiaries in the Medicare and You Handbook they get
about the MSP program. We participate with the 1144 letters
with Social Security that go out to MSP eligibles or who we
think are MSP eligible.
We are launching a campaign this year to provide more data
to the states for MSP enrollment, our leads program, and we
will continue.
As a matter of fact, the campaign that we have going on in
the grassroots community dove tails very, very nicely with what
the states might want to do on MSP.
Remember, the MSP program is a Federal/state initiative. It
really is a partnership with the states, so the states have to
participate as well. We are making those opportunities
available, but that is for them to decide on how they want to
participate.
Chairman STARK. What can we do legislatively that you would
support? Anything?
Mr. KOCOT. I do not know that you can do anything
legislatively for us to reach these people on an one-on-one
basis. That is really up to partnerships with local
organizations, and that is relationship building.
We are doing everything that we can right now, we think,
that we possibly can, but obviously, we can do more, more
creativity and working with us and having these discussions
that we find very, very helpful. If you have ideas, we are
happy to incorporate them into our efforts, and certainly we
have not found the magic bullet, but we are going to keep
banging away at it.
Chairman STARK. I would just note that your recent handbook
does not mention MSP until somewhere back after 70 odd pages.
Any reason you hid that toward the back of the book?
Mr. KOCOT. I cannot speak to that directly, sir. Although I
will tell you that much of that handbook, I believe, is
mandated by statute. I am not so sure about the ordering, but
there is a lot in that because a lot is required.
Chairman STARK. It is my understanding, Ms. Disman, that
you send Mr. Kocot and his colleagues a lot of information that
you receive for people who apply for various programs. You send
them asset information, income information that you receive; is
that correct?
Ms. DISMAN. We provide information to CMS on our daily
decisions.
Chairman STARK. Both people who qualify and do not qualify?
Ms. DISMAN. Both people.
Chairman STARK. What do you do with that information, Mr.
Kocot?
Mr. KOCOT. I am sorry, I did not follow the answer.
Chairman STARK. You get a lot of information from Ms.
Disman about people who apply for various programs through
Social Security. That information includes income information,
asset information, a whole host of very valuable stuff. What do
you do with it?
Mr. KOCOT. As I said, we are going to be providing quite a
bit of it to the states.
Chairman STARK. But right now you do not do anything with
it?
Mr. KOCOT. I will have to get back to you on the specifics
of----
Chairman STARK. What do you think the states will do with
it?
Mr. KOCOT. Presumably, if we are giving it to them and they
want it----
Chairman STARK. There is somebody that knows what you do
with it. In terms of the LIS data, let me give her a raise.
Mr. KOCOT. I am sorry?
Chairman STARK. Never mind. Go ahead.
Mr. KOCOT. We use the LIS data to facilitate enrollment for
those who are not dual eligibles.
Chairman STARK. Facilitate what?
Mr. KOCOT. Facilitate enrollment.
Chairman STARK. How?
Mr. KOCOT. We place LIS eligible beneficiaries who have not
selected a plan by the end of the enrollment period into a
plan.
Chairman STARK. You just automatically enroll them without
consulting them?
Mr. KOCOT. We automatically enroll them if they have
applied for the subsidy or if they are qualified for the
subsidy and they have not enrolled in a plan. It does not do
them much good to have a subsidy if they are not enrolled in a
plan.
Chairman STARK. Again, I guess your answer to the other
question is you really cannot think of any legislation that we
could do that would help you.
Mr. KOCOT. I cannot think of any right now.
Chairman STARK. Okay. Put your thinking cap on.
Mr. DOGGETT. Will you yield?
Chairman STARK. Sure, Lloyd.
Mr. DOGGETT. Mr. Kocot, I gather that you agree with the
thrust of Mr. Camp's opening statement and comments others of
us have made that on this program, the low income extra help
program, as with all other aspects of Government, what we are
after is the most cost effective solution.
Mr. KOCOT. That is right.
Mr. DOGGETT. How much on this multi-media campaign that you
say you are about to launch, how much money is the Medicare
Administration expending to try to get more people in the low
income extra help program?
Mr. KOCOT. I do not have an exact figure for you.
Mr. DOGGETT. Is that something you could give us next week?
Mr. KOCOT. I can try.
Mr. DOGGETT. You cannot think of any legislative ideas, but
of course, you are aware, although I know you are Director of
Legislation at Medicare and was not aware even as of the day
before yesterday that the Social Security Administration, about
the first thing they did after this bill was enacted, was to
ask the Internal Revenue Service for information on who should
be targeted to receive this benefit.
You are aware of that today, are you not?
Mr. KOCOT. I defer to SSA in the conversation they had with
IRS.
Mr. DOGGETT. I am asking you, sir. Are you aware today from
my testimony--have you ever looked at the Inspector General's
report?
Mr. KOCOT. Yes, I have, sir.
Mr. DOGGETT. You are aware, if you have read it, that the
Social Security Administration shortly after this bill became
the law, asked the Internal Revenue Service for information
about who would be eligible for this extra help program, are
you not?
Mr. KOCOT. Yes.
Mr. DOGGETT. Yes, sir. They declined to give it. The
Inspector General, a Republican appointee, Health and Human
Services, said ``Access to IRS data would help CMS and SSA
identify the beneficiaries most likely to be eligible for the
subsidy.''
They pointed out similar information that is used with
other programs.
Do you disagree with the conclusion that I have just read
from the Inspector General?
Mr. KOCOT. I do not know that I disagree with the
conclusion. I do not know that the conclusion is as well
informed as it could be, with all due respect.
Mr. DOGGETT. You do not disagree with the conclusion, but
you think there is more to the story?
Mr. KOCOT. Yes, I do.
Mr. DOGGETT. If you do not disagree with the conclusion
that access to the data would help identify the beneficiaries,
instead of doing a scatter shot multi-media approach, why has
not CMS come forward and recommended and why are you not
recommending in answer to the Chairman's question that we
change the law to make that information, that limited
information, available so you can do a better job?
Mr. KOCOT. First of all, sir, the information that you are
talking about, because of the population that we are talking
about, it is questionable how effective that information would
be in terms of finding the beneficiaries that we are looking
for.
Mr. DOGGETT. It would find some, would it not?
Mr. KOCOT. It would exclude some.
Mr. DOGGETT. It would identify some individuals who have
less than $13,000 in income, would it not?
Mr. KOCOT. I do not know about specific income thresholds.
Mr. DOGGETT. I am talking about the threshold that applies
to this program. There is no reason that you could not
identify--you might get all three million--you could identify
some of them.
Mr. KOCOT. No, the IRS, in conversations that we have had
with the IRS, they have indicated that we might identify
100,000 to 200,000 people of the entire population.
Mr. DOGGETT. Let me ask you, when did you first ask the IRS
for that information?
Mr. KOCOT. I do not know the exact date.
Mr. DOGGETT. When did you personally get involved? In
anticipation of this hearing within the last few days?
Mr. KOCOT. Yes.
Mr. DOGGETT. Yes, sir. Who did you talk to over there?
Mr. KOCOT. Yesterday, we had a conversation with your
staff. I do not know exactly who----
Mr. DOGGETT. You do not know the names of anyone you talked
to at the Internal Revenue Service?
Mr. KOCOT. We can get it for you.
Mr. DOGGETT. I will continue in a few minutes. Thank you,
Mr. Chairman.
Chairman STARK. Mr. Camp?
Mr. CAMP. Thank you, Mr. Chairman. Thank you both for your
testimony.
I have a question particularly. The low income subsidy has
an outreach or enrollment of 10 million out of the 13 million
eligible in just 14 months of the program, which means 75
percent of those eligible are enrolled.
The MSP has in the QMBs about 33 percent enrolled, and in
the specified low income Medicare beneficiaries, about 13
percent enrolled, and that is over a 30 year period.
You correctly pointed out in your answer to Mr. Doggett
that one is simply a Federal run program, one is a combination
of state and Federal programs.
In terms of the Part D program, we have a fairly high level
of outreach that has been very successful.
My question, Mr. Kocot, what flexibilities are currently
available to the states to help simplify the application and
enrollment process for the MSP program as that is a Federal/
state partnership?
Mr. KOCOT. Actually, the states have quite a bit of
flexibility in terms of the MSP programs. At least a few years
ago, we actually developed a model application with the states
that many are now using. The states have a lot of flexibility
in determining--for example, the states can do on line
enrollment if they wished. A lot of their rules vary by states.
They can alter their rules. They do not have to use some of the
asset and income restrictions that some of them do use. Those
are choices they make.
There is quite a bit of flexibility in terms of how they
determine addition a liquid assets and so on. The states have
quite a bit of flexibility to tailor their programs.
Mr. CAMP. There is an asset test with these programs. What
is the reason behind that? What is its purpose? Why does it
exist?
Mr. KOCOT. These are means tested programs. If people have
sufficient assets to afford their health care, that is
something they should be paying for rather than the state.
The asset test is designed to really exclude those people
who can afford this benefit without the state financing it.
Mr. CAMP. I have a question for both of you. In my
district, we have encountered some difficulties in the premium
withholding part of Medicare Part D. As you know, this is when
the Social Security Administration tracks a beneficiary's
premium for a monthly Social Security benefit.
We have experienced some difficulties that I have heard
from my constituents in my district office when beneficiaries
change their plans but continue to have the premiums withheld
from their old plan.
My office has contacted CMS and SSA. They have tried to
speed this process along. We are routinely told it will take
three to four months to have people get their money back and to
fix the situation. In my view this is far too long, it is
unacceptable.
I am concerned that as we require different agencies to
share information, more problems like this can occur. How are
SSA and CMS working to resolve this problem, if you know, and
if Congress requires or allows more automatic enrollment, how
will we be certain that agencies will work together on these
issues?
Ms. DISMAN. We share your concern that the Social Security
payments be accurate and also be timely. Certainly, CMS and SSA
have worked together over the last three years in first setting
up the requirements for the premium withholding, and I need to
step back a moment because you (the beneficiary) tell your
prescription drug plan that you want to have premiums withheld
from your Social Security check.
That then goes to CMS and CMS sends the data to Social
Security. Certainly, the accurate and timely transmission of
data is a very significant factor.
Both organizations, CMS and SSA, have worked extremely
close to resolve the issues that we did experience during 2006
and certainly I am pleased to tell you that for 2007, all of
the premium withholding transmissions that have come have been
greatly improved.
I will say, and I will turn to Larry Kocot for 2006, we
actually are working with CMS on the issue. We have sent them
an abstract of our files. They are in the midst of a
reconciliation. They, themselves, are looking at 2006.
More importantly, we have joint task forces that are
looking at every aspect of the data exchange. I can tell you we
had a major meeting in February to go over and identify
problems, not just the IT people, but the program people, the
business rules people. We really needed to get everyone in the
same room to understand what was happening.
We set up five major subgroups with priorities on things to
look at, and the status that I have is that these groups are
working very well. It is my understanding that we expect to
hear their recommendations shortly.
The good news is that 2007 is proceeding in a much smoother
way.
Mr. CAMP. Thank you very much. If you could just briefly
answer. My time has expired. If you could just be brief, Mr.
Kocot.
Mr. KOCOT. I would just echo that. We had some early
problems, as you know, with beneficiaries changing plans in the
first few months of 2006. The systems that we had designed
early on frankly did not accommodate a lot of quick changes the
way our rules allowed, so we had a lot of things that we had to
do with business rules. There is a lot of complex interfaces
between our systems and so forth.
As Ms. Disman has said, we have done quite a bit of work
and we will continue to do as much work as we need to do to get
these systems working together so beneficiaries have little
problem.
Mr. CAMP. Thank you. I thank the Chairman for the extra
time. Thank you.
Chairman STARK. Mr. Pomeroy, would you like to inquire?
Mr. POMEROY. Yes, I would, Mr. Chairman.
The extra help dimension of the Medicare Part D plan is an
extremely significant benefit, but I am informed that the
estimates are 40 to 60 percent of eligible beneficiaries are
participating; is that correct?
Mr. KOCOT. No, that is incorrect. Seventy-five percent of
those who are eligible for some form of extra help are in the
program.
Mr. POMEROY. If you exclude those automatically enrolled,
the dual eligible population, how many?
Mr. KOCOT. If the auto enroll population is approximately
6.6----
Mr. POMEROY. The data I have is you have six million that
are dual eligibles and automatically enrolled that is the low
income help part. You have three million that are in on the
extra help part, and that represents roughly 40 to 60 percent
of those, aside from the dual eligibles, that are eligible for
this extra help.
Does that roughly strike you as correct?
Mr. KOCOT. That is probably ballpark; yes.
Mr. POMEROY. We have a tremendous benefit that is basically
free drug coverage, and we have about half the population in
it. We have a product that is essentially free money and only
one out of two is taking it.
This is the worse sales job in the history of the country,
if you cannot give away free money to more than half of those
eligible.
I understand some serious efforts that been made. I think
we have some program design issues, and I really admire my
colleague, Congressman Doggett, in his leadership to try and
get to the bottom of this.
A concern I have is that we are not doing an adequate job
of getting people enrolled, and by the way, while we are at it,
we are hurting our Social Security regional offices in terms of
providing the work they need to do on Social Security.
We had a hearing two days ago in the Subcommittee on Social
Security that showed the backlog on disability determinations
just as one aspect of the program is at an all time high, never
higher. This is really before the baby boomers retire.
What we are in for scares me to death, without really
taking a look at these systems.
Ms. Disman, I thought that your report on what SSA has been
attempting to do was really positive. I think you all have done
yeoman's work. I know they have in North Dakota.
I will never forget sitting at an enrollment forum with a
couple from the North Dakota regional office, and they could
not even get their phone answered because there had been a
hiring freeze and they had lost personnel. They were down to
two in the office. They just could not get it all done. They
were trying their little hearts out.
What extra resources have come into SSA relative to the new
expectations we have now with trying to get people signed up
for extra help on the Medicare Part D proposal?
Ms. DISMAN. Let me go back a little bit.
Mr. POMEROY. I do not have much time, so do not go too far.
Ms. DISMAN. I will not go too far. With MMA itself,
initially, I think you know that Social Security received $500
million to implement MMA in 2004 and 2005. We actually carried
over $111 million of that into 2006. Right now, the
expenditures that we do for MMA come from our limitation
account, our LAE account.
We actually draw down from the Supplemental Medical
insurance trust fund, and a very significant item is that while
we have hired people before, trained 2,200 people on the front
line in those offices that you were talking about for MMA. The
fact that the President's budget has not really received the
Congressional support for the last five years for Social
Security, we did not receive its funding, certainly does have
an impact on all of our workloads.
I certainly am aware of the hearing that you had the other
day.
Mr. POMEROY. We are going to do better than what the
President has asked for this year, and it has been shameful
that those other Congress' have not funded Social Security, and
there is no coincidental relationship between the failure of
earlier Congress' under different management to fund the
President's request for SSA and the fact that we have a record
number on Social Security disability.
We also have them waiting to have their Social Security
disability determined, among other things. The walk in service
deteriorated dramatically. People waiting an hour to get their
phone calls answered, not their questions answered, their phone
calls answered, and on and on.
You just told us the money that was allocated to SSA for
purposes of getting extra help is spent; is that correct?
Ms. DISMAN. Yes, it was. It was funds for 2004 and 2005 and
$111 million was moved to 2006.
Mr. POMEROY. Did the administration request more funds for
that?
Ms. DISMAN. The funding for this comes from our regular LAE
accounts, and we draw down from the Supplemental Medical
Insurance Trust Fund. There really is not targeted funding
specifically.
Mr. POMEROY. Our SSA offices are out of money for this
purpose, yet we have only signed up about half of those
eligible. We have a lot of work to do. Looking at the capacity
in our systems to do the work we are asking them to do has got
to be a part of what this Congress requires.
I think there have been significant efforts on the front
line, but we have to get you enough resources so you can
realistically get done what we are asking you to do.
Thank you, Mr. Chairman. I yield back.
Chairman STARK. Mr. Ramstad, would you like to inquire?
Mr. RAMSTAD. Thank you, Mr. Chairman. Thank you to both of
you expert witnesses. Appreciate the good jobs you do out there
every day, tough jobs, and you are doing them well.
Mr. Kocot, I want to ask you a question. I want to focus on
the broader health care needs of lower income individuals. The
empirical data certainly support the claim that lower income
people typically suffer from more chronic conditions and have
greater health care problems.
I believe that traditional Medicare does the best job it
can with the resources, limited resources, it is given. There
is often little disease management and coordination of care
On the other hand, Medicare Advantage relies on these types
of programs to both keep beneficiaries healthy and to save
money.
Can you talk about the importance of disease management and
coordinated care, especially for lower income beneficiaries,
and also could you elaborate on how this can save Medicare
dollars in the long run, is it not in fact the cost effective
way to go?
Mr. KOCOT. The simple answer to that, sir, is we truly
believe that to be the case, but rather than just believing it,
the MMA gave us many tools to try to test those hypotheses, and
that is what we are doing.
As you point out, the low income, particularly the
population that is eligible for LIS, is typically a sicker
population and coordination of care is a true issue with their
health needs.
We have a lot of different plans that are experimenting
with not only coordinated care but also disease management. We
have special needs plans that are specifically focused on
specific conditions and the coordination of care. We have
demonstration projects on disease management and coordinated
care.
We are really looking forward to seeing what the results of
those demonstrations are to tell you exactly on the question
you are asking, how much money does it save.
Intuitively, coordinated care is going to save money.
Disease management on the other hand, we need to see what
specific programs work the best with these populations.
Multiple chronic conditions and so forth, what works best
together in order to really target the resources so we can save
the maximum amounts possible.
We will have a lot of data coming, but we are not there
yet.
Mr. RAMSTAD. When do you believe the findings in these
studies will lead to definitive conclusions? In other words,
when are the studies going to get back to you?
Mr. KOCOT. In terms of some of the disease management and
coordinated care demonstrations, I believe we have some interim
reports. We have others coming over the next couple of years.
That is not to say that all of those will be definitive.
What the demonstrations are doing is looking at specific
protocols, specific programs and seeing if they work. That is
not to say that we have reached or penetrated all that might
work, and we are going to continue working on this as we move
into an era of better data and better coordinated care and
probably a lot more evidence based results that we can put into
practice.
Mr. RAMSTAD. I have another question, Mr. Kocot, I would
like to ask you. I will try to be brief. We all know about the
really huge burden that long term care is placing on state
Medicaid programs. Certainly, my state of Minnesota is no
exception. States often are seeking waivers to move dual
eligibles from intensive and costly long term care to more
appropriate and less costly assisted living facilities, as you
know.
This creates a problem for a lot of people. Under Part D
dual eligibles who live in nursing homes and other institutions
do not have to pay co-pays while assisted living residents must
pay them, even though they are nursing home eligible.
In the last Congress, several of us introduced the Co-Pay
Equity Act to address this problem, but it did not get to the
Floor for a vote.
As we begin to consider this problem again in the 110th
Congress, I wanted to ask you why should these dual eligibles
have to pay co-pays? What is the policy reason for that?
It seems to make no sense.
Mr. KOCOT. The exact provision you are pointing to is, it
is institutionalized dual eligibles that get the zero co-pay.
As you know, assisted living is not considered an institution
under our interpretation of the statute. That does create a
problem for assisted living facility patients, particularly
dual eligibles.
We certainly support and share with you the goal of
providing the right incentives to get people out of long term
care facilities and into assisted living facilities and into
community based care. We will continue to pursue that.
However, I think we still need to do a little work to
determine whether or not providing a zero co-pay will provide
the appropriate incentives. For example, most of the people
that you are talking about, if they are not dual eligible, they
would be either LIS or dual eligible, non-institutionalized
beneficiaries and are only paying a couple of dollars in co-
pays, is that enough for these beneficiaries to incent them to
go to assisted living.
It is a complex problem. We are continuing to look at it.
Mr. RAMSTAD. It is a complex problem, I understand that.
Can we simplify it by eliminating these Part D co-payments?
Would that not in fact remove a disincentive for Medicaid
beneficiaries to live in assisted living or the community
rather than in a more costly institution?
Mr. KOCOT. Again, I do not know whether the co-pay itself
would be enough to incent someone to go to an assisted living
facility from a long term care facility. I think there are a
lot of other factors in play. There are a lot of other expenses
in play as well.
Mr. RAMSTAD. Other factors, you are alluding to overall
health and the economics of it as well?
Mr. KOCOT. Precisely.
Mr. RAMSTAD. You sound willing to look at it and work
together to delve into it.
Mr. KOCOT. Absolutely; yes, sir.
Mr. RAMSTAD. Try to solve what I see as a real dilemma and
one that needs to be fixed. Thank you very much, both of you. I
yield back.
Chairman STARK. Mr. Becerra, would you like to inquire?
Mr. BECERRA. Yes, Mr. Chairman. Thank you. To the two of
you, thank you very much for your testimony and we look forward
to working with you as we try to resolve some of these issues.
If I gave you 15 seconds each, tell me how we make the
system work better under the current operating structure that
we have. I will start the clock running.
Mr. KOCOT. Which system? We have quite a few.
Mr. BECERRA. How do you get those who qualify for the low
income subsidy to better enroll and those who qualify for the
savings programs under Medicare to enroll? How do we get the
millions who we know are eligible, as Mr. Pomeroy said, it is
free money in essence, how do we get them to better enroll
under the current system in 15 seconds or less?
Mr. KOCOT. I will take my 15 seconds first and talk fast. I
think for the LIS population, we have done, as I said earlier,
quite a bit of research on this. It is the hand-to-hand
partnerships, trusted relationships, the community based
relationships that are going to get those people into the
program.
We are using those relationships. We are leveraging them
now. We will be doing quite a bit more in the coming year.
With regard to the MSP programs, we are providing data. We
are offering the opportunity for states to partner with us on
these relationships, and if we can reach them with states, I
think we have a good chance of enrolling some more of those as
well.
Mr. BECERRA. Good job.
Ms. DISMAN. I want to talk about who we are, Social
Security. We are in the community.
Mr. BECERRA. Fifteen seconds.
Ms. DISMAN. We are in the community. We do deal with people
one on one, whether it be our field offices or 800 number. The
focus that we really need to do is to get targeted types of
individuals to deal with, we make phone calls to people that we
think might be eligible.
We just made 300,000 calls to people that had the 600
dollar credit to see if they would be eligible for the Low-
Income Subsidy (LIS).
It is how you narrow the list to identify people that might
be eligible.
Mr. BECERRA. What I am hearing is that within the current
system, you think that we can do a better job of getting the
millions who have not yet for whatever reason decided to take
advantage of a way to save money that they right now use for
rent or food or could use for rent or food and right now they
are using for their medical care.
Is there no belief that we have to sort of put a little
explosive there under the current system and say it has not
worked. We have 40 to 50 percent of people who could apply for
some of these programs who do not, and go with something that
changes the paradigm here?
For example, why are you not proposing to us that we take
the two programs and say rather than have different criteria
for eligibility, that we will standardize that, so that instead
of filling out one very complicated four or five page form in
one case, and then have to fill out another very complicated
four or five page form which asks for different information,
which means you may qualify for one but may not for another,
why not just come out with one form so that some of these
seniors on fixed income, some not really financially literate,
have an opportunity to qualify for that which they work for,
and that is the benefits of these Medicare programs?
Ms. DISMAN. I think you are referring to both the Medicare
Savings Programs and the LIS.
Mr. BECERRA. Correct.
Ms. DISMAN. I can talk about the LIS because certainly
there are different standards.
Mr. BECERRA. Ms. Disman, I want you to tell me what is
wrong with what I just proposed? Why do we have to have two
different sets of criteria to qualify for a benefit that is
provided through Medicare?
Ms. DISMAN. I would have to yield to Mr. Kocot, since the
whole Medicare program is under their jurisdiction.
Mr. BECERRA. Let's go to Mr. Kocot.
Mr. KOCOT. Let me point out that the MSP program is
actually a Federal/state partnership run by the Medicaid
agencies. It is partially funded by the Federal Government and
partially funded by the states. There are other parties at
interest here as well.
Mr. BECERRA. You provide them with the information that
helps them qualify these folks for the program; right?
Mr. KOCOT. We are beginning to, yes.
Mr. BECERRA. Without the information you provide them, they
cannot qualify anybody for the program?
Mr. KOCOT. No, that is not true. They can qualify people
for MSP within their states. They have the means to do that.
Mr. BECERRA. Are they going to do it?
Mr. KOCOT. That is a decision that every state has to make
in terms of the level of effort.
Mr. BECERRA. Have they done it?
Mr. KOCOT. Some states have done it better than others.
Mr. BECERRA. Maybe you can provide us for the record which
ones have because what I find is when you have millions of
seniors who are on fixed income, who are using their money to
pay for a Medicare benefit to which they would be entitled to
receive at no cost or very low cost, and are trying to figure
out how they buy groceries for the next week, I would think
that you would want to change the paradigm that we have now,
rather than talk about how the states might come up with a
system because they have a Medicaid office.
Does not the Social Security Administration have these
1,300 offices, Ms. Disman, that you mentioned, that make it so
valuable to try to reach out to all those seniors? Could we not
use those 1,300 offices to do this joint effort instead of
having some who know about one program and some who know about
the other program and in some cases, many people knowing about
neither one?
It is crazy. This is what drives people bonkers about
Government bureaucracy. Explain to a senior why they would have
to apply to two different places, filling out two different
applications, complicated applications, for a benefit under in
essence the same Government program?
Mr. KOCOT. They are not the same Government program. That
is the point. These are different Government programs. That is
the way Congress designed it.
Chairman STARK. Will the gentleman yield? We could change
it, could we not?
Mr. BECERRA. Yes. Mr. Kocot, we want to get past the
bureaucratic obstacles that seniors have to getting health
care; right? Is that a shared goal?
Mr. KOCOT. Yes.
Mr. BECERRA. Ms. Disman.
Ms. DISMAN. Yes.
Mr. BECERRA. We want to get there. We also acknowledge that
we have millions of seniors who we know qualify for these
medical benefits, whether it is prescription drugs or just
general health care under Medicare who are not receiving them.
Agreed?
Mr. KOCOT. The numbers clearly show that; yes.
Mr. BECERRA. Ms. Disman.
Ms. DISMAN. Yes.
Mr. BECERRA. We know that part of this is that folks do not
understand the programs or are not aware of the programs or
find them too complicated to navigate. Fair?
Mr. KOCOT. In part; yes.
Mr. BECERRA. Ms. Disman.
Ms. DISMAN. Needs based programs are complicated; yes.
Mr. BECERRA. Why not try to find the simplest way to make
sure folks who are eligible because they worked hard for these
benefits in their years, productive years, who are now in
retirement and able to receive these programs by simplifying
the process, not making it more susceptible to fraud, not
making it a giveaway to those who do not deserve it, but for
those who deserve it, simplifying it so they do not have to
worry about whether they are actually applying for something
they are entitled to receive?
Mr. KOCOT. One of the things that we are both committed to
is providing more data to the states because as you know,
qualification for the MSP program is going to get someone LIS
qualification as well.
Mr. BECERRA. Have you not given them enough data over the
years? What you are saying is you need to give them more data.
We have not given them enough data to help them get enrolled,
all these seniors who have not enrolled?
Mr. KOCOT. We are committed to giving them more data.
Mr. BECERRA. That does not----
Mr. KOCOT. So, they have better targeting.
Mr. BECERRA. My time has expired, Mr. Chairman. I will
yield back. This is the difficulty. You are either saying to me
that you have been derelict in providing data to the states and
therefore, they have not enrolled these seniors who are
qualified and entitled to these benefits, or that the states
have not been receiving the information they need to be able to
know whom to enroll in programs that these seniors are eligible
for and entitled to receive.
Both of those are bureaucratic and I think unacceptable
responses because there is no guarantee if you provide one more
bit of information or data to the states that they will
actually enroll more people, that the end result will be more
people enrolled.
While you are providing that data and during the
bureaucratic running in place, there are seniors who are
spending a lot of money for health care instead of on other
basic necessities that should not have been spent for that.
I think that is unconscionable that we do that. I would
hope that you all would be able to work with us to figure out
ways to streamline the system to remove the bureaucracy so we
get these folks what they have earned over the years of their
work.
I yield back, Mr. Chairman. You have been gracious with the
time.
Chairman STARK. Mr. Doggett?
Mr. DOGGETT. Thank you very much.
Let me ask you, Ms. Disman, as I understand it, you were
designated by the Commissioner of the Social Security
Administration as an expert to present on behalf of the SSA
today on the low income or extra help program.
Ms. DISMAN. Yes, sir.
Mr. DOGGETT. I appreciate your testimony and your interest
in working with us to reach more of these individuals.
In your professional work, have you had an opportunity to
look at either the document or a summary of the document that
the Social Security Administration sent to Internal Revenue
Service asking for information about those who would be
eligible for extra help?
Ms. DISMAN. I actually participated in the meetings, sir,
with the Internal Revenue Service. We knew identifying the
potentially eligible individuals would be a daunting task.
Mr. DOGGETT. Yes, indeed.
Ms. DISMAN. We wanted to really narrow the field for the
outreach. We looked at what the Lewin Group had done for the
Medicare Savings Programs over the years, and it was really
important to identify a targeted population that we could
really focus on.
Mr. DOGGETT. Indeed, because of the millions of people
eligible for Part D, only a small portion of them were eligible
for extra help; correct?
Ms. DISMAN. We did have a discussion with them.
Mr. DOGGETT. Did you have a written communication?
Ms. DISMAN. No, there was not a written communication, sir.
We were there in a session talking about what kind of data.
Being the Regional Commissioner of New York, I am very familiar
that we get 1099 data and other data for the SSI program. I
know we do not have data from our matches on pensions and other
kinds of things.
We really wanted to narrow the 19 million, which we
ultimately sent initially, by doing the screening. Of course,
based on the statute, IRS had indicated to us that there would
have to be a modification of 6103 in order to be able to use
the data for screening.
We do understand there are privacy concerns and other
concerns. As a matter of fact, sir, we have been talking to IRS
about the potential for us even to do a study. For example, if
we send you some names and stuff, without you telling us, can
you tell us how helpful some of your data would be? We are
actually still currently talking to them.
Mr. DOGGETT. You are aware that on November 17th, the
Inspector General, Mr. Daniel Levinson, of the Department of
Health and Human Services, sent a communication to Leslee
Norwalk, the Acting Administrator at the Centers for Medicare
and Medicaid Services, concerning the Social Security request
to the Internal Revenue Service, and recommending that
legislative action be taken to make that data that Social
Security had sought and been denied, to make that available?
Ms. DISMAN. I have seen the letter; yes, sir.
Mr. DOGGETT. Since November 17, 2006, are you aware of
anything that Ms. Norwalk or Mr. Kocot or anyone else at the
Center for Medicare and Medicaid Services has done to attempt
to get that legislative approval?
Ms. DISMAN. I am aware they were involved in discussions
but I was not a party to those, so I cannot comment.
Mr. DOGGETT. Is there any disagreement that you have with
the recommendation of the Inspector General?
Ms. DISMAN. I think the data would be helpful to screen
beneficiaries to determine whether or not there is potential
eligibility. It would make our process much more efficient in
trying to narrow the scope of people.
Mr. DOGGETT. Thank you. That is the sole objective of that
portion of the legislation that I have discussed with the
Committee this morning, H.R. 1536.
Let me ask you about one other aspect of that, and that is
the complexity for seniors who are visiting with people all
over the country trying to decide if they are eligible under
the asset test.
If someone receives help from their children in regularly
paying their grocery bills, if they receive Meals on Wheels, a
hot meal from a community service, if they receive breakfast
from their church, is it possible those things will get
included in the in-kind support and maintenance portion?
Ms. DISMAN. I would like to refer, sir, to the application.
Very specifically, we do say that certain things are not to be
counted. If you look at our application, and you certainly do
not have it in front of you, it says ``Do not include food
stamps, house repairs, help from a housing agency, an energy
assistance program, Meals on Wheels, and medical treatment and
drugs.' ''
It tends to be assistance that people receive in paying for
their rent, paying for their telephone bills, paying for some
of their groceries. It has to be regular. This comes from the
SSI statute, which is really the directive of MMA.
Mr. DOGGETT. If a family member buys food for a senior,
would that fall within in-kind support and maintenance?
Ms. DISMAN. If it is regular throughout the year.
Mr. DOGGETT. If a church that is not Meals on Wheels
provides a breakfast program or hot meal program for its
members?
Ms. DISMAN. That would not be included.
Mr. DOGGETT. Would not be included, although it is not
mentioned on the application specifically.
Ms. DISMAN. That is correct.
Mr. DOGGETT. It might involve some discretion around the
country in how that is done.
I suppose that if there were a way to fulfill the
objectives of the law and simplify the application, Social
Security would have no objection to that?
Ms. DISMAN. Any simplification of a means tested program
makes it easier to administer and easier for the public to
understand.
Mr. DOGGETT. Would you agree that there are a number of
people of very modest incomes, poor seniors, who have been
denied participation in the low-income subsidy program?
Ms. DISMAN. We have provided some information to your staff
and to yourself.
Mr. DOGGETT. I appreciate that.
Ms. DISMAN. About the people that are denied. We have also
done a further longitudinal study. We will have some more
information for you. I think really one has to look at what is
the question, actually implementing the law as it is written.
Mr. DOGGETT. I see my time has expired, Mr. Chairman, but I
will have some questions if time permits for Mr. Kocot if we do
a second round.
Chairman STARK. I thought I might take a little bit of a
second round, and then you can have a second round, too.
Mr. Kocot, you have suggested that one of the reasons for
low enrollment in Medicare Savings Programs is likely the--I
think this is the quote--``the welfare stigma associated with
Government programs.'' Do you recall that? It is either in your
testimony or you mentioned it to us yesterday. Is that your
assumption?
Mr. KOCOT. Actually, that was specifically cited in a
research report that we commissioned in the early 2000s.
Chairman STARK. I do not suppose that people associate
Social Security with that kind of a stigma because we all pay
into it. Is that a fair assumption?
Mr. KOCOT. I cannot speak for those beneficiaries, sir. I
think many of them, based on the research that we have seen,
are skeptical of Government programs in general. Any time
anybody is talking about----
Chairman STARK. Those are just the Republicans, Mr. Kocot,
and there are not many poor ones.
I would seriously question that people associate Social
Security--Ms. Disman, do you think people associate your
offices as welfare offices or an office which is going to
provide them a payment to which they are entitled because they
paid taxes?
Ms. DISMAN. I do not think they associate us with a welfare
office. As a matter of fact, I think the Kaiser Foundation said
we were the third trusted source of Medicare beneficiaries.
Chairman STARK. There you go. Given this stigma will attach
to those applying for state assistance, why should we not just
in an effort to increase enrollment ask the SSA offices to
provide information on the program and to enroll the
individuals there? What would be wrong with that? We would do
away with that stigma, would we not?
Mr. KOCOT. To the extent there is a stigma associated with
Medicaid offices and you switch to Social Security, if there is
no stigma, I suppose that might move it.
Chairman STARK. Maybe we can do that. That is a great
thought. Each year, Ms. Disman, you mail out a COLA adjustment
notice to Medicare beneficiaries. You are going to include--you
did include information this year on the LIS program, did you
not?
Ms. DISMAN. Yes, we did, sir.
Chairman STARK. Could you not also include the MSP programs
in the same mailing?
Ms. DISMAN. Sir, I would have to take a look at the letter.
I assume from what you are saying it is not included. Let me
take that back to the Agency.
Chairman STARK. Okay. One other question. You were kind
enough in past testimony and at request to provide us with a
lot of information about why people were turned down.
It was as near as I could tell missing in your written
testimony this morning. This would be those who fail and why do
they fail, asset tests, incomplete application.
Do you have those figures currently and could you submit
them to us?
Ms. DISMAN. I have the results where I think Acting
Commissioner McMahon sent you a letter on what our 1,000 case
study showed. We do have a report that will be coming out
shortly that is being done by our Office of Policy that will
have more longitudinal kind of information. Certainly, when it
is available, sir, we would be delighted to share it.
Chairman STARK. When you say ``shortly,'' will that be here
in time to be included in the record of this hearing, do you
suppose? In the next week or so?
Ms. DISMAN. Let me just check, sir.
Chairman STARK. As I say, you have done it in the past and
it was very helpful to us to know whether it was income limits
or asset tests, what was the bigger barriers to approval. That
would be useful information. I appreciate that.
Mr. Doggett, would you like to inquire?
Mr. DOGGETT. Yes, Mr. Chairman. First, I would ask
unanimous consent to include a copy of the Inspector General's
report that I have referred to in the record.
Chairman STARK. Without objection.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. DOGGETT. Mr. Kocot, referring you to that Inspector
General's report again, it was sent to the Acting Administrator
for whom I understand from your testimony you are a senior
advisor, on November 17, 2006. That is almost four and a half
months ago.
If I understand your testimony, since that time, CMS has
not recommended the legislation that the Inspector General
recommended, correct?
Mr. KOCOT. We have not.
Mr. DOGGETT. In fact, until this week, you did not bother
to even contact the Internal Revenue Service about it.
Mr. KOCOT. I do not know if that is true or not, sir.
Mr. DOGGETT. You are not aware of it in your role as a
senior advisor to the Administrator?
Mr. KOCOT. I am not aware of conversations we had, specific
conversations we had with IRS on this specific topic, no.
Mr. DOGGETT. The recommendation of the Inspector General
said ``Legislation is needed to allow CMS and SSA to more
effectively identify beneficiaries who are potentially eligible
for the subsidy The identification of these beneficiaries will
allow for more efficient and effective targeting of outreach
efforts. Access to IRS data would help CMS and SSA identify the
beneficiaries most likely to be eligible for the subsidy.
Specifically IRS earnings data would help identify individuals
who meet the income threshold for eligibility. This type of
data sharing already occurs under the Medicare Secondary Payor
program.''
Since getting that recommendation, as I understand your
testimony, you do not have the level of enthusiasm for this
recommendation that Ms. Disman voiced, but you do not think
that it would be harmful to have that information.
Mr. KOCOT. We are concerned about the privacy aspects of
sharing this magnitude of data and this amount of data for the
benefit that it will bring. I think we have had these privacy
concerns for some time now.
I believe in the letter sent back to you, Ms. Norwalk even
expressed those privacy concerns.
Mr. DOGGETT. You have been offered an opportunity to
evaluate specific legislative ways of addressing and protecting
those privacy concerns, but as late as 6:00 last night, on that
and on the other provisions that are contained in the
legislation that I presented today, you have declined to
comment specifically on any of those provisions, have you not?
Mr. KOCOT. I have not personally, sir. With regard to the
IRS----
Mr. DOGGETT. You were involved in a phone call
conversation----
Mr. KOCOT. Yes, I was; last night.
Mr. DOGGETT. Responding to my letter of about a year ago
that occurred finally last night, and CMS declined to respond
on any of the provisions of the bill.
Mr. KOCOT. No, that is not accurate. I was in that
conversation. We had a long discussion about the utility of
using the IRS data, which my understanding----
Mr. DOGGETT. CMS declined to discuss any of the other
provisions.
Mr. KOCOT. I think we said we were not prepared to discuss
it.
Mr. DOGGETT. Yes, sir. You were not prepared almost a year
after the legislation was introduced, after it was forwarded to
you, after we had meetings, after we sent it to you in advance
of the telephone conversation, and indeed, you are still not
prepared to discuss the other aspects of the legislation this
morning, as you have declined to do in your testimony.
Mr. KOCOT. Are you answering my question?
Mr. DOGGETT. No, sir. I am asking you if that is not true,
you have declined to do it in your testimony.
Mr. KOCOT. That is not true.
Mr. DOGGETT. You have not addressed any of the aspects
other than in response to questions in that legislation. In
fact, your ten pages of testimony praising the Agency for its
good work devotes two summary paragraphs of conclusions about
your desire to work together in the future, but does not
respond to any of the details of the legislation.
Mr. KOCOT. As I began to say, we are not prepared yet to
respond to your legislation. One of the major points that you
raised is expanding or doing away with or altering the asset
test. That has a cost associated with it. We have gone to our
actuaries and asked for an estimate of what that cost would be
so we could further engage in a more meaningful discussion with
you about this.
We have not received word back from them. We are not trying
to avoid your legislation or avoid you, sir. We want to be
prepared when we have a discussion on specific provisions.
Mr. DOGGETT. You are still saying today, sir, that you have
had great success in reaching the low income beneficiaries, and
it is correct that you have near 100 percent on the dual
eligibles who were automatically enrolled or facilitated
enrollment for extra help, but with reference to the people who
had to enroll themselves, you predicted that about 57 percent
of them would enroll and only 36 percent of them enrolled.
It reminds me a little of the fellow who is standing with
one foot on the embers and the other foot on a block of ice and
thinks on the average things are just about right.
You have done fine where you had automatic enrollment, but
for the other people, the record has been very modest. This
would be one thing if we were talking about matters that were
not critical to the life saving prescriptions, pain reducing
prescriptions, but frankly, I find the lack of responsiveness
not only to me and the 140 some odd members of this Congress
that asked you to respond to us, but to the Inspector General's
recommendation, a Republican appointee, from November, to not
get any more responsiveness than we have gotten, it does not
surprise me there are over three million people that are poor
people in this country that are not getting the benefits they
need.
As Members of Congress, we cannot get a timely complete and
thorough response, and only get indifference and delay, and
what some might call deceit, it is no surprise that poor people
are not getting treated fairly under this legislation.
I yield back.
Mr. KOCOT. May I respond?
Chairman STARK. Please.
Mr. KOCOT. I will point out, sir, that compared to other
public programs, some programs have been around for more than
40 years, this program, even if you take away the dual
eligibles, which I do not think is fair in terms of evaluating
our treatment of this program and the LIS, frankly, 38.7
percent of those dual eligibles do switch plans.
We do have to track them. We do have to keep them in the
program. We do have to make sure they are serviced the way they
need to be, so we treat the LIS population as one population.
We do not segment them out the way you are.
Even if you do and you take between 40 and 60 percent of
them are in, compared to Medicaid, the GAO has said that
Medicaid right now is a 66 to 70 percent participation rate.
The SCHIP program, 44 to 51 percent. Temporary assistance for
needy families, 46 to 50. SSI, 63 to 73 percent. Head Start, 44
to 54 percent. Food stamps, 46 to 48 percent. Housing vouchers,
13 to 15 percent.
By any measure, in the second year of this program, sir, I
think we are doing well. We have a lot more to do. There is no
one debating that. This is not CMS issue. It is not an SSA
issue. It is not a Congressional issue. This is an American--it
should be an American priority to get these people in.
That is something that all of us have to do. That is why we
are reaching out to the communities. That is why we are going
very deep into the communities. That is why we are going to
minority organizations.
We have a lot more to do, admittedly. We will continue to
bang away at this. It is not going to happen in the first year
of a program.
Chairman STARK. Mr. Camp?
Mr. CAMP. Thank you, Mr. Chairman. I appreciate Mr. Doggett
is very much an advocate for his legislation. Frankly, we have
not even been able to get CBO to respond with the costs.
I would urge you to work on CBO, and once we get the costs,
I think it is something we certainly want to evaluate. I think
you are correct in you cannot go out front until we know what
this is. We have very tight budgets all the way around. We have
new PAYGO rules.
We all know the difficulties Medicare is in, particularly
with the wave of baby boomers retiring that costs are spiraling
up and up. Obviously, we want to reach out to people who are
entitled to the program.
I think frankly on Part D, the outreach has been
commendable. I want to thank so many of the workers in the
Social Security Administration who were there at my town
meetings, who met--as you said, Ms. Disman, you do meet one on
one with individuals, and really helped facilitate that.
I think last year there were difficulties with the
automatic enrollment, particularly on Part D. Many of those
have been corrected. I am glad to hear in terms of the
testimony that you feel much more confident about those who are
having withholding in Social Security, that if they change
plans, it will be handled in a much easier way.
We cannot just evaluate the efficacy of a proposal without
also looking at its cost. Once we get that, I hope we can have
a meaningful discussion about it.
I appreciate the Chairman's time. Thank you.
Chairman STARK. I wanted to just try this. Mr. Kocot, I
think I have heard you mention 15 times this morning in regard
to MSP that you felt because it was a joint state/Federal
program, there were certain things you could not do. Is that a
fair assumption?
We are going to hear shortly from a Ms. J. Ruth Kennedy,
who is involved with the Louisiana Department of Health and
Hospitals. Have you read her testimony by any chance?
Mr. KOCOT. I have not.
Chairman STARK. Let me just see if you would stipulate, and
you can come back at me if I am really wrong, but Louisiana has
done a bang up job of enrolling people, and from what I can
gather, doing all the things right to get out there and get
people enrolled in these programs.
What would be wrong with CMS requiring certain procedures
in all states, so they could come up to the level of Louisiana?
Mr. KOCOT. Any such requirement will have a cost to the
states. I am not ready to tell you whether or not that is a
good idea because I do not know what that cost would be.
Chairman STARK. What if you paid for it?
Mr. KOCOT. Again, I do not know what the costs would be.
Chairman STARK. What you are saying is there is a cost for
providing health care to poor senior citizens beyond which you
do not think it is right to go? Is that what you just said?
Mr. KOCOT. No, that is not what I said.
Chairman STARK. That is how I would interpret it.
Mr. KOCOT. No. What you are saying is----
Chairman STARK. Let me put it this way. Is there any cost
too great that would prevent us from seeing that poor senior
citizens get proper medical care?
Mr. KOCOT. I believe that senior citizens should get the
appropriate care that they need and deserve.
Chairman STARK. Regardless of the cost?
Mr. KOCOT. No. Whether or not we can reach all these
beneficiaries, it has a cost associated with it, we know there
is a diminishing return and more expense associated with
getting----
Chairman STARK. You are going to suggest to me that the
only reason to not require the states to take certain steps is
it might cost the states something; right?
Mr. KOCOT. No. I am talking about effectiveness. If the
states are not going to be as effective with more money, is it
worth spending more money to have them have the same level of
effectiveness, I think is the appropriate question.
We have determined that reaching these beneficiaries, there
is a stigma with state Medicaid offices. We have a lot to do on
this. Just throwing more money at the states is not necessarily
going to get----
Chairman STARK. That is not what I said. Requiring the
states to follow certain procedures, which is certainly
traditional, when they are getting assistance from the Federal
Government, what would be wrong with that?
Mr. KOCOT. I would have to see the procedures first before
I could comment on what specifically you are referring to.
Chairman STARK. Let's say they are as good as Louisiana's.
Would you accept theirs?
Mr. KOCOT. I would commend Louisiana for doing a good job,
and again, I am not familiar with their program. Whether other
states have the wherewithal or whether they want to put the
priority into this, that is really a state by state
determination.
Chairman STARK. No, it is not. There is nothing wrong with
the Federal Government requiring the states to do certain
things when they are in the best interest of seeing our
programs succeed, and when we are paying the majority of the
funds. That is pretty traditional.
I would be glad to yield. Go ahead.
Mr. DOGGETT. Mr. Kocot, we have tried to work with CMS for
a year. We have written letters. We have asked questions
politely and not so politely at hearings. We now are in a
situation a year later where as you say, you have actuaries,
but we still do not have a response on the details of
provisions in this bill from CMS.
We are five months after an Inspector General made a
recommendation. We do not have really a response from CMS on
that recommendation.
We have you testifying that you are satisfied that although
CMS has enrolled, on those it self-enrolled, about 60 percent
fewer people than you estimated you would enroll, that is good
enough.
I think that demonstrates the problem that we have. We
welcome your further response on any of the details. I am
interested in a cost-effective system, as I said in my
testimony. I want it to be cost effective. I know we have
limitations here.
Having the input from the agency about cost effectiveness
and about a targeted effectiveness to reach the people that
need this help is critical. We are talking about people that
have died, that have suffered because they are not getting
extra help. They are not getting any help.
According to your own estimates, well over three million
people. I know we will never sign up every single one of them.
We can do a heck of a lot better job than has been done to date
if we work together on it.
Mr. KOCOT. May I respond?
Mr. DOGGETT. Yes, sir.
Mr. KOCOT. I agree with you. Nowhere in my testimony will
you see that we said we have done good enough. Additionally, I
want to also correct something for the record because we did
send a letter back to you on February 12, 2007 where we
addressed using the IRS data, and we told you that we had
privacy concerns about it. It is not as if we have not
responded to that as well.
I do hope we can work together on this issue. As I said, I
think this is an American priority. It is not just an agency
priority. This involves a lot of other people, a lot of outside
groups beyond Government. We all have to work together if we
are going to achieve exactly what you are looking to do.
Mr. CAMP. Mr. Chairman, would you yield?
Chairman STARK. Yes.
Mr. CAMP. I just have one last question, and that is, Mr.
Kocot, are there any other ways to enroll low income
beneficiaries that you can suggest to us?
Are there any ideas that you might have? If not, if I am
putting you on the spot, please follow up in writing at some
point. If there are any other methods or ideas you have on how
we might try to enroll low income beneficiaries, it would help
the Committee a great deal to receive that information.
Mr. KOCOT. We actually have contracted with an outside
organization to look at that very question. What I would like
to do is pull some of our organizations who are closest to
these beneficiaries to get their recommendations. That is
really what we are talking about, going to the people who are
on the ground who are touching them on a day-to-day basis, who
these beneficiaries trust.
They do not necessarily trust Government, those of us in
Government. We do not necessarily have the best solutions.
Let us go back and talk with our partner organizations and
come back to you with some recommendations.
Mr. CAMP. If there are any existing programs that you might
highlight in that, I would be interested in hearing that as
well.
Mr. KOCOT. Will do.
Chairman STARK. Were you just referring, Mr. Kocot, to the
RTI contract?
Mr. KOCOT. Not specifically in answer to Mr. Camp's
question.
Chairman STARK. There is an RTI contract out there?
Mr. KOCOT. Yes, there is.
Chairman STARK. That was done in 1999, was it not?
Mr. KOCOT. 1999 or I think the results were in 2000.
Chairman STARK. When do you expect we will hear back on the
results of that contract?
Mr. KOCOT. I will have to get back to you. I do not know
what the status of it is.
Chairman STARK. It has been out there going on eight years.
It would be interesting to find out what you got for your money
and if you would share it with us, we would appreciate it.
Mr. KOCOT. I am familiar with some iterations of this, Mr.
Chairman. However, I do not know if there has been follow-up on
contracts and so forth.
Chairman STARK. It was not Bechtel?
Mr. KOCOT. I am sorry. I did not hear you.
Chairman STARK. I said it was not Bechtel with whom you
contracted for that report?
I want to thank the witnesses for your good humor and
patience with us this morning, and we look forward to some
results for helping poor people in the future. Thank you very
much.
I would like to now call the panel. Ms. J. Ruth Kennedy,
who I took the liberty of referring to earlier, who now is
going to prove she has one of the best programs in the country.
She represents the State of Louisiana Department of Health and
Hospitals in Baton Rouge.
Dr. N. Joyce Payne, a member of the AARP Board of
Directors, Ms. Patricia Nemore, from the Center for Medicare
Advocacy, and Ms. Emelia Santiago-Herrera, representing the
Moore Consulting Group of Orlando, Florida.
Ms. Kennedy.
STATEMENT OF J. RUTH KENNEDY, MEDICAID DEPUTY DIRECTOR,
LOUISIANA DEPARTMENT OF HEALTH AND HOSPITALS
Ms. KENNEDY. Chairman Stark, Ranking Member Camp, and
distinguished Members of the Subcommittee on Health, good
afternoon. My name is Ruth Kennedy and I am an Medicaid Deputy
Director for the Louisiana Department of Health and Hospitals.
I am responsible for Medicaid and SCHIP eligibility and
enrollment for our state. For the past seven years, we made a
concerted effort to increase enrollment in our Medicare Savings
Programs. By any measure, we have been successful.
Now that MSP enrollees are automatically eligible for Extra
Help with the Medicare prescription drug plan, these benefits
are greater than ever.
Since January of 2000, enrollment in the Medicare Savings
Programs in Louisiana has increased by about 43,000 people, and
for us, that represents a 44 percent increase.
I want to thank the Committee for the invitation to
highlight some of the strategies that have led to those
enrollment increases.
Increased enrollment in Louisiana is a result of three
things: Simplifying the application process, focusing on
retention once someone has enrolled, and third, aggressive
outreach. Outreach alone is of limited usefulness, we believe,
without changes in the application and renewal process.
For us, improving retention rates was essential, since many
people were having their MSP cases closed at renewal solely
because they did not return the paperwork. We now conduct ex
parte reviews. We use other systems to verify income and
resources, and workers can now complete that annual review by
phone without getting a signed application form.
Beginning in July, we intend to begin using the method that
Social Security used in 2006 to conduct low income subsidy
renewals for our MSP renewals. We are going to mail a letter
and request that enrollees contact us only if our information
is incorrect or their situation has changed.
This is because our administrative data shows that our MSP
cases are almost never closed at renewal because of an increase
in income or resources.
Keeping eligible people enrolled or plugging the holes in
the bucket is important, not only to increase our
participation, but to prevent what we believe is undue
hardship.
Someone who is closed at renewal is often not even aware of
it until several months later, when the direct deposit of their
Social Security check is about $280 less than they expected it
would be. That is because the back premiums that they owe are
automatically deducted. Then we get the calls.
Outreach is important because many people are unable to
navigate even our kinder and gentler bureaucracy.
Our Medicaid employees throughout the state, in our 45
eligibility offices, have been the backbone of our grassroots
efforts to increase enrollment. They live in these communities,
in towns where they conduct outreach, and they are creative,
imaginative, and passionate about what they are doing.
They believe that it is important and deserving of their
time and effort, and they manage their regular eligibility
caseload in addition to outreach.
We forged hundreds of partnerships in Louisiana with
community organizations, medical providers, social service
agencies, SHIP, and our local Social Security offices. These
MSP partners have made a major contribution to our success as
well.
Our outreach model is relatively low cost, but without some
funding for outreach, we could not have achieved the increases
in enrollment.
In 2002, we applied for and received a multi-year grant
from the Robert Wood Johnson Foundation. We have also received
through that grant valuable ongoing technical assistance from
the Center for State Health Policy at Rutgers University.
While our administrative costs have been relatively modest,
as you can imagine, we have seen a large increase in the
monthly bill for our share of Part B premiums, a 44 percent
increase in enrollment translate to a 44 percent increase in
our share on the payments.
More eligible getting help with MSP translates to more
eligible Louisianans enrolled in and getting Extra Help with
the Medicare prescription drug plan, and we think that is a
good thing.
Yet, we know for all our success, many eligible people
still do not realize that help through the Medicare Savings
Programs is available, or if they do, their perception is that
the application process is simply too onerous for them to try
to navigate.
We believe we have changed the reality, so now we continue
to work to change their perception so they can get this very
important benefit.
Again, I want to thank you for the opportunity to share our
experience, and I would be happy to answer any questions.
[The prepared statement of J. Ruth Kennedy follows:]
Prepared Statement of J. Ruth Kennedy, Medicaid Deputy Director,
Louisiana Department of Health and Hospitals, Baton Rouge, Louisiana
Chairman Stark, Ranking Member Camp and distinguished members of
the Health Subcommittee: Good morning. My name is Ruth Kennedy and for
the past seven years I have been a Deputy Medicaid Director for the
Louisiana Department of Health & Hospitals. In that position, I am
responsible for Medicaid and SCHIP eligibility and enrollment in our
State. During those seven years, we have made a concerted effort to
increase enrollment of eligible seniors and people with disabilities
into our Medicare Savings Programs. Most recently, one of the immediate
goals of Governor Kathleen Blanco's 2004 Health Care Reform Plan
included increasing participation of eligible but unenrolled persons in
the Medicare Savings Programs (MSP).
I want to thank the Committee for the invitation this morning to
share some of the methods and strategies that have proven successful in
substantially increasing enrollment in the Medicare Savings Programs in
Louisiana. In the period from January 2000 to April 1st of this year we
have seen enrollment in the Medicare Savings Programs increase by just
under 43,000 individuals, which for us represents a 44% increase. The
biggest percentage increases were in our Pure SLMB and QI-1 Programs:
161% and 401% respectively. I make mention of this because nationally,
the SLMB and QI-1 have lower take up rates than QMB.
Background
Louisiana first began to focus on increasing enrollment in MSP in
late 1999 in response to correspondence from CMS [at that time HCFA]
which urged states to take pro-active steps to increase participation
of eligible but unenrolled people into the Medicare Savings Program.
For MSP qualifying seniors and people with disabilities, the
current $93.50 increase in their monthly Social Security check
represents as much as a 17% increase in ``spendable'' dollars. Now that
MSP enrollees are also automatically eligible for Extra Help with out-
of-pocket costs and immediate enrollment into a Medicare Prescription
Drug Plan, the value of MSP participation is even greater.
The increase in enrollment in Louisiana has resulted from a
combination of administrative simplification and intensive, ongoing
outreach. Outreach alone is of limited usefulness unless both the
application and renewal processes are streamlined and simplified.
Application Simplification
Low literacy levels, poor eyesight, hearing impairments, memory
loss and other health care problems are barriers to enrollment which we
have identified and are working to mitigate. We designed a simplified
Application Form specifically for the Medicare Savings Programs,
eliminated the requirement for a face-to-face or telephone interview,
relaxed verification requirements, and we use less restrictive methods
when calculating countable resources. These are all options allowed the
States by CMS. Information and application assistance is readily
available through a widely publicized toll-free MSP hotline that is
manned by knowledgeable Medicaid eligibility professionals.
Focus on Retention
The annual renewal process has been addressed as well, since we
found in our State that many enrollees were having their cases closed
not because they were no longer eligible for MSP, but solely because
they did not return the required paperwork. We began conducting ex
parte reviews where possible, i.e., using our inquiry rights to other
systems such as Food Stamps to verify income and resources. When an ex
parte renewal is not possible, caseworkers can complete the review of
circumstances subject to change by telephone, without the need for a
signed renewal form. These procedures have resulted in less than\1/2\
percent of our enrollees having their case closed for failure to return
a renewal form.
Beginning in July, we are further simplifying MSP renewals by
adopting the technique used by the Social Security Administration to
conduct renewals for Low Income Subsidy. We will mail letters advising
enrollees of the income and resource information on our records and
request that they contact us only if our information is incorrect or
their income or resources has changed. Otherwise they need not do
anything. A careful review of our administrative data revealed that our
MSP cases are almost never closed at renewal because of increased
income or resources so we believe this is responsible public policy.
We know that keeping eligible people enrolled--or plugging the
holes in the bucket--is an important key to increasing Medicare Savings
Program participation. Reducing closures at renewal for purely
procedural reasons and simplifying the renewal process have resulted in
significant administrative savings for the Department as well. \1\
---------------------------------------------------------------------------
\1\ Summer, Laura Administrative Costs Associated With Enrollment
and Renewal for the Medicare Savings Programs: A Case Study of
Practices in Louisiana, 2004 http://www.statesolutions.rutgers.edu/
Reports/LA_CaseStudy_v1.pdf
---------------------------------------------------------------------------
Closures at renewal can result in undue hardship for this
vulnerable population. Persons closed at renewal are often not aware
that their case has been closed until they discover that the amount of
the Social Security check directly deposited into their checking
account is $280 less than anticipated. The retroactive and current
premiums due to SSA were automatically deducted.
Importance of Outreach
We have made substantial administrative changes. But the reality is
without help, many people in our target population are unable to
navigate even our ``kinder, gentler'' bureaucracy. The only way to
reach them is through intensive outreach and face-to-face interaction--
contact with them, but also with their sons and daughters, with their
grandchildren, with their nieces and nephews, with caring friends and
neighbors, and with sources of information they trust.
Community Partners
We have forged partnerships with hundreds of those sources of
information: SHIP outreach workers, the Social Security Public Affairs
Specialists in Louisiana, community organizations, medical providers,
and local social service agencies. They are valuable partners for
identifying and disseminating information to potential enrollees, many
who are homebound or live in rural areas. These local partners have
day-to-day contact with our target audience and have credibility and
the trust of their communities. We have found that the messenger is
very important. Our targeted population responds well to a
representative at the local Social Security Office, Council on Aging,
Meals on Wheels, their doctor, pharmacist, or home health provider.
Without question, the MSP partners we have engaged have been
instrumental in helping raise awareness and increasing enrollment.
Role of Medicaid Eligibility Employees
Medicaid eligibility employees who work in the 45 local Medicaid
eligibility offices throughout the state have spearheaded our MSP
community outreach efforts, logging literally thousands of hours. These
employees--caseworkers, supervisors, and managers--live in the cities,
towns, and communities where they are conducting outreach. They
understand the culture. They can identify those trusted sources of
information in the community and recruit partners. They have the
knowledge and experience to assist with application completion and
answer questions about MSP. Our eligibility offices have recruited
community partners, distributed and kept stocked MSP applications in
``Take One'' holders, given presentations about MSP, and conducted
special direct mail initiatives. They have raised awareness of MSP and
provided one-to-one assistance at hundreds of events and locations,
with much of the activity taking place after normal working hours and
on weekends.
This past month for example--April of 2007--some of the settings in
which our eligibility staff conducted MSP outreach were the Gusher Days
Festival in Oil City, a Walgreens Pharmacy in New Iberia, the Etouffee
Festival in Arnaudville, a community health center in Luling, the Delta
Music Festival in Ferriday, a Family Life Conference in Hammond, heath
fairs at places of worship in Baton Rouge and Monroe, and a senior
citizen's center in eastern New Orleans.
Our initiative to empower and provide opportunities for eligibility
staff to conduct outreach for the Medicare Savings Programs is the same
model we had earlier used beginning in late 1998 to increase enrollment
of children in our Medicaid and SCHIP Programs. Their performance has
greatly exceeded our (high) expectations. Our employees have
demonstrated a strong commitment to helping seniors and people with
disabilities who have limited income and resources. They have proven to
be creative, imaginative, and passionate about outreach and they
believe that what they are doing is important and deserving of their
time and effort. Staff engaged in outreach work tirelessly to maintain
their regular workload while also engaging in MSP outreach efforts. \2\
---------------------------------------------------------------------------
\2\ Sofaer, Shoshanna, Assessing the Louisiana State Solutions
Project, May 2006 http://www.statesolutions.rutgers.edu/Reports/
Shoshanna%20Brief.pdf
---------------------------------------------------------------------------
Funding MSP Outreach
The outreach model we have employed is relatively low cost. But
without monetary investment in outreach, we could not have achieved
increases of this magnitude Medicare Savings Programs enrollment. In
our case, funding for outreach as well as valuable technical assistance
was provided by the Robert Wood Johnson Foundation through a three year
State Solutions grant ($140,000 annually) and a subsequent, one year,
``post-Katrina'' grant. We were able to claim federal matching funds
for Medicaid administration (50% FFP).
With that funding we held annual conferences for staff involved in
MSP outreach at which they shared promising practices, heard from
national subject matter experts and networked with local MSP partners.
We purchased promotional items, which we found to be essential for
generating interest at our outreach events. We provided compensation to
employees for travel and for work performed outside normal working
hours and on weekends, we printed posters and flyers, we paid for radio
commercials, and we paid for follow up mailing to individuals
identified through the Social Security Administration's ``leads'' file.
I must acknowledge the Rutgers Center for State Health Policy
which, in conjunction with the State Solutions grant, provided
technical assistance, guidance, and support. They provided important
expertise and additional resources such as opportunities to network
with other States and organizations who are working to increase
enrollment in MSP
It is important to evaluate outreach activities to assure that we
are getting ``the biggest bang for the buck.'' We closely monitor the
number of phone calls requesting MSP information or an application and
the actual number of new applications received as well as enrollment
and retention trends in each geographic region of the State so that we
can quickly and make adjustments as needed.
Program Costs in Louisiana
While the costs for outreach have been relatively modest, the same
cannot be said for the impact of increased enrollment on the Medicaid
Budget. A 44% increase in enrollment translates to a 44% increase in
our budget for Medicare Buy-In, at the same time that Medicare Part B
premiums have been sharply increasing. Unlike regular Medicaid budget
cuts, in which reductions in payments to providers is an option, we do
not have the latitude to reduce our state match for the ``fixed''
Medicare Part B premium.
I previously alluded to the rapid growth in enrollment in our QI-1
program. In FFY 05, our QI-1 allotment was not sufficient to continue
enrollment beyond March. We were unable to enroll additional eligible
individuals for five months while CMS was working to get us a
supplemental appropriation.
Conclusion
We have found effective outreach for the Medicare Savings Programs
to be more challenging than outreach to enroll uninsured children. Our
target population is more likely to view government-funded programs
with fear and mistrust, and stigma is certainly a factor.
Nevertheless, largely as result of Louisiana's aggressive and
sustained Medicare Savings Program outreach and administrative
simplification initiative, 43,000 more Louisiana citizens with limited
income and resources are now receiving much needed help with Medicare
costs than received help in 1999. We had the infrastructure in place to
actively participate in outreach for the Medicare Prescription Drug
Program Low Income Subsidy and did so. Reducing the number of people
eligible for, but not enrolled in MSP has reduced the number of people
eligible for, but not enrolled in or receiving Extra Help with a
Medicare Prescription Drug Plan.
For all our success in connecting with and enrolling additional
people into these programs, we have reason to believe that thousands of
other people in Louisiana who would greatly benefit from enrollment in
MSP are not yet enrolled.
They still don't realize that help through the Medicare Savings
Programs is available. If they do, they're not aware that we have
simplified the application and requirements for enrollment. Their
perception is that the application process is onerous and that it is
highly unlikely that their application would be successful. We've all
heard the axiom ``perception is reality''. We've changed the reality
and we are working to change the erroneous perception--for the sake of
needy Louisiana citizens who qualify for, but are not yet enrolled and
receiving the benefits, of the Medicare Savings Programs.
Thank you for the opportunity to share with your our experience.
Chairman STARK. Thank you very much.
Dr. Payne.
STATEMENT OF N. JOYCE PAYNE, ED.D. MEMBER, AARP BOARD OF
DIRECTORS
Ms. PAYNE. Chairman Stark and Congressman Camp, I am Joyce
Payne of AARP's Board of Directors. Thank you for inviting us
to testify on the need to improve Part D low income subsidy and
other Medicare programs for people with limited incomes.
The ``extra help'' that LIS provides to those least able to
afford their drugs is one of Part D's most important features
and a key factor in AARP's continuing support. However, the LIS
program has a serious flaw, an asset test.
No one with even one dollar more than $11,710 in savings or
a couple with more than $23,410 can qualify. Because of the
asset test, the LIS application form is eight pages of daunting
and invasive questions that are difficult for people to answer.
That is a serious barrier, even for those who meet the asset
test's unreasonable limits.
Similar problems plague the Medicare Savings Programs,
known as MSPS, that help pay for other Medicare cost sharing
requirements.
As with LIS, millions of beneficiaries living on very
limited incomes are not getting the help they need from these
vital programs.
In addition, there is only limited coordination between LIS
and MSP, even though they serve primarily the same populations.
Beneficiaries enrolled in MSP programs are automatically
eligible for and enrolled in the LIS. However, Social Security
does not screen LIS applicants to see if they are also eligible
for MSP.
This is a serious missed opportunity, as MSP criteria in
several states are less restrictive than LIS criteria, and some
states have effectively eliminated the asset test altogether.
Thus, many who are eligible for the LIS under their states. MSP
rules are being improperly rejected because SSA only looks at
LIS criteria.
AARP believes there should be no asset test in Medicare. As
a matter of public policy, we should encourage people to save
for retirement, and to not penalize them for those savings.
AARP also believes that there should be full coordination
between the LIS and MSP programs.
Until the asset test is fully eliminated, there are interim
steps Congress can take to reduce the barrier it creates. AARP
supports the Prescription Coverage Now Act introduced by
Representative Lloyd Doggett. This legislation takes solid
first steps toward our goal of eliminating the asset test,
increasing enrollment, and improving coordination between LIS
and MSP.
This legislation would increase the asset test limits to
$27,500 for individuals and $55,000 for couples. This will
provide relief to millions of beneficiaries who truly need the
help LIS can provide.
Even those who did not oppose an asset test in Medicare's
drug plan agree that current limits are far too low. This
legislation would also streamline the LIS application. It would
authorize Social Security officials to use income data they
already have to target LIS outreach efforts more effectively.
It also would require SSA to screen LIS applicants for MSP
eligibility.
AARP is committed to working to enact this important
legislation, into law this year, and eventually completely
eliminate the asset test for both LIS and MSP.
We look forward to working with you. We look forward to
working on both sides of the House. We ensure that we will
continue to work to serve those populations that are most
vulnerable in America today.
We thank you for this opportunity.
[The prepared statement of N. Joyce Payne follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman STARK. Thank you, Doctor. Ms. Nemore.
STATEMENT OF PATRICIA NEMORE, CENTER FOR MEDICARE ADVOCACY
Ms. NEMORE. Good morning, Mr. Chairman, Mr. Camp, and Mr.
Doggett. Thank you so much for this opportunity to testify.
I am Patricia Nemore from the Center for Medicare Advocacy.
In our work, we are in contact daily with thousands of
beneficiaries and advocates around the country, and we are
aware of how important these programs are, which mean the
difference, and we know this from the literature and we know
this from our experience, they mean the difference for people
with LIS between going to the doctor or not for people with an
MSP benefit, and they mean the difference between getting your
prescription drug or walking out of the pharmacy without it
because the co-pay for your single drug is $500. These are
very, very important programs.
I want to focus on a particular aspect of this, but before
I do, I just wanted to highlight your comments at the
beginning, Mr. Stark, about the importance of the Medicaid
program for low income Medicare beneficiaries. This is truly
the place where the most low income beneficiaries get the other
health care they need that is not covered by the Medicare
program. While we have a lot of work to do with MSP and LIS, we
need to remember what an important part of the whole protection
for low income Medicare beneficiaries the Medicaid program is.
I want to just quickly tell two stories that I think
illustrate some points that have been made this morning with
respect to MSP and LIS.
My husband recently turned 65 and he had retired earlier,
was receiving Social Security, and he received his Medicare
card. With his Medicare card, he got something or other that
said if you do not want Part B, let us know, and we will not
take the premiums out of your Social Security check.
In contrast, if you are a low income disabled person with
emphysema in the State of New York, for example, because New
York's programs are not quite as enlightened as some other
states, and you got the same thing my husband got. You would
look at the premium and say, wow, that Part B premium is kind
of expensive, I only have $800 a month income.
I wonder if there is any way that I do not have to pay
that, you would look through your Medicare and You Handbook and
find references to three or four different pages which would
finally tell you to call 1-800-MEDICARE, which would tell you
to call your state agency, which would tell you to call your
local Social Services office, which would have not a single
word on any of its voice menu's about this program, so you
would not really know what to do.
If you found an office near you, you would go to that
office, wait for several hours, talk to someone who might not
know of the existence of the program because we know that
Medicare savings programs are not known, not only to
beneficiaries, but not known to a lot of agency people.
When you finally found someone who did know it, they would
tell you that you needed documents to prove your income and
your residence and your assets, and if you did not have those
documents, you would have to go home and find them and find a
way to copy them and mail them back.
If you did not mail them back, you would be terminated
because you had not completed the process.
For our middle class, better off Medicare beneficiaries, we
have a process of enrollment that is streamlined and easy. For
our sick, frail, less well educated, isolated, often not
English speaking beneficiaries, we have a process that is
incredibly difficult.
I would urge this Committee and the Congress and the
administration to think about ways that we can seek parity in
our process, so that low income people do not bear the brunt to
get the benefits that they need, that they are not bearing the
heavier burden than higher income people do.
One of the things that we have heard about today is that
Social Security does have some way of identifying low income
beneficiaries. Mr. Doggett's legislation would target that
better and make it more focused.
We know that Social Security sends letters to potentially
eligible beneficiaries. What we do not know is what the states
do with the data about potentially eligible beneficiaries. The
states are given those data. We know there is a little bump in
enrollment when people get those letters from Social Security,
which come once a year. We also know that if the states were
doing something with it, there might be a greater bump in
enrollment, and we have no information that I am aware of as to
how the states use those data.
We have heard the administration talk about sharing data
with the states from the LIS applications. We have no knowledge
about how or if states would use those data.
Louisiana has made a concerted effort to improve its
program. It is not necessarily in the interest of states to
increase their enrollments because it does cost them more
money. If we really care about getting beneficiaries into these
programs, we need to make them not bear the brunt of going
through these very, very complex processes.
Mr. Chairman, my written testimony has many recommendations
or suggestions for policy options, and I am happy to answer
questions or work with the Committee further.
Thank you very much.
[The prepared statement of Patricia Nemore follows:]
Prepared Statement of Patricia Nemore, Center for Medicare Advocacy
Mr. Chairman, Representative Camp, distinguished Members of the
Subcommittee. Thank you very much for this opportunity to testify about
the Medicare Savings Programs (MSP) and the Part D low-income subsidy
(LIS), programs that, together, provide extra assistance to low-income
Medicare beneficiaries for some or all of their cost-sharing in
Medicare Parts A, B, C and D.
The Center for Medicare Advocacy has a long history of serving
dually eligible Medicare beneficiaries in the state of Connecticut and
nationally. From our daily connection both with beneficiaries directly
and with their advocates around the country, we know firsthand about
the frailty of this population and the challenges they face getting the
health care they need. We know of the challenges of finding and
enrolling them in programs that make a huge difference in their access
to care.
The Center is grateful to the Committee for its oversight of and
legislative concern about these issues and to Mr. Doggett and Mr.
Altmire for the important pieces of legislation they have introduced,
H.R. 1536 and H.R. 1310, respectively, both of which we support.
I would like to begin my testimony with a story.
My husband turned 65 in the summer of 2005. He was reasonably
healthy at the time (and still is). A few months prior to turning 65,
he had retired and lost his employer-based health insurance. By filling
out a very simple form, he and I were added to my employer's insurance
for which we make a monthly contribution that is deducted from my
paycheck. Shortly before he turned 65, he received notice from the
Social Security Administration of his impending Medicare eligibility
with a simple form for him to complete, including a way to inform SSA
if he did not want Medicare Part B. My husband's switching to my
insurance and then enrolling in Medicare required almost nothing of
him; what was required could be done by mail and phone.
Contrast his story with that of a 58 year-old disabled New Yorker
with emphysema who we'll call Mr. Gonzales. Mr. Gonzales receives $800/
month in Social Security disability payments. After his 24-month
waiting period to be eligible for Medicare, he receives the same packet
of information that my husband received. The question about whether he
wants Part B is a hard one for him to answer because it costs $93.50/
month this year, nearly one eighth of his monthly income. Since he does
speak and read English, unlike many low-income Medicare beneficiaries,
he is able to read his Medicare & You Handbook and finds, near the
front, a reference to help paying health care costs on pages 63-70. On
page 63, he sees a reference to help paying premiums, discussed on page
67. On page 67, he sees that to get this help you have to have income
less than $1,123 (so he qualifies on that score) and resources of
$4,000 or less. He has a checking and savings account and a couple of
small life insurance policies and thinks the accounts don't add up to
$4,000, so he might be okay.
Mr. Gonzales follows the instruction to turn to page 90 to find out
how to apply and there is directed to call 1-800-MEDICARE to get the
number for his state Medicaid agency. When he calls the number, he is
directed to call his local Department of Social Services. When he calls
that number, none of the voice menu choices sounds like the right one
for information about help paying Medicare premiums, nor does it tell
him how to reach a live agent with his question, so he listens for
where the closest office is. He starts the voice menu over again,
because he hears one choice that tells him what documents to bring to
apply, although again, it does not speak specifically about help paying
Medicare premiums.
Mr. Gonzales decides to take his chances and go to the office,
which, fortunately for him, is only about 60 blocks away. He waits for
two hours before seeing a caseworker. The caseworker he finally sees is
not familiar with a program to help pay Medicare premiums, but, again,
luckily for him, a caseworker nearby overhears them and tells his
caseworker what to do. She asks what papers he has brought to document
his name, date of birth, home address, other health insurance and
income and resources (actually she is incorrect in asking him to
document resources, but she never heard of the program before so didn't
know that).
Mr. Gonzales realizes he has left some papers at home and asks how
he can get them to her. She says he can fax them, but he doesn't have a
fax machine, or he can copy them and send them to her. He leaves the
office; it is now late in the day and he is having trouble breathing.
He will go to a copying place tomorrow, if he is feeling up to it. If,
for some reason like illness or another emergency intervening, he fails
to send the papers back to her, his case will be closed for failure to
follow up. He is fortunate that he speaks and reads English because he
was able to find the program to help him, something that millions of
beneficiaries are not able to do. If Mr. Gonzales is found eligible for
benefits, he will have to requalify each year by completing forms and
documenting his income and resources again.
Mr. Gonzales' story is not nearly as complicated as those of other
low-income beneficiaries, who might be sicker, less literate, not speak
English, not have a telephone or in other ways be less able to find the
program and take the steps needed to enroll in it, but nevertheless, it
demonstrates the extreme demands placed on those attempting to qualify
for necessary benefits and support, often at a time when they actually
need health care.
Mr. Chairman and distinguished members, I ask that we make our
policy and implementation goals the creation of parity between
wealthier Medicare beneficiaries and low-income beneficiaries in ease
of enrollment in health insurance programs Right now, the burden is
much heavier on those who are poorer and sicker and far less able to
endure the rigors of complex processes.
Most of the rest of my testimony will suggest ways to move toward
that parity by expanding benefits and aligning eligibility rules of the
programs, by improving identification of and outreach to beneficiaries,
and by addressing enrollment challenges. I will also comment briefly on
issues that arise for beneficiaries who are enrolled in these programs
in using those benefits.
Medicaid
But before I talk about MSP and LIS, I want to remind us all that
the program that most comprehensively serves low-income Medicare
beneficiaries is Medicaid. Medicaid was passed in 1965 as a companion
to Medicare, in large part to act as a supplement to Medicare's
coverage for older people. More than 6 million Medicare beneficiaries
get, through Medicaid, such services as long-term care, dental care,
foot care, and eye care that are not available under Medicare. They get
Medicare Part B premiums paid for them. Until 2006, they got
prescription drugs from Medicaid. Now, their Medicaid status entitles
them to the full Part D low-income subsidy. Medicaid is the single
largest program of extra assistance to low-income Medicare
beneficiaries, serving more people with more extensive benefits than,
for example, Medicare Advantage plans.\1\ Its creation, early on, is a
recognition that Congress has long been concerned about assuring access
to care for this very vulnerable population.
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\1\ Edwin Park and Robert Greenstein, ``Low-Income and Minority
Beneficiaries Do Not Rely Disproportionately On Medicare Advantage
Plans: Industry Campaign to Protect Billions in Overpayments Rests on
Distortions.'' Center on Budget and Policy Priorities, April 12, 2007
at 2.
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Low-Income Beneficiaries and Other Programs to Help Them
Medicaid recipients and other low-income Medicare beneficiaries are
frailer, more disabled, higher users of health services, have less
education, and are more likely to be minorities, more likely to be
females, more likely to live alone or in an institution than better off
beneficiaries. Over the past two decades, beginning in 1986, Congress
has responded to their health care needs by creating programs to
increase their access to care. These are the programs we know today as
the ``Medicare Savings Programs'' (Qualified Medicare Beneficiary or
QMB, Qualified Disabled and Working Individual or QDWI,\2\ Specified
Low-Income Medicare Beneficiary or SLMB, Qualified Individual or QI)
and the Part D Low-Income Subsidy or LIS.
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\2\ The QDWI program, enacted in 1989, is little used and is not
part of the discussion in this testimony.
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Medicare Savings Programs
The Medicare Savings Programs are operated through state Medicaid
programs. The benefits are Medicaid benefits, paid for with federal and
state dollars, using each state's Medicaid matching rate for federal
financial participation. In determining eligibility for benefits,
states must use at least the federal standards for measuring income and
resources, but are allowed to be more generous. States differ in the
ways they choose to be more generous, if at all.
The salutary effects of Medicaid and Medicare Savings Programs on
low-income beneficiaries were noted by the National Academy of Social
Insurance (NASI) in its June 2006 report ``Improving the Medicare
Savings Program.'' \3\ NASI cites the Medicare Payment Advisory
Commission's (MedPAC) finding that while 23% of Medicare-only
beneficiaries report that they delay seeking medical care because of
costs, only 8% of those with Medicaid so report. Other research cited
by NASI finds that QMB enrollees, for whom Medicaid assumes
responsibility for all Medicare cost-sharing, are half as likely as
non-enrollees to avoid visiting a doctor because of concern about cost.
(NASI 2006)
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\3\ Report of the Study Panel on Medicare/Medicaid Dual Eligibles,
``Improving the Medicare Savings Programs,'' National Academy of Social
Insurance June 2006. http://www.nasi.org/
usr_docImproving_the_Medicare_Savings_Programs.pdf (last visited April
29, 2007).
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Despite the identified health benefits associated with these
programs, participation rates for MSPs have been abysmal (33% for QMB-
only, 13% for SLMB-only, according to the Congressional Budget Office
\4\). Barriers to MSP enrollment, which have been documented in
countless studies and reports over the past nearly two decades, include
health, literacy, language and transportation deficits of the target
population; lack of awareness of the programs on the parts of potential
beneficiaries, community-based organizations and agency workers; and
the complexity of eligibility rules and enrollment processes, including
requirements to report and document assets and, in some cases,
requirements, such as Mr. Gonzales experienced, for face-to-face
interviews with eligibility workers.
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\4\ Congressional Budget Office, ``A Detailed Description of CBO's
Cost Estimate for Medicare Prescription Drug Benefit.'' July 2004
http://www.cbo.gov/showdoc.cfm?index=5668&sequence=0 (last visited
April 30, 2007).
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Differences between the Part D Low-Income Subsidy and Medicare Savings
Programs
Part D's fully federal low-income subsidy and its implementation
were modeled on MSPs, with slight, but nonetheless significant,
differences. These differences, or non-alignments, make it difficult to
assure that low-income Medicare beneficiaries get all the benefits that
will best help them gain access to the health care they need.
Differences include:
LIS applications can be taken at both the state
Medicaid agency and at the Social Security Administration; MSP
applications are taken only at the state Medicaid office.
LIS applications can be submitted on-line; this is
true only in a few states for MSPs.
LIS applicants can certify to the truth of the
statements in their applications, without having to provide
documentation with the application; this is true only in some
states for MSPs.
LIS application process does not require a face-to-
face interview; a few states do for MSPs.
LIS income and resource counting rules are uniform
throughout the country; MSP rules vary by state.
LIS resource levels are higher than those of most
states' MSPs and the income level for the partial LIS subsidy
is higher than that of MSP in all but two states.
LIS does not count non-liquid assets such as vehicles
and equipment; MSPs vary by state.
LIS does not seek to recover benefits from the
estates of deceased beneficiaries; in some states, MSP benefits
are recovered.
LIS is effective the first day of the month in which
an individual expresses an interest in applying; the MSP QMB
benefit is effective only the first day of the month after a
beneficiary's eligibility has been determined; SLMB and QI can
be effective up to three months prior to the month of
application, if the beneficiary was eligible in those months.
LIS measures income against the poverty level for the
actual size of the applicant's family; MSPs in most states use
a measure of one or two person families only.\5\
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\5\ For a detailed discussion of these differences, see Patricia B.
Nemore, Jacqueline A. Bender and Wey-Wey Kwok, ``Toward Making Medicare
Work for Low-Income Beneficiaries: A Baseline Comparison of the Part D
Low-Income Subsidy and Medicare Savings Programs Eligibility and
Enrollment Rules.'' Kaiser Family Foundation May 2006.
It was hoped and perhaps expected by policy makers and advocates
that the streamlined enrollment process and higher income and resource
eligibility standards of the LIS would help overcome some of the
barriers that have plagued MSP enrollment over the years. Yet
enrollment numbers tell us something different. More than 3 million of
the estimated 13.2 million thought to be eligible for the low-income
subsidy have not applied for the benefit; indeed only 14% of those CMS
estimates are eligible for the benefit have enrolled through the
processes created for applying for LIS.
By contrast, nearly 8.5 million people, or 80% of those who were
receiving LIS in June 2006 received it because they are deemed eligible
by virtue of their enrollment in full Medicaid, a Medicare Savings
Program, or the federal income benefit, Supplemental Security Income
(SSI) and did not have to take any action themselves to get it. \6\
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\6\ ``Medicare: Prescription Drug Coverage Among Medicare
Beneficiaries,'' Kaiser Family Foundation June 2006. Source: HHS, June
14, 2006. www.kff.org/medicare/upload/7453.pdf (last visited April 28,
2007).
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This ``automatic'' enrollment, through deeming by virtue of
eligibility for another benefit, corresponds more closely to my
husband's experience of signing up for Medicare Parts A and B than it
does to Mr. Gonzales' experience of trying to get MSP benefits in New
York. In fact, we know that Medicare Parts A and B have among the
highest participation of any benefit programs (99% and 95.5%
respectively, according to one source \7\); eligibility for Part A is
automatic for most beneficiaries; for Part B, beneficiaries must opt
out if they do not wish to participate.
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\7\ Dahlia K. Remler and Sherry A. Giled, ``What Other Programs Can
Teach Us: Increasing Participation in Health Insurance Programs,'' The
Commonwealth Fund, May 2003.
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This knowledge suggests that while we might take many steps toward
improving participation rates, the ones that will be most effective are
those that put the least burden on the beneficiary, just as signing up
for Medicare placed little burden on my husband.\8\ This, in turn,
suggests a stronger federal role in MSP and expanded federal screening
opportunities for LIS, which I will discuss further.
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\8\ See National Council on Aging, ``Cost-Effective Strategies for
Finding and Enrolling Low-Income Medicare Beneficiaries in the Limited
Income Subsidy (LIS) And Other Key Public Benefits'' for discussion of
creative state strategies to reach across programs to identify and
enroll beneficiaries in low-income programs. Submitted as Appendix to
Testimony of Howard Bedlin before U.S. Senate Special Committee on
Aging, January 31, 2007. Copies are available through
[email protected].
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First, I would like to talk about program expansions and
modifications that will promote ease of enrollment.
Expanding Program Benefits
Make the Qualified Individual program (135% FPL) permanent and align
MSPs with LIS income levels.
The QI program, originally scheduled to sunset in 2002, has been
extended for short periods of time over the past five years. Each time
it is scheduled to end, states and beneficiaries suffer great turmoil
with the uncertainty of its existence. Congress, in setting the full
LIS benefit at 135% FPL, established that level as a minimum for full
benefits. MSPs should be amended to reflect that development in
Congressional thinking.
Several approaches have been discussed among advocates and policy
makers to achieve this. One is to roll the QI program into the SLMB
program, so that QMB would go to 100% FPL and SLMB would go to 135%
FPL. The 135% aligns them with the LIS full subsidy; the partial
subsidy would remain at 150%, with no corresponding MSP.
A variation on increasing SLMB to 135% FPL, suggested by NASI in
its 2006 report, is to increase QMB to 135% FPL so that those who
receive the full subsidy for LIS under Part D would also get full cost-
sharing assistance for Parts A, B and C. This approach is the most
logical one, again reflecting Congress recognition that people with
this amount of income need full benefit assistance, not merely help
with their Part B premiums, as SLMB provides. Under this approach, QMB
and full LIS would be aligned vis a vis income; SLMB might be expanded
to 150% FPL to align with the partial LIS.
Make QMB benefits retroactive to three months before application.
This is a relatively small change that could be very significant
for beneficiaries. Currently, QMB is the only Medicaid program that
does not provide retroactive coverage to three months prior to
application if the beneficiary was eligible during those months. In
fact, QMB coverage is available only beginning the month after
eligibility has been determined. The significance of this is that many
beneficiaries become aware of programs at the point of need (see NASI
study), i.e. when they are using health benefits. They will need the
benefit to pay for the services they are receiving; if it cannot be
granted with retroactive coverage, it is less valuable to them.
Expand and align, or eliminate the assets test.
For years, advocates and researchers have identified assets tests
as a barrier to benefits for several reasons.\9\ To meet the test
itself, beneficiaries must engage in time consuming and sometimes
complex documentation of the value of various things they own, from
bank accounts to vehicles to other property, other than their home.
This process results in administrative costs to agencies processing
applications and can result in beneficiaries being denied, not for
being over assets but for failure to complete the process, such as
might have happened to Mr. Gonzales if he didn't get his papers back to
the caseworker. Moreover, some potential beneficiaries are unwilling to
divulge their assets to anyone and will forego benefits rather than
having to reveal the value of what they own.
---------------------------------------------------------------------------
\9\ For discussions of the effects of the asset test on Medicare
Savings Programs and on the LIS, see NASI, supra note 2, Thomas Rice,
PhD and Katherine A. Desmond, M.S. ``Low-Income Subsidies for the
Medicare Prescription Drug Benefit: The Impact of the Asset Test,''
prepared for the Henry J. Kaiser Family Foundation, April 2005; Laura
Summer and Lee Thompson, ``How Asset Tests Block Low-Income Medicare
Beneficiaries from Needed Benefits,'' The Commonwealth Fund, May 2004;
Laura Summer and Robert Friedland, ``The Role of the Asset Test in
Targeting Benefits for Medicare Beneficiaries,'' Commonwealth Fund,
October 2002; Marilyn Moon, Robert Friedland and Lee Shiry, ``Medicare
Beneficiaries and Their Assets: Implications for Low-Income Programs,''
Henry J. Kaiser Family Foundation, June 2002.
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As part of a program (such as MSP) whose income eligibility
increases each year with new poverty guidelines, the MSP asset test
(like those in other parts of Medicaid) is especially unfair because it
is not indexed. Thus, while income limits for 100% FPL have nearly
doubled since 1988 when the QMB program became mandatory ($5,770 in
1988 to $10,210 in 2007 for one person), the asset level has remained
the same over that 20 year period. Once again, Congress has finally
recognized the unfairness of an unindexed asset level; the LIS level
changes each year according to the Consumer Price Index.
The asset test excludes many low-income beneficiaries. In 2002,
researchers identified that 40% of all Medicare beneficiaries, not just
those with low-incomes, had assets less than $12,000.\10\ Other
research, reported the same year, identified that only 48% of those who
met the income requirements in effect that year also met the asset
requirements.\11\ Modest assets exclude many people from program
benefits: SSA found that about 40% of those who did not qualify for LIS
in 2006 were over assets, but the average total amount of assets of
those disqualified was only about $25,000.\12\ Most State programs for
pregnant women and children do not consider assets at all in
determining eligibility for help with medical care.\13\ Only six states
have eliminated the asset test for MSPs.\14\
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\10\ Moon, supra note 9.
\11\ Summer and Friedland, supra note 9.
\12\ Social Security Administration, ``LIS Denial Studies,'' 12/11/
06.
\13\ See ChipCentral chart on SCHIP eligibility at http://
www.chipcentral.org/_catdisp_page.
cfm?LID=121 (last visited April 28, 2007). See also Donna Cohen Ross
and Caryn Marks, ``Resuming the Path to Health Coverage for Children
and Parents: A 50 State Update on Eligibility Rules, Enrollment and
Renewal Procedures, and Cost-Sharing Practices in Medicaid and SCHIP in
2006,'' The Kaiser Commission on Medicaid and the Uninsured, January
2007 at http://www.kff.org/medicaid/upload/7608.pdf (last visited April
28, 2007).
\14\ AZ, AL, DE, ME, MS, VT. In addition, MN has raised its asset
limit to $10,000.
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The most streamlined way to proceed would be to eliminate the asset
test for both programs. This approach, coupled with increasing QMB or
SLMB to 135% of FPL would bring the two programs into closest alignment
and make cross-deeming easy and logical. Mr. Doggett's bill proposes to
increase the assets test to $27,500 for the partial subsidy. This
level, indexed, would capture many of those denied eligibility in 2006
due to being over assets. The bill includes changes to counting assets,
described earlier, to eliminate consideration of life insurance and of
retirement accounts. Such modifications will be important if the asset
test is not eliminated. Any asset test, however, retains the barriers
of administrative complexity and beneficiary reluctance to divulge
information. I know Mr. Doggett is aware of those limitations.
Closer alignment would, in turn, make screening and enrolling at
either a Medicaid office or a Social Security office more efficient and
effective.
Screening, Enrolling, and Deeming
Screen and Enroll. Mr. Doggett's legislation, H.R. 1536, includes
an important provision to expand screening: a requirement that CMS
inform all new Medicare beneficiaries of the Part D LIS and give them
an opportunity to be screened for the benefit, including through the
use of IRS data about income and assets. Mr. Doggett also proposes to
have SSA screen all LIS applicants for MSP eligibility. The next step
is to determine a streamlined way to enroll them.
Screen (and enroll when eligible) all SSI applicants. Even under
current law and program rules, the Social Security Administration could
screen for LIS and basic MSP \15\ all applicants (or at least those 65
and older) for SSI who are found ineligible for that benefit. While SSA
already does this screening for those who are Medicare beneficiaries,
some applicants may not have Medicare because they didn't ``earn'' it
through quarters of coverage and they cannot afford the Part B premium.
If they were found eligible for MSP, they could then get Medicare and
be eligible for Part D and deemed eligible for LIS. According to NASI,
SSA already screens for MSP eligibility, but it does not enroll
beneficiaries in those programs. It refers them to their state Medicaid
agency; advocates report that requiring this entire second process
makes it unlikely that beneficiaries will follow up. SSA's experience,
as reported by NASI, confirms this view. In addition to requiring
screening for unsuccessful SSI applicants, the law could be amended to
provide for automatic QMB eligibility for all SSI recipients.
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\15\ By basic MSP, I mean MSP based on federal rules, rather than
the varying more liberal rules used by the states. Such a screen and
enroll by SSA would capture many MSPs; those found ineligible through
this process could be referred to their states for further
consideration.
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Cross-deem. Under current law and implementation, all MSP
beneficiaries are deemed eligible for LIS without having to file an
application; the same is not true for LIS enrollees to receive MSP.
Even without the proposed expansions described above, Congress could
allow for cross-deeming that would improve enrollment in both programs
by assuring that whichever ``door'' to eligibility beneficiaries
entered, if found eligible for one program, they would also receive the
benefits of the other.
Avoid adverse consequences. Any process that deems or auto-enrolls
beneficiaries into a public program must include the assurance that the
beneficiary will be protected from losing other public benefits as a
result of the program. With respect to MSPs, this would require
amending the law to ensure that MSP benefits are not subject to
Medicaid estate recovery requirements, as they currently are at the
option of the state. With respect to LIS, a change in the law might
assure that so-called medically needy Medicaid recipients would not
cycle on and off Medicaid and the low-income subsidy from year to
year.\16\
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\16\ The plight of medically needy Medicaid recipients is
particularly complex and difficult with respect to Part D and the LIS.
The medically needy must show their state that they have accrued
certain medical bills before they are entitled to Medicaid. Once they
have accrued their ``spend down'' amount, Medicaid will pay the rest of
their health care costs for a certain period of time, usually between
one and six months. A medically needy person who met spend down at any
time in 2005 was deemed eligible for LIS for all of 2006. But if they
had met spend down in 2005 with high prescription drug bills, they did
not have those bills for 2006 because of LIS. So they may have lost
Medicaid in 2006 and thus not have been deemed for LIS for 2007. If
they do not know to apply for LIS, or if they do not qualify, they will
again have high drug bills in 2007, requalify for Medicaid and likely
then be deemed eligible for LIS for 2008 (at least, if they are on the
Medicaid rolls in the months that CMS looks at them to determine who
will be deemed eligible for LIS. This roller coaster eligibility for
Medicaid and LIS would be substantially mitigated, if not fully
resolved, if the amount Medicare pays for the LIS counted toward their
medically needy spend down.
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Other Steps to Improve Program Participation
Additional steps to improve enrollment and continued participation
might be categorized as:
Identifying/reaching out to beneficiaries and
providing help with applications, and
Simplifying enrollment and redeterminations.
Identify, Reach Out, and Help Beneficiaries
Advocates believe that potential beneficiaries could most
accurately be identified through IRS data; Mr. Doggett's legislation
proposes a one-time review of IRS data for current Medicare
beneficiaries to improve identification of low-income beneficiaries,
with a prospective use of the data, for new beneficiaries, only with
their permission. IRS data would more precisely target potential
beneficiaries who are, under current law, identified by SSA only by
reference to their sources of federal income (from Social Security,
Railroad Retirement, Civil Service and Veterans).\17\
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\17\ Section 1144 of the Social Security Act directs SSA to
identify Medicare beneficiaries potentially eligible for MSPs and LIS
and to communicate that information to those beneficiaries and to the
state in which they reside. The information upon which SSA makes such
determinations does not include non-federal sources of income, nor does
it include any estimate of resources.
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While it is important to notify beneficiaries of their entitlement
to benefits that can help them, experience tells us that a letter
informing individuals of a benefit and how to apply for it, without
more, has limited success. To the extent that beneficiaries must
continue to be faced with the challenges of navigating complex
eligibility rules and requirements, federal funds must be provided
either directly to the entities that are the ``trusted'' source for
specific hard to reach populations, or to states to provide grants to
such entities, so that those entities can help potential eligibles
apply for benefits. Congress, SSA and CMS should explore the
possibilities of providing private, non-profit beneficiary-oriented
``trusted sources'' with specific beneficiary identifying information,
by zip code to promote enrollments.
Simplify Enrollment and Redeterminations
Application
In-kind support and maintenance. The LIS application
asks for information about help the applicant gets from other
family members--what SSA calls In Kind Support and Maintenance
(ISM). The question is confusing and advocates report from
experience that clients often don't understand what is being
asked of them and give wrong answers that may disqualify them.
Moreover, the consideration of ISM in determining eligibility
provides a disincentive for families to help their members.
More than a third of the states have eliminated this inquiry
from their MSP eligibility considerations. SSA could probably
do the same under existing law through the Medicare Act of
2003's directive to it to create a simple application process.
Value of life insurance. Similarly, SSA asks
applicants to report the cash surrender value of life
insurance, an amount that is not known from the face value of
the policy. Advocates believe this question poses a stumbling
block, slowing down the application completion while the
beneficiary tries to figure out how to find out what is asked
of her or him. Moreover, research shows that about one-third of
people with incomes at the poverty level would be disqualified
because they have a life insurance policy above the allowed
amount of $1,500.\18\ Some states have eliminated this
requirement for MSPs; others allow a higher amount of life
insurance. SSA could probably eliminate this requirement for
LIS under existing authority; it has already exercised
discretion to modify the SSI rules to which LIS is linked by
not counting non-liquid resources. Mr. Doggett's bill would
eliminate consideration of life insurance for LIS; it would
also eliminate consideration of retirement accounts in
determining eligibility. This provision creates parity between
those whose retirement benefits are through a company pension
program (value not counted for LIS) and those whose benefits
are primarily from an Individual Retirement Account or a 401(k)
type account (value counted for LIS). While states are free to
eliminate consideration of both of these resources, they are
not required to do so. Better aligning MSP and LIS would
require legislation addressed to this issue for both programs.
---------------------------------------------------------------------------
\18\ Laura Summer and Lee Thompson, supra note 9.
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Attestation under penalty of perjury. While SSA's LIS
application does not require documentation of the information
provided, its attestation clause is overly precise and
frightening. It suggests to applicants that if they make an
honest mistake, or forget to include some requested
information, they can go to prison. This language should be
softened.
Authorization of information sharing between SSA and
states. Currently, SSA plans to send brief identifying
information about LIS applicants to states to allow them to
screen for MSP eligibility. But the information to be provided
is not precise enough for the state to determine eligibility
without finding the potential beneficiary. SSA's LIS
application could include a check off box by which the
applicant authorizes SSA to share details of the application
with the state so the applicant can be screened for other
benefits.
Eliminate Estate Recovery for MSP Benefits
Nearly half the states require recovery of MSP benefits from the
estates of deceased beneficiaries; federal law authorizes but does not
require this. Estate recovery has long been identified as a barrier to
enrollment for MSPs. Its elimination would promote greater interest in
the benefits and make various automatic enrollment opportunities more
salient. As noted above, it is essential to make this change if
beneficiaries are automatically enrolled in MSP programs through other
connections.
Redeterminations
The law requires the Commissioner of SSA to re-determine
eligibility for the subsidy at least once after initial determination
and after that, as he determines necessary. Advocates encourage
programs to use processes that require the least amount of response
from a beneficiary. SSA sent beneficiaries letters asking them if their
circumstances had changed and if not, they were not required to do
anything more. Once the initial redetermination is completed, SSA might
consider, as it has authority to do, requiring nothing more of
beneficiaries than that they report changes in circumstances.
Additional paths exist for requalifying for LIS can be confusing,
especially for those whose circumstances fluctuate over the course of a
year. Those who were deemed eligible for LIS--that is, those who are
also enrolled in Medicaid, a Medicare Savings Program, or SSI--were re-
deemed for 2007 if they were on the rolls in one of these programs in
July of 2006. If they had been eligible earlier in the year, but not in
July, they were informed they would not be deemed again and sent an
application to apply for LIS through SSA. If they became eligible
through Medicaid, MSP or SSI later in the year, they were once again
deemed. So much moving in and out of deemed status, and having
applications pending results in errors in plans' and pharmacies'
knowledge of the correct cost-sharing to apply to beneficiaries. This,
in turn, results in beneficiaries being unable to get drugs because
they cannot afford the non-LIS co-pays charged.
When a Medicaid beneficiary loses eligibility for Medicaid
benefits, states have an obligation under Medicaid law to determine if
that person is eligible under another category of the state's program.
For example, someone losing Medicaid eligibility might, nonetheless,
still be eligible for a Medicare Savings Program, since these income
and resource limits are higher than Medicaid in most states. If states
routinely undertook these new determinations of eligibility for other
Medicaid benefits before terminating people from the program, fewer LIS
recipients would find themselves in the limbo of not knowing about
their LIS status. Similarly, even for those individuals no longer
eligible for any benefits under the state Medicaid program, the state
or the Social Security Administration (SSA) could undertake
independently to determine their eligibility for the LIS, the income
and resource limits for which are higher than those of most states'
Medicaid programs.
CMS could remind states of their obligation to screen for
eligibility for other Medicaid programs when a recipient loses Medicaid
in one category and monitor their compliance. Congress could amend the
law, if necessary, to require states to undertake independent
determinations of LIS eligibility when a beneficiary loses benefits
under the state Medicaid program.
Making the Benefit Better for Those who are Enrolled
While I know the Committee's focus for this hearing is on
opportunities to increase enrollment and expand eligibility, it is
impossible for me not to talk about ways to improve the benefits
themselves, both so that they are perceived to be valuable and so that
they are valuable. Three areas warrant particular attention:
Failure of LIS co-pay information to be available at
the pharmacy
Lack of clarity about whether and how states pay
cost-sharing for QMBs in Medicare Advantage plans and
Lack of clarity about Medicare providers' obligation
to serve QMBs without charging them cost-sharing or balance
billing.
LIS Fails To Be Available at the Pharmacy Counter
Too often low-income beneficiaries with full LIS arrive at the
pharmacy to discover that the pharmacist does not have access to their
correct co-pay level. Some of these beneficiaries take 20 medications,
or have co-pays for one prescription of over $500. They often leave
without the medication(s). The lucky ones find advocates who will work
the system for them and get the problem corrected. Even ``corrected''
problems are sometimes only corrected for the transaction at hand; the
same problem occurs when the beneficiary seeks to fill another script.
The failure of LIS eligibility and co-pay level to be available at
the pharmacy is among the most common complaints we hear both directly
from beneficiaries and from advocates around the country. It happens in
part because of the lack of real time information exchange among all
parties to a Part D transaction for low-income beneficiaries: states,
CMS, SSA, the Part D plan and independent contractors who track LIS
information. It also results from plans' failure to follow CMS policies
which direct them to use the best available information to determine
proper cost-sharing amounts.
There Is a Lack of Clarity About Whether and How States Pay Cost-
Sharing for QMBs in Medicare Advantage Plans
CMS policy directs that states pay copayments for QMBs in Medicare
Advantage plans.\19\ But states do not necessarily have systems to
fully identify all the benefits in the plan in which a QMB is enrolled,
nor do they all have systems for paying either the plan or the plan's
providers any copayments required under the plan.
---------------------------------------------------------------------------
\19\ DHHS, Health Care Financing Administration, Medicaid Letter
Number: 00-09, Subject: Medicaid Obligations to Pay Medicare Cost-
sharing Expenses for Qualified Medicare Beneficiaries in Medicare
Health Maintenance Organizations or Competitive Medical Plans or
Medicare Plus Choice Organizations--INFORMATION. August 2, 2000.
Available from pnemore@
medicareadvocacy.org.
---------------------------------------------------------------------------
Correcting this lack of clarity and oversight for QMBs in MA plans
will improve the benefit for all such individuals. It will also
mitigate the damage done by marketing scams where agents of health
plans go door-to-door at senior housing facilities to solicit
enrollment in MA plans, enroll beneficiaries with diminished capacity
or limited English proficiency, or enroll beneficiaries in an MA-PD
when they wanted to enroll in a PDP. Under such circumstances, low-
income beneficiaries end up in plans they did not intend to choose.
Moreover, we know that, while MA plans purport to provide better and
more benefits than original Medicare, their relative value depends in
large measure on what services are used. We know of plans, for example,
that have $90/day co-pays starting at day 4 of a skilled nursing
facility benefit; under original Medicare, by contrast, days 1-20 have
no cost-sharing at all. Some plans charge 25-30% coinsurance on Part B-
covered drugs, which are often expensive. Such a coinsurance would be
unaffordable to someone with $850/month income, as a QMB would have.
Cost-sharing assistance would be critical to making the benefit work.
CMS must assure that states have systems to identify QMBs in MA plans
and to pay their cost-sharing.
There Is a Lack of Clarity About Medicare Providers' Obligation To
Serve QMBs Without Charging Them Cost-Sharing Or Balance
Billing.
Medicare does not permit providers to pick and choose for which
Medicare beneficiaries they will bill Medicare and for which they will
bill privately. If they take care of a patient with Medicare, they must
bill Medicare and can bill the beneficiary only the remainder up to the
Medicare allowed amount. For a person with QMB, the beneficiary's
portion is paid by the state, or in some cases, not at all. It is not
the responsibility of the person with QMB. CMS policy, however, seems
to permit providers to decide that they will serve a person with QMB as
a private pay patient and not bill Medicare at all.\20\
---------------------------------------------------------------------------
\20\ State Medicaid Manual, Part 3 Eligibility Section 3490.14 B at
http://www.cms.hhs.gov/Manuals/PBM/
itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=
ascending&itemID=CMS021927& intNumPerPage=10 (last visited April 23,
2007).
---------------------------------------------------------------------------
This policy, together with a provision of law that permits states
to forego paying the person with QMB's share of cost-sharing if the
state's Medicaid payment for the same service is less than what
Medicare has paid has resulted in people with QMB being denied access
to health care providers, according to a federally-mandated study
released in 2003.\21\ Perhaps Congress could direct CMS to correct its
policy of allowing providers to bill people with QMB as private
patients; such action would promote greater access to health care
providers for people with QMB and make the benefit more valuable.
---------------------------------------------------------------------------
\21\ Report to Congress, State Payment Limitations for Medicare
Cost-Sharing, Tommy G. Thompson, Secretary of Health and Human Services
2003, transmitted by letter of May 20, 2003 to Speaker of the House of
Representatives, J. Dennis Hastert.
---------------------------------------------------------------------------
Conclusion
In summary, we recommend that Congress expand the benefits, make
the enrollment processes easier, with greater emphasis on deeming and
other nearly automatic methods of enrollment and promote improved
implementation of both programs, so that low-income beneficiaries can
actually use the benefits once they are enrolled.
I thank the members of this Subcommittee for an opportunity to
speak on behalf of the Center for Medicare Advocacy and the thousands
of beneficiaries we represent. I look forward to working with you
further on these important matters.
May 3, 2007
Appendix
Medicare Savings Programs (MSPs)
Basic Subsidy Eligibility:
Qualified Medicare Beneficiary (QMB). Income at or
below 100% federal poverty level (FPL) ($10,210/year in 2007);
resources at or below $4,000/individual or $6,000/couple.
Specified Low-Income Medicare Beneficiary (SLMB).
Income at or below 120% FPL ($12,252/year in 2007); resources
as QMB.
Qualified Individuals (QI). Income at or below 135%
FPL ($13,784/year in 2007); resources as QMB.
Indexing: Income levels change each year when federal poverty
levels are announced between January and March; states must use the new
levels by July 1. Asset levels are not indexed.
Income/Resource Counting Rules: Start with rules for Supplemental
Security Income program, but states, under a statutory provision known
as 1902(r)(2), can use more liberal rules.
Enrollment Path: The State Medicaid Agency.
Payment: Federal and state dollars. MSP benefit is medical
assistance, eligible for the state's matching rate for federal
financial participation (FFP). FFP for administrative costs is 50%.
2007 Medicare Savings Program Groups
----------------------------------------------------------------------------------------------------------------
Year Income
Category Enacted Limit Resource Limit Medicaid Pays Entitlement
----------------------------------------------------------------------------------------------------------------
Qualified Medicare.......... 1988 100% 200% of SSI limit Part B premium; Yes
Beneficiaries (QMBs)........ poverty ($4,000/individual, Part A premium, if
$6,000/couple) any; all deductibles
and coinsurance
----------------------------------------------------------------------------------------------------------------
Specified Low-Income........ 1990 120% of 200% of SSI limit Part B premium; Yes
Medicare Beneficiaries...... poverty ($4,000/individual, only
(SLMBs)..................... $6,000/couple)
----------------------------------------------------------------------------------------------------------------
Qualifying Individuals...... 1997 135% of 200% of SSI limit Part B premium; No
(QIs)....................... poverty ($4,000/individual, only
$6,000/couple)
----------------------------------------------------------------------------------------------------------------
Chart Source: ``Report of the Study Panel on Medicare/Medicaid Dual Eligibles: Improving the Medicare Savings
Programs,'' National Academy of Social Insurance, June 2006
Medicare Part D Low-Income Subsidies (LIS).
Basic Subsidy Eligibility: Full subsidies for beneficiaries with
incomes at or below 135% of federal poverty levels (FPL) ($13,784/year
in 2007); resources up to $7,620/individual and $12,190/couple in 2007.
Partial subsidies for those with incomes at or below 150% of FPL
($15,315/year in 2007); resources of not more than $11,710/individual
or $23,410/couple in 2007.
Indexing: Income levels based on federal poverty levels announced
between January and March; increases retroactive to January. Asset
levels adjusted prior to January, based on the Consumer Price Index.
Income/Resource Counting Rules: Generally, those of Supplemental
Security Income (SSI) program.
Enrollment Paths:
Deemed status. For those who receive benefits of full
Medicaid (dual eligibles), Medicare Savings Programs (QMB,
SLMB, QI), or SSI.
SSA door. By application, through a local SSA office,
through the SSA toll-free number, or through the SSA website at
www.socialsecurity.gov.
Medicaid agency door. By application at the state
Medicaid agency. If a beneficiary applies for LIS with the
state, the state must also screen for MSP and other Medicaid
benefits.
Payment: Benefit is all federal dollars. When states enroll
beneficiaries, the states are paid at the Medicaid administrative match
rate of 50%.
2007 Low-Income Subsidy Groups and Costs
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Out-of-...................
Pocket
Costs
........................ Standard Group 1 Group 2 Group 3 Group 4
Benefit
Dual Eligibles MSP Income 135% Income 150%
(QMB, SLMB, FPL FPL
QI)
........................ Resources Resource
........................ SSI w/o
........................ Medicaid Below Below
........................ $7,620/$12,190 $11,710/$23,410
----------------------------------------------------------------------------------------------------------------
Premium Varies by plan $0 $0 $0 Sliding scale:
($27.35
national $0 up to
average in ``benchmark''
2007)
(Based on
income)
----------------------------------------------------------------------------------------------------------------
Deductible $265 per year $0 $0 $0 $53
----------------------------------------------------------------------------------------------------------------
Cost Up to $3850 Co-pays: $2.15/$5.35 co- $2.15/$5.35 co- 15% coinsurance
Sharing* out-of-pocket pay pay
$0 if ................
institutionalize
d
........................
$1/$3.10e 100%
FPL
........................
$2.15/$5.35>100%
FPL
----------------------------------------------------------------------------------------------------------------
Cata-
strophic..................
........................ Greater of 5% $0 $0 $0 $2.15/$5.35 co-
pay
or $2.15/$5.35
Coverage co-pay
----------------------------------------------------------------------------------------------------------------
* Individuals in the four LIS groups do not have the ``Donut Hole'' gap in coverage.
Chairman STARK. Patricia, thank you, and thank you for the
help you have provided to the Members of the Committee, for
advising us and enlightening us both today and previously.
Ms. Emelia Herrera? Did I pronounce that right?
Ms. SANTIAGO-HERRERA. Santiago-Herrera.
Chairman STARK. Welcome to the Committee. You have come a
long way. Why not just tell us what you would like to tell us
in any way you would like?
STATEMENT OF EMELIA SANTIAGO-HERRERA, MOORE CONSULTING GROUP,
ORLANDO, FLORIDA
Ms. SANTIAGO-HERRERA. First, I would like to thank you,
Chairman Stark, and the Ranking Member, Mr. Camp, and
Subcommittee members.
My name is Emelia Santiago-Herrera. I am from Orlando,
Florida. I am 81 years old, and I have 8 grown children and 54
great grand's and 18 great great grand's.
I have had five heart attacks and three strokes. I have a
lot of health problems and I need assistance. I am a low income
Medicare beneficiary and receive low income benefits. I am
enrolled in Medicare Advantage with prescription drug coverage
and receive the full Part D low income subsidy.
I received information from a neighbor of mine about
Evercare, although I did have the Medicare and You Handbook,
reading it myself, but there were so many things in there that
I could not decide which would be beneficial to me.
She said go with Evercare. I called Evercare. They sent two
people out to the house to talk to me. I decided to enroll with
them, which I have not regretted. I depend on them and I
appreciate everything they are doing for me.
They also have me with a disease management program and
their nutrition program assistance. They also send someone to
my house twice a week to help me clean and do errands for me
because I have no transportation.
They also give me advice on my diet, which I developed
diabetes in the last year. I also was told that I needed
diabetic shoes, which cost $50 an inch, which I could never
afford.
Evercare got me the shoes for nothing. They also help me
with a doctor who comes out to my house and does my nails
because I cannot go to a regular foot doctor.
Someone from Evercare also comes to my house and sees if I
am being treated right, at least every three months. They ask
me questions about the attitude, disposition and personality of
the person who comes to see me.
Since I am low income, all of the services I receive are a
blessing. I used to have to pay my doctor a co-payment and I
used to have to pay so much on certain types of medication that
were not over the counter, which I cannot afford.
I want to thank you all for letting me come here today and
try to explain some of the advantages that Evercare has given
to me, and I hope they can continue in the future.
[The prepared statement of Emelia Santiago-Herrera
follows:]
Prepared Statement of Emelia Santiago Herrera, Moore Consulting Group,
Inc., Orlando, Florida
Thank you Chairman Stark, Ranking Member Camp and Subcommittee
Members.
My name is Emelia Santiago Herrera and I am from Orlando, Florida.
I am an 81 year-old mother to 8 children, a grandmother to 54 children
and a great-grandmother to 18 children!
I've had 5 heart attacks and 3 strokes, so I have health problems
and need assistance. I am a low-income Medicare beneficiary and receive
low-income benefits. I am enrolled in a Medicare Advantage plan with
prescription drug coverage and receive the full Part D low-income
subsidy.
I received information about Evercare and other Medicare Advantage
plans in my ``Medicare & You'' Handbook. My friend told me to ``Go with
Evercare, they treat you with dignity and respect!'' I called to see
about enrolling in a plan and an Evercare representative came to my
house to discuss my different options and go over everything with me. I
then decided to listen to my friend's advice and enroll in an Evercare
plan. I have not regretted it, I love Evercare and appreciate all the
benefits I receive and depend on.
My Evercare Plan provides me with disease management, preventative
care and nutritional assistance. Evercare is available to take me to
the doctor 10 times a year, they give me diabetic shoes that would
normally cost $50 per inch, and a foot doctor comes to my house to clip
my toe nails to avoid complications with diabetes. Evercare goes
grocery shopping for me, and to help manage my diabetes, I have 14
meals delivered to my house every month. Someone from Evercare even
comes to my house to clean twice a week!
To top it all off, someone from Evercare comes and checks on me
every three months to make sure I am being treated well by the Evercare
representatives.
Since I am low-income, all of the services I receive are just a
blessing. I used to pay a $9 co-pay for my prescription drugs but now I
don't pay anything at all because of the extra help I receive. Even
though I am a low-income senior, they treat me like a queen and I don't
know what I would do without them and all the benefits of this plan! It
is for all of these reasons: disease management, preventative care,
nutritional assistance and especially the no co-pay, I don't have to
live in an assisted living home.
Chairman STARK. Thank you very much. I will start the
inquiry here. We may get called away again for about 15 minutes
if a vote comes up. I hope some of you will be able to stay, if
all of the members do not have a chance to inquire.
Ms. Kennedy, I am not sure I completely understand the
Louisiana Charity Hospital setup, but it has been suggested
that in some states, the governors are not too keen about
enrolling more people in these plans because it costs the state
something to enroll them.
That certainly would not be any of the governors you and I
know, because they are all kind-hearted folks.
In Louisiana, would they not, if they were not in the MSP
program, for instance, would they not become eligible for the
Charity Hospital program in Louisiana? In a sense, if you get
them into MSP, the state might save a little because the
Federal Government would pay part of that and it would not have
to be entirely born by the Charity Hospital, or is that not a
correct understanding of your state program?
Ms. KENNEDY. Chairman Stark, the major benefit of the
Medicare savings program is that we pay the Medicare Part B
premium, which in 2000, January of 2000, was $45.50. Now, it is
$93.50.
Whether or not someone gets their health care at one of the
safety net hospitals in Louisiana, their Medicare premium for
Part B coverage is $93.50.
Chairman STARK. You mentioned all the things you do, and I
am impressed by the increase that you have had. Do you have any
idea to help us? We have heard today people say they do not
want to impose costs on states.
Let's suppose that we said to Mississippi, you have to do
what Louisiana does, maybe they do, but let's just assume they
do not have as good a program as you do, what would you guess
it would cost the State of Mississippi just to increase their
efforts to enroll MSP people at the level you do?
Any idea how much we are talking about?
Ms. KENNEDY. I think as an indicator, I could use the
amount of the Robert Wood Johnson Foundation grant, which was
$140,000 annually for three years, and then we got an extension
because of Katrina and the issues with enrollment. The Robert
Wood Johnson Foundation gave us an additional year.
We were able to get Federal matching funds which parlayed
that $140,000 into $280,000. Also, that technical assistance
from the Rutgers Center for Health Policy, that kind of
technical assistance is helpful for states.
I might add, Chairman Stark, that a model that could be
used perhaps is the 1999 Ticket to Work legislation, set aside
money for states for administration, Medicaid infrastructure
grants they are called. They are not mandatory. States can
voluntarily apply for those grants and get help for outreach,
coalition building, to improve enrollment in that program and
the optional Medicare for Working People with Disabilities
program.
I know those grants vary from $500,000 annually to $1
million. These are administrative grants with no state match
requirement. Those are, I think, are an incentive for states.
Chairman STARK. Give me an idea, let's say, in round
figures, you have been spending $280,000, maybe $300,000 a
year, about how many people have you enrolled as a result,
would you guess, of that kind of revenue, with that kind of
expenditure?
Ms. KENNEDY. Of the 44,000--the annual mailing, even before
we got the grant in 2002, we had used the Social Security leads
file, but that identifies everyone who is a Social Security
beneficiary. It is just as the name implies, a leads file,
because it does not contain information about assets, about a
spouse's income, or other income other than Social Security.
There was a mailing in 2002 by Social Security that had
state specific information, the number in Louisiana to call,
and we got a surge there.
I think the estimate by the GAO was that there was a .9
percent increase as a result of that mailing in Louisiana.
Chairman STARK. I am just trying to figure out with this
$300,000 that you used, about how many numbers of people do you
think you signed up as a result of spending that money? Can you
make a guess?
Ms. KENNEDY. 40,000 over seven years.
Chairman STARK. 6,000 people a year.
Ms. KENNEDY. About 5,000 a year, as a result of outreach
and improvements in our system.
Chairman STARK. For $60 a head, you got people signed up.
Ms. KENNEDY. It would seem.
Chairman STARK. That is pretty good, is it not?
Ms. KENNEDY. Yes, sir.
Chairman STARK. I wonder why the Federal Government thinks
that would be so horribly expensive. It does not sound as
expensive as fixing Katrina, does it?
Dr. Payne, I just want to commend you and your organization
for pitching in here to help us. I have a suspicion that many
of the people that will be helped if we follow your suggestions
are not members of AARP. They probably do not have enough money
left over to take advantage of all the wonderful discounts you
offer the members in a variety of areas that your members can
participate in.
I do appreciate your outreach and your assistance and your
suggestions. I want to thank you for that.
Mr. Doggett, would you like to inquire?
Mr. DOGGETT. Yes. Thank you very much, Mr. Chairman. Ms.
Kennedy, I do thank you for your leadership and that of your
agency. I would hope that the Center for Medicare and Medicaid
Services could take some lessons from your success and
commitment there in Louisiana.
Ms. Santiago, I am particularly pleased that you are here
today because you are what this is all about. You had the good
fortune to be automatically enrolled in this program. You did
not have to go through a lot of hoops to get in it.
I believe that there are tens of thousands of seniors that
are out there just like you that need help with their feet,
that have heart medications, that have other needs, many of
them probably some of your friends, that are not even able to
come up to Washington as you have been able to do.
The reason that I am expressing such outrage this morning
about the indifference and the delay from the Centers for
Medicare and Medicaid Services is I am worried about those
people, that they are not getting any of the kind of help you
are getting.
When you come here today, you really demonstrate why we
need to act and why we need to force a bureaucracy that has
been indifferent and has delayed to get its job done, and that
is what we are trying to do.
Ms. Nemore, you have focused attention on some of the
practicalities of what happens when people go to apply for
benefits. One of the areas that I know you and Dr. Payne
support and your organizations support is what I propose to do
with reference to sharing Internal Revenue Service data, but
that is only one part of the bill.
Talk to our Committee a little bit about the application
process itself, and some of the things in the current asset
test as mandated by law, that we are trying to change, and how
they make it more difficult for a person like Ms. Herrera who
might want to apply and are not automatically enrolled, to get
the benefits that she got.
Ms. NEMORE. Yes. Mr. Doggett, I can speak to several very
particular things in the application that we believe could be
changed administratively, and then I would like to talk also to
your comment that Ms. Santiago-Herrera was automatically
enrolled.
There are several things on the application. One, there was
some conversation with the administration earlier about where
you get help from your family, what is referred to as in-kind
support and maintenance.
The questions on that in the application are confusing, and
we understand from advocates in the field that people often do
not understand exactly what is being asked in that question,
and they give incorrect--they give information that is not
really what is being asked, and that can disqualify them.
We believe that could be eliminated administratively
because while the Social Security Administration and CMS are
linked into the Supplemental Security Income program's rules,
they have deviated from those rules already, and they have
deviated in ways that are helpful.
Mr. DOGGETT. Has your Center asked them to do that
administratively?
Ms. NEMORE. Yes, we have.
Mr. DOGGETT. How long ago was that request?
Ms. NEMORE. We and many other advocacy organizations have
made those comments at every opportunity, before----
Mr. DOGGETT. Going back to 2003?
Ms. NEMORE. Yes, before the law went into effect.
Mr. DOGGETT. CMS has declined to do that so far
administratively?
Ms. NEMORE. That is correct. That pertains to counting
income, how you count income. Another piece that is commonly
referred to that pertains to how you count assets is a question
about life insurance.
Life insurance is again a confusing question because life
insurance is allowed if the face value of your policy is under
$1,500, but if it is over that, then you have to report the
cash surrender value. These are terms, when I was briefing your
staffs earlier this week, we realized that even among----
Mr. DOGGETT. Experts.
Ms. NEMORE. People who work on this all the time, that is
very confusing terminology, and the amount has been $1,500
since the beginning of time, and has never ever been indexed at
all.
Both the lack of indexing of that amount and the confusion
of having to report it, we think are obstacles on the
application.
Mr. DOGGETT. You might have a senior who bought a life
insurance policy early in their life, a small policy, and by
this time, that insurance company may have changed hands three
or four different times. They have misplaced the policy. They
hoped it would be there to cover their burial expenses or help
their family at the end of their life, and they are confused
about that, and finding all that is an obstacle to them getting
these benefits.
Ms. NEMORE. Those are the kinds of things that make it hard
for people, and they end up having their application
disapproved because they were not able to find it or to provide
the documentation. We know that is a factor.
There is another thing, the question that you have in your
legislation to get data from IRS, we believe it may be possible
for Social Security to get those data if they had the
permission of the beneficiary, and they could perhaps put a
check off box on their application that would say I agree to
have SSA check IRS data and send it to my state.
Finally, SSA has done something that many states have not
done, and it is beneficial. They allow people to certify the
truth of the contents of their application. We would be much
better off if more states would adopt that. Unfortunately, SSA
has used language that is quite intimidating by including a
reference to crime and going to prison for giving mis-
information.
The reference to the crime is in the context of fraud. It
is intimidating language, and I think people may fear that if
they just made a mistake or they forgot to report something
that they could go to prison. We believe that is a barrier.
I would just like to quickly go back to this issue getting
automatically enrolled. I think it is an important one both
administratively and legislatively for us to look at.
According to CHS's numbers from June 2006, eighty percent
of the people getting the low income subsidy are automatically
enrolled. Eighty percent of the people getting the low income
subsidy are automatically enrolled. That is how we get people
into programs, by not making it difficult for them.
If we could have, as other people testifying have
suggested, a sort of cross deeming, meaning if you are in this
program, you are deemed eligible for this program, we do that
for MSP. If you are in MSP, you are deemed into the low income
subsidy.
If we could align the programs closely enough so you could
do that both ways, then if I went to Social Security to sign
up, I would get both programs. If I went to my state agency to
sign up, I would get both programs. That would be a big step
towards improving the enrollment in both programs.
Mr. DOGGETT. Thanks to all four of you for your statements.
Chairman STARK. Mr. Camp.
Mr. CAMP. Thank you. Thank all four of you for being here.
Thank you for your testimony.
Ms. Kennedy, my first question was going to be after sort
of reviewing your testimony and looking at the things Louisiana
has done and this flexibility is available to all states, why
have not other states done what Louisiana has done, and then I
saw you did receive a grant from a Foundation, and also the
matching funds.
What about states who do not have these resources? Do you
think that is a big barrier to not adopting some of the
flexibility and changes that Louisiana did?
Ms. KENNEDY. I cannot speak for them. I think it would be a
factor.
Mr. CAMP. Would Louisiana have been able to proceed with
those reforms without the Foundation and matching dollars?
Ms. KENNEDY. No.
Mr. CAMP. Dr. Payne, if we expand the number of people--
first of all, if you look at the MSP programs, between 13 and
30 percent of the eligible low income beneficiaries are
actually signed up. It is not a high enough number.
What I heard in your testimony was let's expand the number
of people eligible for those programs. Should we not focus on
the currently eligible people and try to get more of them
enrolled before we expand the program?
Ms. PAYNE. No. We feel that there are a large number of
people who need these benefits, desperately need these
benefits, and we ought to do everything we possibly can to
bring in those vulnerable populations.
Mr. CAMP. Absolutely.
Ms. PAYNE. There are some administrative efficiencies that
can be employed to improve the program, but we certainly think
that we need to remove all of the barriers to enrollment in
Part D, especially for low income communities.
Mr. CAMP. Yes. That is not suggesting an expansion of the
program, but that is trying to get those who are currently
eligible enrolled, which Part D has done a much better job of
than MSP. Would you agree?
Ms. PAYNE. Yes, I would agree with that. I think several
have mentioned the integration of programs. We think if one is
eligible for LIS, then certainly they ought to be eligible for
MSP and vice versa. I think there needs to be more integration
of the programs.
Mr. CAMP. Ms. Santiago-Herrera, if you were to lose access
to your current plan and had to go back to the plan that you
had before, what would that mean?
Ms. SANTIAGO-HERRERA. I would have to go into a nursing
home because there would be no one to come to see about my feet
or no one to come to help me clean the house or take a bath,
and there would be no food for me, because I am a diabetic. I
became a diabetic a year ago.
When they sent me the handbook to choose from, I did not
know what to choose from because the book is very confusing,
believe me, when I tell you. I just did not know.
My neighbor came over and she was telling me about
Evercare. I said, well, I do not know, it is too much for me. I
just put the book aside. The next day I called Evercare, and
they sent a man and his wife out to my house, and they sat down
and went through the whole thing to make me understand it.
Also, I forgot to mention, they give me ten trips a year to
my doctor, back and forth. They would wait for me and bring me
back. I have had the five heart attacks and the three strokes.
Mr. CAMP. Thank you.
Ms. SANTIAGO-HERRERA. I could not exist without them, sir.
Mr. CAMP. You were not automatically enrolled then, you
signed up yourself?
Ms. SANTIAGO-HERRERA. No, I signed up.
Mr. CAMP. At the suggestion of a friend.
Ms. SANTIAGO-HERRERA. Yes.
Mr. CAMP. Thank you. Thank you all. Thank you, Ms. Nemore,
for coming to the previous briefing and helping us understand
these issues. I appreciate all of your testimony. Thank you
very much.
Thank you, Mr. Chairman.
Ms. SANTIAGO-HERRERA. Thank you, Mr. Chairman.
Chairman STARK. Mr. Doggett?
Mr. DOGGETT. If I could direct a query to Dr. Payne and Ms.
Nemore really on this same point that Mr. Camp raised, because
it is a critical issue for you to comment on.
We see so many people that are not covered now, who are
eligible, according to Social Security and Medicare, over three
million people.
Comment, if you will, on the observation, and it appears to
have some good reason behind it, that if you have three million
people that are not covered, why should we raise the asset test
or adjust it in order to expand that number?
What is the rationale behind doing that? You did that to
some extent, Dr. Payne, but I know you have not inquired on it.
I believe the people we are talking about expanding it, you
would like to see it expanded much more than my bill, but the
group we are expanding it to slightly in this bill are not rich
people. They are people of fairly modest income.
If you would just close focusing on that question that I am
so pleased Mr. Camp raised.
Ms. NEMORE. Thank you, Mr. Doggett. I think if we look at
the rules for the low-income subsidy and the way it has been
administered both by how Congress described it and how SSA has
done it, and the Medicare savings programs, what I see is that
Congress has grown in its understanding over the last 20 years
about the needs of low income beneficiaries.
We started in 1988 with 100 percent of poverty, and by the
time we got to Medicare Part D, we recognized that people
needing full benefits need to be at 135 percent of poverty. It
took us 20 years--it took us until 1997 to get to that level
for the Medicare Savings Programs.
We also recognized in Part D what had not been recognized
before, that you have to index the asset test. The asset test
for the Medicare Savings Program is frozen at a number that was
chosen in 1988 based on an existing number in the SSI program
that had never been indexed.
If we expanded the MSP programs so they were aligned with
LIS and increased the assets so those were aligned, we would
then be in a position where either program would be a way to
get into the other program.
What your legislation does is recognize that there are a
lot of people who have very low incomes who have just a little
more assets than we allow, and that it is important to reach
those people to get that asset test at least higher.
As you know, we along with AARP and other groups, support
the elimination of that test because the very existence of it
can be a barrier to enrollment.
Increasing it we know will bring some more people in who
are very low income people.
Ms. PAYNE. Mr. Doggett, I will simply make two points. We
think it is incredibly reasonable to simplify the process,
streamline the application, remove the asset test, to reach out
to those low income communities, as I said earlier, that need
these services so desperately, and to look at better alignment
between the programs.
We think it is incredibly simple to identify those
individuals. Social Security is already making that information
available or IRS is making the information available to Social
Security. They are using it for Part D premiums.
Why can we not use the same process for identifying poor
people? We think again that it is a reasonable step. Your bill
opens the door for all kinds of opportunities for those that
are most vulnerable, and there are some very simple techniques
that we can use.
Social Security has been very good at protecting privacy.
We think they can play a much greater role in ensuring a
process, a simple process, for identifying those who need these
services.
Mr. DOGGETT. Thank you very much for all you have
contributed this morning and what you are doing in your
individual professional capacities, and thank you, Mr.
Chairman, for focusing attention on this major problem.
Chairman STARK. Thank you, Mr. Doggett, for your efforts. I
want to thank all the witnesses for being here with us today.
Ms. Santiago-Herrera, is this your first trip to
Washington?
Ms. SANTIAGO-HERRERA. Yes, sir.
Chairman STARK. Pretty exciting, is it not?
Ms. SANTIAGO-HERRERA. Yes, sir.
Chairman STARK. Are you going to do some sightseeing?
Ms. SANTIAGO-HERRERA. Yes.
Chairman STARK. Nice of you to be here.
This meeting is adjourned.
[Whereupon, at 1:32 p.m., the hearing was adjourned.]
[Submissions for the record follow:]
Statement of the National Council on Aging
The National Council on Aging (NCOA) is the nation's first
organization formed to represent America's seniors and those who serve
them. Founded in 1950, NCOA's mission is to improve the lives of older
Americans. Our programs help the nation's seniors improve their health,
find jobs and job training, discover meaningful opportunities to
contribute to society, enhance their capacity to live at home, and
access public and private benefit programs. Our members include senior
centers, area agencies on aging, faith-based service agencies, senior
housing facilities, employment services, and consumer organizations.
NCOA also includes a network of more than 15,000 organizations and
leaders from service organizations, academia, business and labor who
support our mission and work.
NCOA chairs the Access to Benefits Coalition (ABC),\1\ comprised of
national and community-based organizations dedicated to ensuring that
Medicare beneficiaries with limited means know about and make the best
use of resources available to access their needed prescription drugs
and reduce their prescription drug costs. Established in 2004, the
Access to Benefits Coalition has involved hundreds of community-based
nonprofits through 55 local coalitions in 34 states and the District of
Columbia, in educating and enrolling tens of thousands of beneficiaries
in the Medicare Part D Low-Income Subsidy (LIS) and other prescription
savings programs.
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\1\ www.accesstobenefits.org.
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ABC and its network of local organizations use powerful web-based
tools such as NCOA's BenefitsCheckUp' decision support tool
\2\ to help beneficiaries--as well as family caregivers and
organizations who wish to assist them--to understand, apply for, and
enroll in public and private prescription savings programs.
BenefitsCheckUp' also helps determine if individuals qualify
for the LIS, Medicare Savings Programs (MSPs), and other prescription
savings programs with application forms available on the site, or
enabling users to apply online for some of the benefits.
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\2\ www.benefitscheckup.org.
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NCOA is committed to finding and enrolling low-income Medicare
beneficiaries in the available needs-based benefits programs for which
they are eligible. We are pleased to submit this statement to the
Subcommittee to highlight the need to simplify and streamline both the
LIS and MSP. The statement also includes discussion of cost-effective
strategies for finding and enrolling qualified eligibles in needs-based
benefits programs.
The Medicare Part D Low-Income Subsidy (LIS) and the Medicare Savings
Programs (MSPs)
The LIS and MSP programs provide substantial financial assistance
to low-income Medicare beneficiaries both in accessing their needed
prescription drugs and paying their Medicare premiums and cost-sharing.
Although this assistance is available, enrollment rates in both
programs remain unacceptably low. Some of the reasons for the low
enrollment rates include confusing and difficult applications and
eligible people not knowing the programs exist. Removing these barriers
to enrollment is critical to increasing enrollment rates and providing
low-income Medicare beneficiaries with the assistance they need.
The Low-Income Subsidy
It has been estimated by the U.S. Department of Health and Human
Services that at least 75 percent of the Medicare beneficiaries still
without any prescription drug coverage are eligible for the Low-Income
Subsidy.\3\ NCOA estimates that only between 35 and 42 percent of
Medicare beneficiaries who needed to voluntarily file an application
with SSA in 2005 and 2006 to receive LIS have successfully done so (2.2
million out of 5.2 or 6.2 million). The remaining 58 to 65 percent are
not receiving the assistance for which they are eligible. It is
important that efforts to find these people continue as the remaining
LIS eligibles stand to gain the most from the prescription drug benefit
and are least likely to have had prescription drug coverage before Part
D began.
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\3\ Statement of Michael Leavitt, Secretary of U.S. Department of
Health & Human Services, May 2006.
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To find the remaining LIS eligibles, certain changes need to be
made to the Part D LIS program. NCOA and the Access to Benefits
Coalition (ABC) released a report entitled The Next Steps: Strategies
to Improve the Medicare Part D Low-Income Subsidy \4\ in January 2007.
The report outlined legislative, administrative and regulatory changes
that should be made to the LIS program to improve access for low-income
beneficiaries. The most important legislative recommendations include:
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\4\ http://www.accesstobenefits.org/library/pdf/TheNextSteps.pdf.
Eliminate the asset eligibility test. The asset test
is the single-most significant barrier to the LIS for low-
income seniors and people with disabilities. The asset test
penalizes retirees who did the right thing by creating a modest
nest egg to provide some security in their old age. People who
manage to save a modest sum for retirement and still have very
limited incomes should be encouraged and rewarded, not denied
the extra help that they need. Of the LIS applications filed,
the Social Security Administration (SSA) reports 41 percent of
denials were because the asset limits were exceeded.
Eliminating the asset test would provide coverage through the
``donut hole'' for 1.8 million low-income beneficiaries in
greatest need of help.
Fund the National Center on Senior Benefits Outreach
and Enrollment and support organizations that use a person-
centered approach to outreach, which has been shown to be one
of the most efficient ways to find and enroll LIS eligibles.
Finding and enrolling seniors and people with disabilities with
limited resources in needs-based benefits programs has been a
significant challenge for many years. The Older Americans Act
(OAA) includes an authorization for the National Center on
Senior Benefits Outreach and Enrollment that will use cost-
effective, person centered approaches to reach the remaining
LIS eligible beneficiaries. We recommend that $4 million be
provided to support the work of the National Center to create
Benefits Enrollment Centers that will: maintain web-based
decision support tools; develop and maintain an information
clearinghouse on best practices; and provide training and
technical assistance.
Permit beneficiaries to apply for LIS and enroll in a
plan at any time without penalty. We are grateful to the
Centers for Medicare & Medicaid Services (CMS) for extending
the Special Enrollment Period (SEP) and waiving the Late-
Enrollment Penalty (LEP) for LIS eligibles through 2007.
However, we urge Congress to make these protections permanent.
Finding the remaining LIS eligibles will take time, as the
experience in other needs-based benefits programs indicates.
Under Medicare Part B, low-income beneficiaries eligible for
Medicare Savings Programs can enroll any time and are exempt
from penalties. The Part D rules should be made to be
consistent with the Part B rules. Remove the LIS application
questions on the cash surrender value of life insurance
policies, and the value of in-kind support and maintenance
(ISM). Many beneficiaries do not have this information and
paperwork readily available. Insurance policies often are no
longer held by the company they were originally purchased from,
making it difficult to track down the company currently holding
the policy. Beneficiaries also often plan for their families to
use the life insurance benefit to pay for their burial
expenses. Questions on ISM should also not be included because
the amount is very difficult for applicants to estimate, due to
its fluctuating nature and if people had assistance with their
prescription drug costs they often would not have to rely on
ISM.
Do not count funds in retirement savings plans such
as 401(k) accounts as assets. Forcing people to cash in their
401(k) plans to become eligible for LIS penalizes seniors for
doing the right thing by saving for retirement. Defined benefit
pensions are not counted as an asset when determining LIS
eligibility. For most of those without a defined benefit
pension plan, the resources in their 401(k) are their only
retirement savings. It makes no sense to discriminate against
those who rely on their 401(k) plan. Periodic distributions
from 401(k) accounts may constitute the only income people have
to supplement their Social Security benefits.
Index the copayments for people between 100 and 150
percent of the Federal Poverty Level to the Consumer Price
Index (CPI), not Part D drug cost increases. LIS-eligible
people with incomes below 100 percent of the FPL have their
prescription drug copayments increased each year according to
the CPI. This roughly corresponds with beneficiaries Social
Security cost-of-living adjustment (COLA) reflecting
beneficiaries' ability to pay. However, for LIS-eligible
beneficiaries with incomes between 100 and 150 percent of
poverty, their co-payments are indexed to increases in Part D
prescription drug costs, which rise at twice the rate of
beneficiaries COLAs. Therefore, copayments become increasingly
unaffordable and the value of the benefit for people between
100 and 150 percent of the FPL diminishes significantly over
time.
Require the Internal Revenue Service (IRS) to provide
SSA with tax-filing data to better target outreach efforts,
while recognizing privacy concerns. Strategic partnerships
among federal agencies, such as SSA, CMS, and IRS, will allow
for targeted outreach directly to the people who are most
likely eligible for LIS. CMS and SSA should have access to
income and resource data contained in IRS files, thereby
allowing them to more accurately identify potential LIS
eligibles. This information would allow these agencies to
target their outreach and enrollment efforts and would result
in increased enrollment in the LIS program. Such data sharing
has been permitted for the Medicare-approved drug discount card
Transitional Assistance (TA) program and for administering Part
B income related premiums.
Do not count prescription drug LIS assistance when
determining benefits under other benefits programs. The effect
of the LIS is compromised when reductions are made in other
needs-based assistance, due to receipt of the LIS benefit.
Congress should pass legislation to ensure that benefits under
other needs-based programs, such as food stamps, Section 8
housing, and the Medicaid Medically Needy program, are not lost
or reduced on account of receiving LIS benefits. Low-income
beneficiaries should not be forced to choose between their
housing or food needs and receiving help to pay for their
prescription drugs. The Medicare Modernization Act (MMA)
included this type of provision for the $600 TA under the
Medicare-approved drug discount cards.
Have SSA screen LIS applicants for participation in
the Medicare Savings Programs (MSPs). State Medicaid offices
are required to screen for MSPs when a person applies for the
LIS. However, most LIS applications are not filed at state
Medicaid offices, but instead are processed by SSA. SSA should
also be required to screen for MSP eligibility at the time of
the LIS application. Participation in any of the MSPs
automatically qualifies a person to participate in the full
LIS. Since SSA already is collecting income and asset
information for the LIS application, it would be relatively
easy to screen for MSP eligibility at the same time. A study by
the Access to Benefits Coalition found that 71 percent of the
people who were found eligible for LIS also screened eligible
for one of the MSPs. There is precedent for this as SSA already
enrolls Medicare beneficiaries who receive Supplemental
Security Income (SSI) in Medicaid in 32 states and the District
of Columbia.
The Medicare Savings Programs
MSP is a joint Federal and State program that provides needed
financial assistance to Medicare beneficiaries with their premiums and
cost-sharing. There are four MSP programs: the Qualified Medicare
Beneficiary program (QMB) pays Medicare premiums and cost sharing for
people under 100% of the Federal Poverty Level (FPL); the Specified
Low-Income Medicare Beneficiary program (SLMB) pays Part B premiums for
people between 100 and 120% of FPL; the Qualifying Individual program
(QI) pays Part B premiums for people between 120 and 135% of FPL, and
the Qualified Disabled and Working Individual program (QDWI) pays Part
A premiums for people with Medicare who are under age 65 and disabled,
whose incomes are at or below 200% FPL and who no longer qualify for
premium-free Medicare Part A only because they returned to work.
Additionally, people eligible for QMB, SLMB or QI are automatically
eligible for the LIS. Although MSPs provide much needed assistance,
enrollment rates in the program are low. Only 33 percent of people
eligible for QMB and 13 percent eligible for SLMB are enrolled.
QMB and SLMB are entitlement programs jointly financed with both
Federal and State money. This means that anyone who meets the
qualifications can enroll in the program. QI, however, is not an
entitlement program and is entirely financed by a grant from the
Federal Government to the states. Because QI is not an entitlement
program, people who are otherwise eligible may not be able to receive
the benefit if the money available to the states through the Federal
grant is used up. Additionally without Congressional action, the QI
program is set to expire at the end of Fiscal Year 2007.
Changes to simplify the MSP application and align the program with
the LIS would increase the number of people enrolled in the program.
Some of the recommended changes to the MSP program include:
Merge the QI program with the SLMB program to make QI
permanent, and provide funding to the states for SLMB at the
increased SCHIP rate.
Eliminate the asset test for MSP eligibility. If this
cannot be done, we support increasing and aligning both the MSP
and LIS asset tests to be more reflective of people with
limited incomes who have managed to save a modest amount of
money for retirement. More closely align MSP and LIS programs
(see earlier LIS recommendations on life insurance, in-kind
support and maintenance, 401(k)) by gradually increasing income
eligibility to 150 percent of the Federal Poverty Level. Also
deeming should take place between both programs--those eligible
for LIS should automatically be eligible for MSP.
Do not require face-to-face interviews for MSP
eligibility, as it deters people from seeking assistance under
the program. In addition, the MSP application should be
available both in multiple languages and online in all states
to encourage potential eligible beneficiaries to apply.
State Health Insurance Assistance Programs (SHIPs)
should be given $1 per Medicare beneficiary to conduct outreach
and education. In addition, first year funding of $4 million
should be provided for the National Center on Senior Benefits
Outreach and Enrollment authorized under the OAA. Funding
should be targeted to MSP and LIS eligibles. Eliminate estate
recovery for the MSP program in all states that have not
already done so on their own. It does not amount to a
significant amount of money for the states, it is
administratively expensive, and it serves as a barrier to MSP
enrollment for people who need the assistance offered under the
program.
The SSA Commissioner should include information on
MSP for those people who are likely eligible when the letters
for newly eligible Medicare Parts A and B beneficiaries are
sent. One of the reasons MSP enrollment numbers remain low is
that most people do not know the programs exist. In addition to
sending letters, other outreach efforts need to be made to
increase awareness of the program.
IRS data provided to SSA for the indexing of Part B
premiums should be used by SSA to screen potential eligibles
for participation in MSPs and LIS.
We support three months of retroactive eligibility
for people found eligible for QMB, as it is for both the SLMB
and QI programs.
NCOA supports extending the LIS rule for determining
family size to the MSP program. This would allow those with
larger families to have more resources, making it consistent
with their larger family responsibility. Many states currently
do not take into account family members in addition to the
spouse.
Simplifying and aligning the LIS and MSP programs will encourage
low-income Medicare beneficiaries to enroll in the programs as people
eligible for one of the programs are likely eligible for the other.
Cost Effective Strategies fo Enrolling Beneficiaries in Needs-Based
Benefits
Over the past three years, NCOA has been testing a variety of
strategies for increasing enrollment in the LIS and other key needs-
based public benefits. Various pilot projects have been funded
primarily by The Commonwealth Fund, The Atlantic Philanthropies, CMS,
and Kaiser Permanente.
Over the past year, four evidence-based strategies have emerged
that are particularly cost-effective for finding and enrolling low-
income beneficiaries in available Medicare programs for low-income
beneficiaries:
1. Use comprehensive, person-centered approaches to outreach
and enrollment (rather than focusing solely on a single
benefit).
People who are eligible for one means-tested public benefit are
highly likely to also be eligible for, but not receiving other key
public benefits. Many people who are applying for LIS are also eligible
for other public benefits and vice versa.
A major benchmarking study by The Bridgespan Group and NCOA
examining more than 30 different single-benefit outreach and enrollment
projects shows that, consistently, about 55 percent of the total costs
per enrollment are related to identifying qualified individuals and
persuading them to apply and only 45 percent of the costs relate to
actual assistance with applications.\5\
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\5\ http://www.accesstobenefits.org/library/pdf/
PathwaysToSuccess.pdf
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Most federal agencies are limited by statute and/or practice from
conducting outreach for more than a few benefits (e.g., USDA conducts
Food Stamps outreach; SSA conducts LIS and SSI outreach; CMS conducts
Medicare Part D outreach). As a result, the government is incurring the
same costs of identification and persuasion over and over again. Much
more could/should be done to increase the cost-effectiveness of
government-sponsored outreach and enrollment efforts by encouraging/
requiring screening for multiple benefits.
2. Invest in the aging network and trusted, non-profit
community-based organizations that can create broad-based
networks to efficiently connect people who are likely eligible
for needs-based benefits to enrollment specialists who will
help them apply.
The ``aging network'' and other community-based non-profit
organizations are well-suited to find and enroll low-income Medicare
beneficiaries because they: are client-focused and person-centered;
have trusting relationships with many beneficiaries; can create
community-wide referral systems; and are able to leverage funding from
multiple sources.
The most cost-effective, community-based approach seems to be to
create referral networks in which key organizations (such as drug
stores, health plans, health centers, social service agencies, etc.)
efficiently refer people seeking assistance and who are likely eligible
to specialty enrollment centers. Ideally, these referrals should be
``warm transfers'' (i.e., the ``real-time'' transfer of a caller who
has been identified in some way as having a specific need) to a
helpline dedicated to assisting them with the applications.
Warm transfers to LIS enrollment centers result in the highest
numbers of actual applications and are, on average, almost five times
more cost-effective than direct mail and three times more cost-
effective than outbound calls. In every community, there is a need for
some targeted funding, particularly to focus on enrollment assistance
(helping people to fill out the application forms once they have been
identified).
3. Promote the widespread use of person-centered, online
screening and enrollment services (such as the BenefitsCheckUp)
that enable consumers and organizations to screen for multiple
benefits and directly file LIS applications;
Online screening and enrollment services have the potential to help
two different groups of low-income Medicare beneficiaries: consumers
who can successfully use the Internet to get benefits for themselves or
family members; and consumers who need the assistance of intermediary
organizations to learn about and enroll in benefits.
There are many advantages to online screening and enrollment tools,
including: they can be easily accessed by both consumers and
intermediary organizations and they can simultaneously screen for and
facilitate enrollment in multiple benefits. Online filing for LIS
significantly reduces processing costs for SSA.
The BenefitsCheckUp' program, which is supported by
foundations and corporations, served 232,000 clients in 2006 and its
consumer edition (serving people and/or their caregivers directly
accessing the site) is currently producing enrollments in major public
benefits at a cost $15 per benefit. If the online service was sponsored
and/or promoted by government, it could reach and serve many more
people and would likely achieve enrollments for $7--$10 per major
benefit. Online tools also increase the efficiency and effectiveness of
community-based organizations. Enrollment centers that assist consumers
by filing online for LIS (either directly to SSA or through
BenefitsCheckUp') are more cost-effective than organizations
filling out application forms and mailing them in. Online tools make
person-centered screening (for multiple benefits) and application
filing much easier to do.
4. Encourage states to work across departments and use cross-
matched state lists of people already enrolled in other public
benefits to identify individuals eligible for and not receiving
LIS and MSP.
State benefit lists are a valuable resource that should be utilized
to maximize enrollment in LIS and other benefits. The potential of this
approach is being demonstrated in Pennsylvania. For the past three
years, the State Department on Aging has been contracting with Benefits
Data Trust to locate and apply individuals for the PACE/PACENET
(Pharmaceutical Assistance Contract for the Elderly) program as well as
the State of Pennsylvania Property Tax and Rent Rebate Program (PTRR)
and MSP. This partnership exemplifies how this strategy can work to
successfully locate, contact and enroll individuals into benefits they
are eligible to receive.
By cross-matching a list of 300,000 PACE enrollees with a list of
250,000 Property Tax and Rent Rebate program enrollees (list came
through Department on Aging from Department of Revenue), the State
identified 100,000 Property Tax and Rent Rebate program enrollees that
were likely eligible for and not receiving PACE. By cross-matching the
250,000 Property Tax and Rent Rebate program enrollees against the list
of 300,000 individuals receiving PACE/PACENET, the State identified
90,000 PACE/PACENET enrollees who were likely eligible for and not
receiving Property Tax and Rent Rebate. By cross-matching the 300,000
PACE file with the Department of Public Welfare (state Medicaid office)
file, the State identified 100,000 PACE enrollees who were likely
eligible for and not receiving MSP benefits).
Using state lists of people enrolled in other public benefits has
resulted in higher percentages of people who apply for and, ultimately
receive, other benefits, as compared to lists that have less accurate
income and contact information (i.e., people ``believed to be''
eligible). Response rates and application conversion rates are higher
when outreach efforts are able to use pre-existing benefit lists.
Accuracy of both the financial and contact information provided by the
Property Tax/Rent Rebate program has resulted in response rates for
benefits application that are 250% greater than those resulting from
efforts using purchased commercial lists. From an economic perspective,
this means the cost of getting people into the benefits is also two and
a half times less when using a well-targeted list. In other words, for
the same fixed cost, more people are being helped at a much lower cost
when efforts are much more targeted. Furthermore, the residual effect
is that people who were in just one public benefit program in the
beginning potentially end up being enrolled into three programs.
The National Center on Senior Benefits Outreach and Enrollment
A more focused, coordinated effort that utilizes person-centered
assistance, web-based decision-support tools, and sophisticated lists
of likely eligibles is needed to find and enroll low-income
beneficiaries. Drawing directly on these strategies, the recently
reauthorized Older Americans Act now provides a clear path to solving
the problem by harnessing the potential of the aging network, new
technology, and best practices based on lessons learned. The OAA
includes new authorization for a National Center on Senior Benefits
Outreach and Enrollment that will:
maintain and update web based decision support and
enrollment tools and integrated person-centered systems;
utilize cost-effective strategies to find those with
greatest economic need;
support efforts for community-based organizations and
coalitions to serve as benefit enrollment centers;
develop and maintain an information clearinghouse on
best practices; and
provide training and technical assistance regarding
the most effective outreach, screening, enrollment and follow-
up strategies.
Now that the Center is authorized, initial funding of $4 million is
needed to:
Work with trusted, experienced community-based and
state organizations to support 25 Benefits Enrollment Centers
(BECs) across the country with funding at $100,000 per Center.
[$2.5 million]
Conduct pilot projects on list strategies, call
centers, and other innovative strategies to test the most cost-
effective outreach and enrollment methods. [$500,000]
Maintain and update web-based decision support and
enrollment tools and integrated, person-centered systems that
are available to BECs, the entire aging network and directly to
consumers. [$500,000]
Train and provide technical assistance to the BECs
and to the rest of the aging network, administer the pilot
projects and begin to develop an information clearinghouse on
cost effective best practices. [$500,000]
Conclusion
Congress created the MSP and LIS programs to provide needed
assistance to low-income Medicare beneficiaries in paying for their
health and prescription drug costs. Unfortunately, enrollment in these
programs has historically been low. To increase enrollment, needed
changes should be made to the programs, including simplifying and
aligning them, to increase access for Medicare beneficiaries with
limited incomes. Cost-effective best practices should be used in
outreach and enrollment efforts for needs-based benefits.
Thank you for the opportunity to submit this statement on behalf of
the National Council on Aging. If you have any questions please contact
Howard Bedlin, NCOA's vice-president for Public Policy & Advocacy at
(202) 479-6685 or howard.bedlin@
ncoa.org.
Statement of Senior Citizens League
On behalf of the approximately 1.2 million members of The Senior
Citizens League (TSCL), a proud affiliate of The Retired Enlisted
Association (TREA), thank you for the opportunity to submit a statement
regarding low-income programs available to eligible Medicare
beneficiaries. TSCL consists of active senior citizens, many of whom
are low income, concerned about the protection of their Social
Security, Medicare, and veteran or military retiree benefits.
Some estimates suggest that as many as two-thirds of those eligible
for certain low-income programs do not participate--often because they
are not aware that such programs exist or believe they will not qualify
based on out-of-date information. Frequently, our members contact our
office with concerns over having to choose between purchasing
prescription medications and paying bills. In some cases, these
individuals are eligible for low-income programs but were not aware of
the programs' existence.
MEDICARE SAVINGS PROGRAM (MSP)
With three separate programs for Medicare Part B assistance, the
first task seems to be determining which one applies for an individual.
For individuals with an annual income level of $10,452 ($871 per
month), or $13,932 ($1,161 per month) for couples, the Qualified
Medicare Beneficiary (QMB) program exists. Asset levels are set at
$4,000 for individuals and $6,000 for a couple. Persons in the QMB
program have their Part B premiums, deductibles, and all Medicare cost
sharing paid by their state Medicaid program. According to a May 2004
report by The Commonwealth Fund, it is estimated that 4 million seniors
are eligible, based on income alone, for this program.
Specified Low-Income Medicare Beneficiaries (SLMB) are persons
whose annual income is at or below 120% of the federal poverty level,
or $12,492 ($1,041 per month) for an individual, and $16,668 ($1,389
per month) for a couple. SLMB are subject to the same asset limits as
QMB. State Medicaid programs pay SLMB's Medicare Part B premiums.
The third MSP grouping is Qualifying Individuals (QI). Individuals
with an annual income between 120% and 135% of the federal poverty
level fall into this category. To qualify, individuals must have an
annual income of no more than $14,028 ($1,169 per month), or couples
must have an annual income of no more than $18,720 ($1,560 per month).
Asset levels remain the same for this group as for the SLMB and QMB.
The Federal Government, and not the state, pays Medicare Part B
premiums for persons designated QI.
The Federal Government sets the income limits for eligibility,
application procedures and asset limits. Although income limits are
adjusted annually, asset limits, which were set in 1989, have not been
indexed since then, according to The Commonwealth Fund, May 2004 issue
(``How Asset Tests Block Low-Income Medicare Beneficiaries from Needed
Benefits''). The asset limits are burdensome, outdated, and
intimidating. Personal disclosure of one's incomes and assets can also
be a major hurdle for many elderly individuals. When asked about the
cash value of in-kind contributions and the cash value of life
insurance policies, applicants either do not know the value or are
embarrassed to report such assistance. Counting the ``in-kind'' value
of meals and support supplied through the generosity of others
penalizes the neediest of seniors, and disregards the contributions of
those who kindly supply the most basic of needs. In some instances,
applicants do not disclose requested information for fear of
incarceration, which is mentioned on the application.
Asset limits vary by state. It should also be noted there are a few
states that have eliminated or adjusted asset levels for the QMB and
SLMB. States also have the option of using less restrictive measures
for income and asset levels when determining Medicaid eligibility. In
these instances, an individual who does not meet federal asset levels
may be eligible for the MSP assistance.
In the vast majority of cases, low-income seniors are not aware
that programs exist to assist with premiums. Indeed, just learning the
income limits to prepare this statement for the record proved a
difficult challenge. When this statement was prepared, there was no
link to Medicare Savings Programs posted on the homepage of
www.medicare.gov. Information pulled up by use of the website search
engine was more than one year old and the income limits out-of-date. By
using the search engine for the `Frequently Asked Questions,' only one
answer even mentioned MSPs, and it directed us to our state Medicaid
office, with no income information. The website for the Centers for
Medicare and Medicaid Services (CMS) is not designed for seniors or
easy to use by the general public. It also failed to readily supply
current income information. In fact, in order to prepare this
statement, we relied on income information from other Medicare
advocates, the Medicare Rights Center.
Improved outreach is obviously needed and could be simply supplied
starting with links to information about the program on the homepage of
Medicare.gov. In addition, adequate funding must continue for seniors'
counseling provided by Area Agency on Aging offices; local
organizations that already reach out to low income individuals; and
state insurance (Medicaid) offices. In recent years, the need for these
services has been rapidly growing, but funding has not kept pace.
LOW INCOME SUBSIDY (LIS) PROGRAM FOR PRESCRIPTION DRUGS
For persons enrolled in a Medicare Part D prescription drug plan,
depending on income and asset levels, financial assistance, known as
`Extra Help,' is available. Enrolling in Extra Help, the Federal
Government's low income subsidy (LIS), is simpler than MSPs. For
instance, applications can be submitted on-line, at the state Medicaid
agency office, through a local Social Security Administration (SSA)
office, or by deemed status (dual eligible). Persons enrolled in a MSP
and who receive SSI, or ``Dual Eligibles,'' are automatically enrolled
in a LIS. Of the 9 million seniors enrolled in a LIS, approximately 6
million were enlisted automatically, thus they were considered ``dual
eligibles.'' Seniors not automatically enrolled into a LIS must meet
the following criteria: annual income is below $15,315 ($1,276 per
month) single or $20,535 ($1,711 per month) for a couple, with assets
(bank accounts, stocks, bonds, etc.) of less than $11, 710 (single) or
$23,410 (couple). Assets do not include house or car values.
According to a report by the Medicare Rights Center, the SSA found
that 57% of seniors who applied for extra help were denied due to their
financial assets, even though they met the income levels. Although the
income and asset levels are more reasonable with LIS eligibility than
with MSP, a senior should not be penalized because he or she has
planned for the future and saved to help pay for unexpected expenses
associated with older age. TSCL supports eliminating, or at the very
least updating and indexing, asset tests, especially for MSP
eligibility.
Similar to the MSP application, the LIS application is also complex
and lengthy, which is discouraging to many seniors. Threats of
imprisonment, questions surrounding the cash value of life insurance
policies, in-kind support, and bank accounts are intimidating. Some
estimates suggest there are as many as 5 million seniors eligible for
Extra Help who have not yet enrolled. TSCL believes this staggering
number to be the result of long and confusing applications, asset
testing, and a lack of awareness that Extra Help is even available. The
SSA reports a person enrolled in Extra Help could save, on average,
$3,700 annually. This is a huge amount for someone on a limited income.
SOLUTIONS
The first step in increasing enrollment numbers for both the MSP
and the LIS is to make the information more readily available and
increase outreach. By ensuring the funding for non-federal entities
such as state Medicaid offices and local SSA offices, more seniors can
be made aware of these programs. Additional federal grants are needed
to ensure there are trained Medicare benefits counselors to help
seniors apply for financial assistance.
TSCL believes that the asset test should be completely eliminated.
Basing an individual's eligibility on annual income is sufficient.
Seniors should not be penalized for saving and planning for the future.
However, if complete elimination of the asset test is not feasible,
then, at the very least, increased asset test limits are necessary.
Another option could be to automatically enroll an MSP beneficiary
into the LIS, and vice versa. With federal funding supporting both
programs, the government should consider setting uniform standards
(including simplified applications) for Medicaid offices to follow when
determining the eligibility of seniors for the low income programs.
This would help clear up confusion as to what resources are counted for
which program and what resources do not need to be disclosed. With
federal agencies working together with the same end result in mind,
more eligible seniors would benefit.
In addition, the government already screens Medicare beneficiaries
for ``income related'' Part B premiums. TSCL believes many more seniors
would be enrolled in low income programs if Medicare beneficiaries were
allowed to permit the Internal Revenue Service (IRS) to share low
income information with both the SSA and CMS.
Several pieces of legislation are being, or already have been,
introduced that offer possible solutions. For example, Rep. Lloyd
Doggett (TX-25) introduced H.R. 1536, the Prescription Coverage Now
Act, earlier this year. TSCL fully supports this legislation that
increases asset test limits from $11,710 to $27,500 for individuals and
from $23,410 to $55,000 for couples. Rep. Doggett's bill also makes the
application less intimidating by eliminating questions that ask for
cash values of life insurance and in-kind assistance received.
Additionally, H.R. 1536 would authorize the Social Security
Administration limited use of IRS data, which is already used to
determine Part B eligibility. Finally, the bill also calls for
coordination between low income programs in Part B and Part D. TSCL
encourages Congress to approve this vital legislation.
TSCL applauds Congress for addressing the low enrollment numbers in
Medicare assistance programs. With increased outreach, elimination of
asset test limits, and a less intimidating application process, more
individuals will be made aware of these programs designed to assist
with rising healthcare costs. The end result will undoubtedly be
increased enrollment and better financial stability for seniors in the
lowest income brackets.
Thank you.
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