Notch Reform Bulletin: Drug Provision Important to Many Notch Babies

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Notch Reform Bulletin: Drug Provision Important to Many Notch Babies

The Senate recently dashed hopes of passing a Medicare drug benefit in 2002. As of this writing, the ball is now back in the seniors’ court, unfortunately. We are paying particularly close attention to one provision that appears in virtually every major drug proposal—special assistance for seniors whose incomes are about 150% of the federal poverty level and below. Individuals with incomes of about $13,290 or less and couples with incomes of about $17,910 or less (slightly higher in Alaska and Hawaii) would be eligible. This provision, we believe, would affect many Notch Babies, especially those who have limited financial resources other than Social Security.

The special assistance would include low (or no) premiums for the prescription drug coverage. The government would cover all or almost all of the drug costs up to a certain amount. Legislation passed by the House earlier this year, for example, would cover a good share of, or in some cases all of, the premium costs. It would cover drug costs up to $2,000 per year for seniors whose incomes are about 150% of poverty level and below. In addition, if prescription drug spending would exceed $3,700 ($2,000 for the government and $1,700 in beneficiary out-of-pocket costs), the government would cover all remaining costs (see “Congressional Corner By Representative Michael Bilirakis (R-FL): Helping America’s Seniors” at http://www.tscl.org/NewContent/101652.asp).

Although some argue that the drug proposals do not go far enough, something is still better than nothing. This kind of assistance represents a significant benefit to millions of seniors, but especially Notch Babies who have limited financial resources except for their Social Security.

Notch Babies are now ages 74 through 85. According to a study by the Urban Institute, Medicare beneficiaries spend more than one-fifth of their income on health care. The study found, however, that the most vulnerable group is lower-income women age 85 or older. For that group, insurance, prescription drugs, and medical bills can devour over 50% of their resources. The study also found that, in 2000, older beneficiaries spent over $3,100 out-of-pocket for health care.

Clearly Notch Babies simply can’t afford to give up now. There’s a broad consensus that Medicare needs a prescription drug benefit. We urge you to contact Members of Congress at http://action.tscl.org to press them to take action. The outcome of this debate has significant financial implications for the nation’s seniors in general, but Notch Babies in particular.

Source: “Modernizing Medicare’s Benefit Package,” The Commonwealth Fund, May 2001.

To read more on this see, “Prescription Drug Plans Moving Through Congress,” at http://www.tscl.org/NewContent/101549.asp.

November 2002