Millions of Medicare beneficiaries are not receiving the savings on Part D drug benefits that they're entitled to.  Recently, the House and the Senate held hearings on the Centers for Medicare and Medicaid Services' oversight of the prescription drug benefit.  Lawmakers criticized the agency's efforts to enroll low-income seniors in the "Extra Help" program, and to protect seniors from administrative problems and aggressive insurer sales tactics.

According to government estimates, about 3.4 million low-income Medicare beneficiaries qualify for, but are not receiving, "Extra Help. " "Extra Help" is the program that provides assistance with premiums, deductibles, co-insurance costs, and valuable coverage during the Part D "doughnut hole" coverage gap.  Seniors who already receive Medicaid automatically receive the coverage, but many more whose incomes are below 150% of the federal poverty level, and who do not receive Medicaid must apply on their own through the Social Security Administration for the coverage.  Once found eligible, seniors still must enroll in a Part D plan to get the coverage. 

Advocates say many individuals don't understand the difference between the prescription drug benefit and "Extra Help."  Some beneficiaries thought that once they were approved for "Extra Help" they were automatically enrolled in a prescription drug plan. 

According to data from the Social Security Administration, about 47% of the applications for "Extra Help" are denied due to financial assets being too high, even though applicants met income requirements.  In 2007 individuals qualify for "Extra Help" if they have an income of less than $15,315 and assets (savings) of less than $11, 710.  Couples qualify if they have a combined income of no more than $20,535 and assets of $23,410.  The government does not count such things as a primary residence, a car, a burial plot or certain other personal possessions.  For those who qualify, the program can save thousands of dollars.  In 2007 seniors without "Extra Help" must spend $3,850 out-of-pocket before catastrophic coverage begins, and that doesn't include the cost of premiums.

On May 3, 2007, TSCL submitted a Statement for the Record on the Medicare Programs for Low-Income Beneficiaries to the House Ways and Means Subcommittee on Health [NPA, please insert link to statement here].  To read TSCL's recommendations see the Legislative Update.

Sources:  "Medicare Part D Low-Income Subsidy," Barbara Bovbjerg, GAO, May 8, 2007, GAO-07-858T.

August 2007