<DOC>
[110th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:41314.wais]
MEDICARE SAVINGS PROGRAMS AND LOW
INCOME SUBSIDY: KEEPING MEDICARE'S
PROMISE FOR SENIORS AND PEOPLE WITH
DISABILITIES
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON HEALTH
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
MAY 15, 2007
__________
Serial No. 110-45
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
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COMMITTEE ON ENERGY AND COMMERCE
JOHN D. DINGELL, Michigan, JOE BARTON, Texas
Chairman Ranking Member
HENRY A. WAXMAN, California RALPH M. HALL, Texas
EDWARD J. MARKEY, Massachusetts J. DENNIS HASTERT, Illinois
RICK BOUCHER, Virginia FRED UPTON, Michigan
EDOLPHUS TOWNS, New York CLIFF STEARNS, Florida
FRANK PALLONE, Jr., New Jersey NATHAN DEAL, Georgia
BART GORDON, Tennessee ED WHITFIELD, Kentucky
BOBBY L. RUSH, Illinois BARBARA CUBIN, Wyoming
ANNA G. ESHOO, California JOHN SHIMKUS, Illinois
BART STUPAK, Michigan HEATHER WILSON, New Mexico
ELIOT L. ENGEL, New York JOHN B. SHADEGG, Arizona
ALBERT R. WYNN, Maryland CHARLES W. ``CHIP'' PICKERING,
GENE GREEN, Texas Mississippi
DIANA DeGETTE, Colorado VITO FOSSELLA, New York
Vice Chairman STEVE BUYER, Indiana
LOIS CAPPS, California GEORGE RADANOVICH, California
MIKE DOYLE, Pennsylvania JOSEPH R. PITTS, Pennsylvania
JANE HARMAN, California MARY BONO, California
TOM ALLEN, Maine GREG WALDEN, Oregon
JAN SCHAKOWSKY, Illinois LEE TERRY, Nebraska
HILDA L. SOLIS, California MIKE FERGUSON, New Jersey
CHARLES A. GONZALEZ, Texas MIKE ROGERS, Michigan
JAY INSLEE, Washington SUE WILKINS MYRICK, North Carolina
TAMMY BALDWIN, Wisconsin JOHN SULLIVAN, Oklahoma
MIKE ROSS, Arkansas TIM MURPHY, Pennsylvania
DARLENE HOOLEY, Oregon MICHAEL C. BURGESS, Texas
ANTHONY D. WEINER, New York MARSHA BLACKBURN, Tennessee
JIM MATHESON, Utah
G.K. BUTTERFIELD, North Carolina
CHARLIE MELANCON, Louisiana
JOHN BARROW, Georgia
BARON P. HILL, Indiana
<RULE>_________________________________________________________________
Professional Staff
Dennis B. Fitzgibbons, Chief of
Staff
Gregg A. Rothschild, Chief Counsel
Sharon E. Davis, Chief Clerk
Bud Albright, Minority Staff
Director
(ii)
Subcommittee on Health
FRANK PALLONE, Jr., New Jersey, Chairman
HENRY A. WAXMAN, California NATHAN DEAL, Georgia,
EDOLPHUS TOWNS, New York Ranking Member
BART GORDON, Tennessee RALPH M. HALL, Texas
ANNA G. ESHOO, California BARBARA CUBIN, Wyoming
GENE GREEN, Texas HEATHER WILSON, New Mexico
Vice Chairman JOHN B. SHADEGG, Arizona
DIANA DeGETTE, Colorado STEVE BUYER, Indiana
LOIS CAPPS, California JOSEPH R. PITTS, Pennsylvania
TOM ALLEN, Maine MIKE FERGUSON, New Jersey
TAMMY BALDWIN, Wisconsin MIKE ROGERS, Michigan
ELIOT L. ENGEL, New York SUE WILKINS MYRICK, North Carolina
JAN SCHAKOWSKY, Illinois JOHN SULLIVAN, Oklahoma
HILDA L. SOLIS, California TIM MURPHY, Pennsylvania
MIKE ROSS, Arkansas MICHAEL C. BURGESS, Texas
DARLENE HOOLEY, Oregon MARSHA BLACKBURN, Tennessee
ANTHONY D. WEINER, New York JOE BARTON, Texas (ex officio)
JIM MATHESON, Utah
JOHN D. DINGELL, Michigan (ex
officio)
C O N T E N T S
----------
Page
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 1
Hon. Nathan Deal, a Representative in Congress from the State of
Georgia, opening statement..................................... 2
Hon. Heather Wilson, a Representative in Congress from the State
of New Mexico, opening statement............................... 3
Hon. Gene Green, a Representative in Congress from the State of
Texas, opening statement....................................... 5
Hon. Marsha Blackburn, a Representative in Congress from the
State of Tennessee, opening statement.......................... 6
Hon. Hilda L. Solis, a Representative in Congress from the State
of California, opening statement............................... 7
Prepared statement........................................... 8
Hon. John B. Shadegg, a Representative in Congress from the State
of Arizona, opening statement.................................. 8
Hon. Tammy Baldwin, a Representative in Congress from the State
of Wisconsin, opening statement................................ 9
Hon. John D. Dingell, a Representative in Congress from the State
of Michigan, prepared statement................................ 11
Hon. Edoulphus Towns, a Representative in Congress from the State
of New York, prepared statement................................ 13
Witnesses
Monica Sanchez, deputy director, Medicare Rights Center,
Washington, DC................................................. 15
Prepared statement........................................... 18
John Coburn, director, Make Medicare Work Coalition, Health &
Disability Advocates, Chicago, IL.............................. 28
Prepared statement........................................... 30
Lilla Sassar, beneficiary, Syacauga, AL.......................... 47
Prepared statement........................................... 47
Gail Clarkson, chief executive officer, the Medilodge Group,
Bloomfield Hills, MI, on behalf of the American Health Care
Association (AHCA)............................................. 48
Prepared statement........................................... 50
N. Joyce Payne, member, Board of Directors, AARP, Washington, DC. 64
Prepared statement........................................... 66
MEDICARE SAVINGS PROGRAMS AND LOW
INCOME SUBSIDY: KEEPING MEDICARE'S
PROMISE FOR SENIORS AND PEOPLE
WITH DISABILITIES.
----------
TUESDAY, MAY 15, 2007
House of Representatives,
Subcommittee on Health,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 2:05 p.m. , in
room 2123, Rayburn House Office Building, Hon. Frank Pallone,
Jr., (chairman) presiding.
Present: Representatives Green, Allen, Baldwin, Solis,
Matheson, Deal, Wilson, Shadegg, Murphy, Burgess, Blackburn and
Barton.
Staff present: Yvette Fontenot, Brin Frazier, Amy Hall,
Christie Houlihan, Purvee Kempf, Bridgett Taylor, Robert Clark,
Chad Grant, Melissa Bartlett, Ryan Long, and Nandan
Kenkeremath.
OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. The hearing is called to order. Today we are
having a hearing on Medicare savings plan and low income
subsidy, keeping Medicare's promise for seniors and people with
disabilities. And I will recognize myself initially for an
opening statement.
The focus of today's hearing is on the Medicare savings
programs which consist of the Qualified Medicare Beneficiary or
QMB Program, the Specified Low-income Beneficiary or SLIMB
Program and the Qualified Individual or QI Program. We will
also be hearing about the newest financial assistance program
available to Medicare beneficiaries, the low-income subsidy
that was included as part of the new Medicare Part D benefit.
These financial assistance programs are a vital part of
Medicare because they help ensure that millions of low-income
beneficiaries are able to access the health benefits that they
are entitled to. Many of the Medicare beneficiaries who qualify
for these programs are our most vulnerable. They are more
frail, more disabled, have greater health care needs that are
often more expensive, and they are also more likely to be
female, live alone and more likely to be racial minorities.
Ensuring the success of the MSP and LIS Programs means
ensuring access to health care services to those who need it
most. Without the Medicare savings programs and low-income
subsidy, millions of low-income beneficiaries would be faced
with the inability to afford the premiums, deductibles and
cost-sharing requirements they are responsible for.
According to the Kaiser Family Foundation, in 2005, over
half of the people with Medicare lived on less than $20,000 a
year. Most of their income came directly from their monthly
Social Security checks. And while I applaud the work that has
already been done to enroll millions of Americans in these
critical programs, there is clear evidence that we are not
doing enough to ensure that everyone who is eligible for these
benefits is receiving them.
According to the Congressional Budget Office, participation
rates for QMB and SLIMB Programs are 33 and 13 percent,
respectively. That is pretty awful. Furthermore, there could be
up to 5 million Medicare beneficiaries who are eligible for the
low-income subsidy under the prescription drug benefit but are
not enrolled. According to the Kaiser Family Foundation, more
than 2.3 million of those beneficiaries meet the necessary
income requirements to qualify for the low-income subsidy but
are deemed ineligible due to the asset test.
Now we can and should be doing more to improve
participation rates in these programs and ensure these
beneficiaries have access to the health benefits they need and
deserve. Today we will hear from a number of witnesses about
ways we can improve these programs, such as adjusting the asset
test under the Medicare Part D LIS Program so it is not so
burdensome. We will also hear about the importance of improving
outreach efforts, streamlining the application process and
increasing income eligibility limits under the MSP Programs.
For the past 6 years, President Bush and the previous
Republican-led Congress have shelled out continuous subsidies
worth billions of dollars to the prescription drug and
insurance industries in an attempt to privatize the Medicare
system. Between Medicare Part D and Medicare Advantage, they
have made out like bandits in my opinion--these programs have
been at the expense of the American taxpayer and the Medicare
beneficiaries themselves. We have talked previously about
Medicare Advantage and the different payment schedule. The time
has now come to refocus our attention and target our resources
more effectively so we can provide the most help to our most
vulnerable citizens.
I am looking forward to hearing from the witnesses today
about these programs and how they are working and how we might
be able to improve them. I appreciate your being here today,
and I now recognize our ranking member, Mr. Deal. Before I do,
let me mention that we do expect to have votes, so it may be
that we can't finish with our opening statements or may have to
interrupt the panel because I think the votes are expected
within the next half hour or so, but we will proceed until we
hear the bell. So, at this time, I will recognize the ranking
member, Mr. Deal.
OPENING STATEMENT OF HON. NATHAN DEAL, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF GEORGIA
Mr. Deal. Thank you. When I came to Congress in 1993, the
Medicare Part D monthly premium was $36.60.
Premiums are set similarly today and are adjusted each year
in an effort to ensure that Part D premiums compose 25 percent
of the program's cost. But today, at $93.50 a Medicare
beneficiary pays almost two and a half times what they paid in
1993. What has changed since I came to office is the overall
cost of health care services and in turn the price of the Part
D program.
As I am sure everyone in the room is aware, premiums will
continue to go up each year unless Congress acts to reform the
health care sector to stabilize the sky-rocketing cost of
health care services. This hearing focuses on a few programs
designed to ensure low-income Medicare beneficiaries have
assistance with their Medicare premiums and cost sharing.
The Medicare Savings Programs and the Low-income Subsidy
Program target the near poverty senior population by paying for
all or part of what is typically the beneficiary's
responsibility in Medicare. With the rising cost of health
care, these programs have a role to play to ensure our poorest
seniors continue to have access to their physicians and
medications.
Some of our witnesses today will testify that more could be
done to enroll seniors in these programs, and I certainly look
forward to their testimony. However Mr. Chairman I believe more
could be done to reform the health care industry to stabilize
premiums for all beneficiaries.
Additionally, addressing underlying health care costs would
assist those beneficiaries who may not qualify for a program
which pays for their deductibles and co-insurance. I do not
believe the answer to rising premiums and the cost of care is
simply for the taxpayer to bear this burden by shifting more
people into the Medicare rolls.
It is certainly important for the committee to evaluate the
effectiveness of our existing programs. But it is time for us
to broaden our focus and evaluate health care reforms which
address rising costs for patients with and without Medicare.
Hopefully this would ensure that, in another 14 years, the
Congress can continue to fulfill its obligation to our seniors
without forcing them to pay a premium two and a half times what
they pay today or increasing the burden on already strained
State and Federal budgets.
Thank you. I yield back.
Mr. Pallone. Thank you, Mr. Deal.
Next we have the gentlewoman from New Mexico.
OPENING STATEMENT OF HON. HEATHER WILSON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW MEXICO
Mrs. Wilson. Thank you, Mr. Chairman. I very much
appreciate your holding this hearing today.
In New Mexico, there are about 65,000 people who are
enrolled in the Medicare prescription drug benefit and in the
low-income subsidy that we have there. They get their medicines
for little or no premium and no copay and without the gap in
coverage. That is about 23 percent of the Medicare population
in New Mexico, so we have very high participation in the low-
income subsidy program. And it is saving folks a lot of money,
about $3,300 a year.
About 95 percent of the seniors in my congressional
district now have drug coverage either through Medicare Part D,
a former employer or from the Veterans' Administration, which
is one of the highest enrollment rates of any congressional
district in the country. Still there are many more seniors who
are probably eligible for the low-income subsidy but are not
enrolled. I want to commend, particularly in New Mexico, the
Social Security Administration for their efforts to find
eligible seniors and to help them enroll, particularly a
wonderful case worker named Eva Lujan who is the liaison with
the local Social Security office who has done a wonderful job
in finding seniors who might be eligible. And she has been
tremendously patient in hundreds of different forms in helping
seniors get enrolled through traveling offices and working with
our office and others.
For some people, the asset test has really prevented them
from enrolling. And I think this is one of the things we do
need to look at. In 2007, the asset test of about $11,000 for
individuals and $23,000 for a couple really may be too low to
expect people to be able to liquefy those assets and somehow
spend them on medicine. So we may want to look at increasing
those limits.
I think we also need to simplify the application process so
that seniors can make their way through the paperwork if they
are actually eligible.
I introduced legislation earlier this year that would make,
I think, several important improvements to the Medicare Part D
drug benefit. And I strongly support the benefit, and we really
have made tremendous progress in helping people to be able to
pay for their drugs and using competition in the marketplace to
keep the premiums low for everyone. That said, there are always
things that can be improved.
My legislation would allow States to use Medicare funds to
pay co-payments on behalf of dual-eligible seniors, would also
allow the Medicare Part D program to cover benzodiazepines,
which has been a particular class of drug which was written out
in the law and probably shouldn't be. It is used commonly for
seniors to relieve anxiety and treating insomnia and seizure
disorders, and I think we need to add that back in.
Medicare savings programs are also saving about 27,000 low-
income seniors in New Mexico on Part D premiums and
deductibles. I support those programs strongly as well. I look
forward to seeing how we can make these programs work better,
particularly how we can improve the communication between
agencies in the Federal Government, Medicare and Social
Security so that the Social Security folks know who is
registered in what program in a fairly tight turn around
because I think the way it is set up now we have often got
agencies who are not communicating, who are not sharing
information about eligibility of benefits, and enrollment and
it makes it much more confusing for seniors and their families.
And if we can even improve that part and make it harder to
apply, I think we would deal with a lot of the problems that
are driving the low enrollment rates as we haven't.
Thank you, Mr. Chairman, I appreciate very much your
holding this hearing.
Mr. Pallone. Thank you.
I recognize our vice chair, the gentleman from Texas.
OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Mr. Green. Thank you, Mr. Chairman, for holding this
hearing on the Medicare savings programs and low-income subsidy
available for seniors participating in Part D prescription drug
benefit.
These programs provide low-income seniors with much-needed
financial assistance with their premiums or other cost-sharing
obligations under Medicare. We have a fairly long history of
Medicare savings programs in the groups of beneficiaries they
seek to assist, specifically the qualified Medicare
beneficiaries, the specified low-income Medicare beneficiaries
and qualifying individuals. Despite the fact that this
assistance has long been available to low-income seniors,
enrollment levels unfortunately remain low. Premium and cost-
sharing assistance for qualified Medicare beneficiaries have
been available for nearly 20 years, yet only one-third of
beneficiaries eligible for this assistance take advantage of
it. Even worse, only 13 percent of the specified low-income
Medicare beneficiaries take advantage of the Part D premium
assistance available to them.
We all thought the enactment of Part D benefit and the
availability of a low-income subsidy would help increase
enrollment levels in other Medicare savings programs.
Enrollment levels are higher for low-income subsidy, with about
two-thirds of eligible Medicare beneficiaries taking advantage
of the subsidy. Yet we haven't seen a corresponding increase in
enrollment in Medicare savings programs.
A big problem is the fact that most beneficiaries seek the
extra help for Part D through the Social Security
Administration which neither screens beneficiaries for
eligibility for Medicare savings programs nor refers them to
their State Medicaid Program for screening.
We need to streamline this process to make sure that folks
are taking advantage of all the extra help available to them.
In my area of Houston, we have undertaken an education and
outreach enrollment campaign to help low-income Medicare
beneficiaries maximize their Medicare benefits. This effort has
been coordinated through Gateway to Care, a local community
access collaborative that was started with Federal dollars
through the community access program which this committee
worked to create.
Gateway to Care was one of the nine community organizations
across the country to receive a $100,000 grant as part of my
Medicare Matters initiative in the National Council on Aging,
the Access to Benefits Coalition and AstraZeneca to develop
innovative approaches to identify and reach out to low-income
people. In Houston, Harris County, Texas, we know there are
roughly 60,000 Medicare beneficiaries who qualify for these
programs but are not involved. Houston, Harris County, have
close knit communities and Gateway to Care is utilizing
community health workers who have intimate knowledge of our
medically underserved and are trusted with these communities to
reach out to beneficiaries.
Gateway to Care is also utilizing our area's 211 system
ensuring that inquiries directed toward knowledgeable folks in
our community to assist our low-income seniors. The community
approach is critical to any outreach and enrollment, and I
think My Medicare Matters demonstration will teach us a lot
about what works and about what can be improved.
Mr. Chairman, again, I thank you for calling the hearing
and our witnesses today, and I yield back my time.
Mr. Pallone. Thank you.
I recognize the gentlewoman from Tennessee.
OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TENNESSEE
Mrs. Blackburn. Thank you, Mr. Chairman, I thank you for
the hearing today.
And I want to say welcome to all of our witnesses. It is
important to recognize that programs such as the Medicare
Savings Program and Part D low-income subsidy were created to
address the needs of a specific population, and they have
provided great benefit to those low-income individuals who
might otherwise go without their medication. And as we have
seen with programs like Medicare Advantage, the Government has
been successful in providing access to quality care for low-
income individuals.
Today, instead of discussing how CMS is progressing with
the administration on these programs, we are listening to a
discussion on further expansion of entitlement programs. This
is exactly what happened in my home State of Tennessee with the
TennCare Program, Tennessee's State-wide nearly universal
health care service run by the State.
In 1994, Tennessee implemented managed care in its Medicare
Program and used savings anticipated from the switch to expand
insurance coverage to the uninsured, uninsurable adults and
children. The State basically allowed carte blanche enrollment
to anyone. And those people could never get out of the system,
even when they decided they wanted to get out of that system.
Since then, Tennessee has faced financial peril in numerous
unsuccessful attempts to reign in the State's runaway health
care system. State spending accelerated from $2.5 billion in
1995 to $8 billion in 2004 for TennCare alone.
To date, TennCare has consumed over one-third of our
State's budget.
Combined State and Federal funding could not sustain
TennCare's rising costs, and the program effectively lowered
the quality of health care available to all Tennesseans. If
Tennessee can't even pay for the program it has, how is the
Federal Government going to pay for the unsustainable expansion
of current entitlement programs down the road?
I can tell you exactly what continued expansion in Medicare
and Medicaid will do to our Nation using TennCare as a model.
Since TennCare's inception, Tennessee's doctors and hospitals
charged that the $8 billion program was underfunded by the
State and Federal governments, forcing providers to bear
disproportionately higher costs. Rampant fraud and abuse have
plagued the problem. Hospitals have gone out of business, and
the poor cannot find providers to take care of them.
Mr. Chairman, I know what runaway health costs and a broken
health care delivery system look like. Health care and TennCare
are clear evidence that Government managed health care programs
allow for serious mismanagement, cost overruns and inadequate
service. We have to be very diligent in the oversight. Rather
than encouraging expansion of inefficient, ineffective
Government bureaucracy in every day health care, I hope we will
promote economic growth in the health care marketplace through
the private sector, an area that has proven time and again to
foster competition, reduce cost and provide choices and options
for our consumers. I thank you, Mr. Chairman, for the hearing.
And I yield the balance of my time.
Mr. Pallone. Thank you.
Mr. Matheson.
Mr. Matheson. Mr. Chairman, I appreciate you calling the
hearing. I look forward to hearing from this panel, and I am
not going to make any more opening statement than that. I yield
back.
Mr. Pallone. Thank you.
Mr. Burgess.
Mr. Burgess. Thank you, Mr. Chairman. I will reserve time
for questions.
Mr. Pallone. Ms. Solis.
OPENING STATEMENT OF HON. HILDA L. SOLIS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Ms. Solis. Thank you, Mr. Chairman. I do want to make a
comment. I want to thank you for having this hearing and to
welcome our witnesses that are here today. It is very important
that we have the discussion on Medicare savings plans and low-
income subsidies for our seniors. I represent a very diverse
district, highly low-income, heavily Hispanic and large Asian
population, so of course, you can imagine the kind of problems
that they confront. They deal with problems such as language
access, not being able to access current programs that are
available and also inadequate numbers of staff, adequate staff
available at these key sites where people can gain information
and trust.
And one of the things I am working on this year, Mr.
Chairman, is a piece of legislation to look at how we can
provide support to community workers, community organizers that
can help us go out and reach these seniors, particularly in the
hard-pressed areas where we could help navigate them through
the system to apply where appropriate for these programs and to
better understand what options they have. Of course, premiums
will vary over various programs, and I think that the more
tools and information that we give our community in their
language that is legitimate in terms of linguistic and
culturally competent services, we know in the long run we can
save a lot of money.
So I am promoting that, and I look forward to listening to
the testimony from you, and I will submit the remainder of my
statement. Thank you, Mr. Chairman I yield back.
[The prepared statement follows:]
Prepared Statement of Hon. Hilda L. Solis, a Representative in Congress
from the State of California
Mr. Chairman, thank you for holding this hearing today to
discuss the importance of Medicare Savings Plans and Low Income
Subsidies for our seniors and disabled individuals. Seniors
were promised that after a lifetime of working and paying into
Medicare, they would have access to health care coverage during
their retirement years, regardless of their geographic
location, their age, or their income.
Today, more than 44 million seniors and people with
permanent disabilities depend on Medicare to meet their health
needs. However, health care costs have skyrocketed, and Part B
premiums and other out-of-pocket expenses are quickly becoming
unaffordable. For instance, Part B premiums are $93.50 this
year, which is over $1,100 per year. In addition, the Part A
deductible is almost $1,000.
The 2003 Medicare Current Beneficiary Survey found that
Medicare beneficiaries in poor or fair health had $2,980 in out
of pocket spending, in addition to another $661 in premiums.
This is particularly troublesome given the importance of access
to quality, affordable health care in minority communities
which often encounter greater burdens of disease. They
consequently have greater need for medical services but are
less likely to afford them.
Low-income Medicare beneficiaries are disproportionately
people of color who need help with paying for Medicare's cost-
sharing, including premiums, deductibles, and coinsurance.
Although Latinos make up only 6 percent of all Medicare
beneficiaries, more than 14 percent are low income seniors.
This is why the Medicare Savings Programs and Low Income
Subsidy Program are critical for our vulnerable populations.
We need to make sure that people are getting the financial
help they need. We must change the Low Income Subsidy's asset
requirement so that seniors still have incentives to save for
retirement We must also work to help the 3 million people who
do not have drug coverage but are eligible for the subsidy.
Appropriate outreach to inform hard to reach seniors about
these programs is essential. Having timely access to health
services and prescription drug coverage can be a matter of life
or death.
I thank the witnesses for coming today, and I look forward
to hearing their recommendations about how we can reduce
barriers to enrollment for these programs.
I yield back the balance of my time.
----------
Mr. Pallone. Thank you.
The gentleman from Arizona.
OPENING STATEMENT OF HON. JOHN B. SHADEGG, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ARIZONA
Mr. Shadegg. Thank you, Mr. Chairman, and thank you for
holding this hearing. When the Congress contemplated the Part D
in the Medicare Modernization Act, I was firmly of the belief
that there was a population in America which desperately needed
help. Those for whom people were making a decision or they were
forced to make a decision between paying their rent or
purchasing their drugs; those who were forced between buying
food for their table or purchasing their medications. And I
think we all know sadly many of these people would make the
necessary choices of paying for their rents or purchasing their
food rather than buying the drugs they need. That, of course,
is counterproductive and damages their health.
So I think it is important that we look at how the program
is operating. And I commend you for holding this hearing, and I
also welcome our witnesses.
I have a concern as the evidence has mounted that
enrollment continues to be a problem. It has been an issue in
many Government programs. We see it as an issue in the SCHIP
where we just continue to have a difficult time encouraging
people or getting people to enroll.
And anecdotally, I know that in my own State of Arizona,
when the SCHIP was enacted, time and again, we ran into this
problem where people said, I would just as soon not enroll. I
know I can go here and get care. I know I can go there and get
care. And I don't want to go through the paperwork burden of
enrolling.
So it seems to me it is incumbent upon us to look at ways
to try to make sure that people are getting the benefits they
are seeking and to get enrolled in these programs.
In that respect, I would like to make a comment, Mr.
Chairman, about an initiative I have been pushing since I
entered Congress, and that is trying to make the change from
life before Medicare to life after Medicare less dramatic.
In that respect, I have introduced in Congress now for the
past 10 years legislation that would give a tax credit, and
specifically a refundable tax credit, to Americans to get
health care and to purchase their drugs. It is important to
understand that a refundable tax credit is a tax credit where
the Government simply hands you cash and that what this program
would look at is that the Government would say to anyone, if
you will go out and buy a health insurance plan, and it could
be a plan that has at least a certain minimum drug coverage, we
will allow you either to reduce the amount of taxes you pay,
but in this instance, for the poor--the audience we are talking
about for this hearing--it will say, we will pay and we will
actually give you the cash to go buy that plan. It seems to me
that one of the difficulties in getting people to enroll in a
Government plan is that they find it confusing and they find it
difficult and they don't enjoy it or they resist the
bureaucracy of enrolling in such a program.
If in fact the poor in America, those that we are talking
about, those who are in need of assistance to buy their
everyday drugs, those forced into the decision of making a
decision between paying the rent and buying the groceries and
buying the drugs they need, if they were to know ahead of time
that even before they became Medicare eligible they were
getting a refundable tax credit, that is cash to purchase the
drug benefit they needed and the Medicare health care or health
care plan they needed and then, once they become Medicare
eligible, the same thing were true, I believe we might overcome
many of the enrollment problems.
And I believe that that type of a system which provides
payment directly for their health care plan or, in this
instance their drug program, would be a step forward and might
help us overcome the enrollment issue we face. So I look
forward to hearing the testimony. I do have a conflicting
hearing which I might have to step out from time to time, but I
thank you, Mr. Chairman, for holding this hearing.
Mr. Pallone. Thank you. The gentlewoman from Wisconsin.
OPENING STATEMENT OF HON. TAMMY BALDWIN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WISCONSIN
Ms. Baldwin. Thank you, Mr. Chairman, and thank you to the
witnesses who join us today. I appreciate the fact that we are
highlighting these important programs, whether we are talking
about the Medicare savings programs or the Part D low-income
subsidy, they all serve an important purpose which is to ensure
that low-income seniors have some help in paying for their
premiums, deductibles and copayments or more simply these
programs make sure that low-income seniors can access health
care.
These programs are vitally important, and I look forward to
hearing about ways to improve these programs and more
specifically to improve coordination between these programs.
I am particularly interested in hearing more from our
witnesses regarding the asset test part of the Part D low-
income subsidy. This asset test penalizes those seniors who
have saved a little bit of money in the bank for a rainy day.
This might not be something that my generation and those
younger are so good at. But our seniors, the Greatest
Generation, they know the value of a penny saved. And I have
heard from many seniors in Wisconsin who applied for the Part D
low-income subsidy and were then denied because of their modest
possessions. Maybe it is a small house that they have owned for
the last 40 years or a small savings account, but these are not
seniors with millions of dollars in the bank by any means.
We shouldn't be telling our seniors that, in order to get
help paying their Medicare costs, they have to give up all of
their modest financial security. This isn't right. And I look
forward to the committee addressing this issue.
Additionally, I think that we should be making it as easy
as possible for all of our seniors to enroll in these programs.
Burdensome paperwork and lengthy application processes will
only deter those who may need the help the most from seeking it
in the first place. So thank you to the witnesses for their
willingness to join our discussion today. I look forward to
hearing your suggestions on how we can improve these programs
to make sure they help even more seniors in affording their
health care. Thank you, Mr. Chairman.
Mr. Pallone. Thank you. The gentleman from Pennsylvania.
Mr. Murphy. I am going to reserve mine for the record. I am
looking forward to hearing the testimony, Mr. Chairman.
Mr. Pallone. Mr. Allen just came in.
Mr. Allen.
Mr. Allen. Mr. Chairman, I will waive my opening statement.
Mr. Pallone. OK, thank you. I think we are completed with
the opening statements by the members and any other statements
for the record may be included at this time.
[The prepared statements of Messrs. Dingell and Towns
follow:]
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Mr. Pallone. We will now turn to our witnesses.
And first of all, welcome to all of you. Thank you for
being here today and let me do a little introduction of each of
you. Starting on the left, or my left, is Ms. Monica Sanchez,
who is deputy director of the Medicare Rights Center here in
Washington. Mr. John Coburn, who is director for the Make
Medicare Work Coalition, health and disabilities advocates, and
he is from Chicago, Illinois. And then we have Ms. Lilla
Sassar, who is a beneficiary, and she is from Alabama. And then
we have Gail Clarkson, who is the chief executive officer of
the Medilodge Group. And she is from Bloomfield Hills,
Michigan. She is testifying on behalf of the American Health
Care Association. And last, is Dr. N. Joyce Payne, who is a
member of the Board of Directors of AARP, and she is based here
in Washington, DC.
Let me say that we will have 5-minute opening statements,
and they become part of the hearing record. And you may, at the
discretion of the committee, submit additional statements or
comments in writing for inclusion in the record, and I will
start with Ms. Sanchez.
Thank you.
STATEMENT OF MONICA SANCHEZ, DEPUTY DIRECTOR, MEDICARE RIGHTS
CENTER, WASHINGTON, DC
Ms. Sanchez. Chairman Pallone, Ranking Member Deal, members
of this committee, thank you for this opportunity to testify on
the Medicare Savings Program and Extra Help.
The Medicare Rights Center is the largest independent
source of health care information and assistance for people
with Medicare in the United States. We know, from the
experience of the people we serve, that the assistance
available through Extra Help and the Medicare Savings Program
enables poor Americans to obtain the medical care they need and
the medicines they are prescribed. Access to these programs can
mean a healthy life instead of one of illness and premature
death.
People who are eligible for Medicare Savings Program are
more likely to be African American or Latino. They are more
likely to be an older female living alone and in poor health.
The good news is that those who are eligible and enrolled are
more likely to see a doctor and other health care provider and,
as a result, they have improved health.
Just last week, an MRC counselor at the One Stop Senior
Center on West 90th Street in New York met Altagracia Lopez.
Ms. Lopez is 72 years old. Born in the Dominican Republic, she
has lived in the U.S. for 40 years, working in a factory,
stitching together children's clothes. She gets by on $343 a
month, $100 in food stamps and lives in public housing.
When Ms. Lopez had original Medicare and Medicaid, her
doctor visits were free. But she was still paying the Part B
premium because she was not enrolled in an MSP. Things got
worse when she was tricked into enrolling in a Medicare HMO
which charged her up to $25 for doctor visits. The plan lost
its record of Ms. Lopez's eligibility for Extra Help which she
had because she is enrolled in Medicaid. Instead of co-payments
of a few dollars under Extra Help, she was asked to pay $127
for a medicine to prevent blood clots and $42 for her diabetes
medicine.
We were able to convince her HMO that it is required to
charge Ms. Lopez the $1 and $3 Extra Help co-payments so she
was able to get the medicine she needs--to also get the
medicine she needs to control her high blood pressure. We also
enrolled Ms. Lopez in the Qualified Medicare Beneficiary
Program, QMB, and helped her dis-enroll from the HMO. As a
result, she will no longer have the Part B premium deducted
from her monthly Social Security check and does not have any
out-of-pocket costs when she goes to her doctor.
Ms. Lopez's story illustrates a common problem, persistent
breakdowns in data exchanges between State Medicaid offices,
the Centers for Medicaid and Medicare Services, the Social
Security Administration and the companies providing the Part D
benefit. These result in low-income people with Medicare who
should be receiving Extra Help instead facing deductibles and
co-payments that they cannot afford.
Ms. Lopez's story also shows the complicated interaction
between Medicaid, Medicare Savings Program and Extra Help and
how even individuals who are enrolled in some assistance
programs are often not getting all the help that they should
be.
Another of our clients is Ms. H, a widow who lives in
Manhattan, New York. She is 74 years old and a typical example
of someone whose assets disqualify her for Extra Help. She
receives $400 a month from Social Security and works part-time
to earn an additional $500 to make ends meet. Because she has
$12,000 in assets, just $292 over the limit, she is not
eligible for Extra Help. But because she lives in New York
State, which has eliminated the asset test for the QI Program,
we were able to get her enrolled in Extra Help through this
back door.
For every person we enroll in MSPs or Extra Help, there are
millions more who do not know the help is available or who do
not know how to apply for it. Nationally, there are still
between 3.4 and 4.7 million people who qualify for this program
but are not enrolled. According to CMS estimates, there are
nearly 22,000 such people in the counties that make up New
Jersey's sixth district and over 16,000 in the 15 counties of
Georgia's ninth district. The same story can be told district
by district.
How do we fix this situation?
First, Congress should remove the asset test from both the
MSP and Extra Help Programs and allow people to qualify based
solely on income criteria. Legislation introduced by
Representative Lloyd Doggett, Democrat of Texas, takes a small
but meaningful step in the right direction by raising the
maximum allowable assets for Extra Help and takes some
important steps towards simplifying the Extra Help application.
Second, as Congress moves to improve the Extra Help
Program, it should also take steps to bring the Federal
eligibility criteria for MSPs in line with these new, more
reasonable standards for Extra Help. Individuals enrolled in
MSP are ``deemed'' eligible for Extra Help. If criteria were
aligned, then deeming could go both ways. With two-way deeming,
people with Medicare would actually receive the help that
Congress promised them.
Third, Congress must make sure CMS exercises its oversight
responsibilities to ensure the plans are not overcharging their
low-income enrollees. It also has to make sure the agencies fix
these data exchange problems. The alignment of eligibility
criteria between MSPs and Extra Help will simplify and
streamline these programs and contribute to the solution.
Thank you.
[The prepared statement of Ms. Sanchez follows:]
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Mr. Pallone. Thank you very much.
Mr. Coburn.
STATEMENT OF JOHN COBURN, DIRECTOR, MAKE MEDICARE WORK
COALITION, HEALTH & DISABILITY ADVOCATES, CHICAGO, IL
Mr. Coburn. Chairman Pallone, Ranking Member Deal and
distinguished members of the committee, thank you for giving me
the opportunity to talk to you today about these two important
programs and their impact on people with disabilities.
My name is John Coburn, and I am a senior attorney for
Health & Disability Advocates and I am the director of the
Illinois-based Make Medicare Work Coalition. My agency, our
coalition and its partners have assisted hundreds of thousands
of beneficiaries in Illinois and other parts of the country
with Medicare Part D enrollment and advocacy over the last year
and a half. While we assist and advocate for all Medicare
beneficiaries, I want to focus my testimony on Medicare
beneficiaries with disabilities under the age of 65.
There are approximately 7 million younger individuals with
disabilities enrolled in Medicare, representing approximately
16 percent of the Medicare population. Most of these
individuals qualify for Medicare because of current or former
eligibility for Social Security Disability Insurance SSDI and
completion of the required 24-month waiting period. For these
younger beneficiaries with disabilities, the Medicare Savings
Program and low-income subsidy program are very important.
The average SSDI check is $950 a month. If the average SSDI
beneficiary was forced to pay all of the Medicare cost sharing,
Medicare would simply be unaffordable. With the assistance of
these programs, many individuals are able to access proper and
necessary care under Medicare.
In my limited time before you, I want to focus on one very
important issue to Medicare beneficiaries with disabilities and
that is employment's impact on continuing eligibility for this
program. I did not get a chance to read Ms. Sanchez's testimony
before, but she did mention, I think, in both of her examples
the individuals were working. So this is a big issue,
particularly in the younger disability community.
Individuals with disabilities want to live securely and
safely in their communities. Employment within the community is
a key component of integration into the broader communities in
which people live. A 2004 National Organization on Disability/
Harris Survey, according to that survey, states that only 35
percent of people with disabilities reported being employed,
yet 72 percent of individuals with disabilities surveyed wanted
to work.
Over the years, Congress, the Social Security
Administration and the Centers for Medicare and Medicaid
Services have worked to create and implement programs and
policies that remove barriers to employment of working-age
Medicare beneficiaries. The hallmark legislation for this was
the Ticket to Work and Work Incentives Improvement Act of 1999,
which included provisions that extended Medicare eligibility
for people who return to work.
Through this and other legislation and regulations, the
Social Security cash programs and Medicaid fell in line and
created an atmosphere where working was rewarded and a path
towards greater self-sufficiency was possible. Unfortunately,
our Medicare Savings Program and our low-income subsidy program
which came along later don't fall in line with this process.
And since Medicare Part D has started, the low-income subsidy
has erected a new barrier, wherein people don't want to go back
to work for fear of losing their low-income subsidy.
Increases in earned income, even slight, can disqualify
people from eligibility for these two programs. We put people
in a catch-22. Stay at home, do nothing and keep affordable
insurance or go to work and lose the affordable part of that
insurance that allowed you to work to begin with.
And what choice do we leave for individuals with HIV,
multiple sclerosis and mental illness? Ms. B is an individual
in Ohio who is currently receiving $850 in SSDI income, QMB
assistance and the Low-Income Subsidy. Ms. B lives with a
mental illness, and she wanted to go back to work. She actually
went out and found full-time employment. She then discussed her
situation with advocates and discovered that if she were to
take that employment, she would lose her QMB assistance and her
Low-Income Subsidy, thereby making it nearly impossible for her
to afford the health care that was provided to her that got her
to the point where she can work to begin with.
There are Medicaid buy-in programs in 32 of our States.
Many of the members live in States where those programs exist,
but there are many others who don't, including Georgia,
Florida, Ohio and North Carolina. In those States, people can
purchase Medicaid; and it gives them the dual-eligible status
where they can get the Low-Income Subsidy. In those other
States, that is not possible.
But it doesn't have to be this way. In the SSI,
Supplemental Security Income, Medicaid world, we allow people
through something called 1619(B) to go back to work and keep
their Medicaid with no spend-down until they reach a State
threshold. The SSDI beneficiaries with the Low-Income Subsidy
and the Medicare Savings Program do not have this option. I
hope that eventually the programs will align, and the SSDI
beneficiaries will be encouraged and go back to work and keep
their affordable health care.
Thank you.
[The prepared statement of Mr. Coburn follows:]
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Mr. Pallone. Thanks a lot. We will hear from Ms. Sassar.
Thank you for being here today.
STATEMENT OF LILLA SASSAR, BENEFICIARY, SYACAUGA, AL
Ms. Sassar. I am so grateful that I have an opportunity to
tell my story. It is very short, but it has impact, and you can
understand it real well.
I am Lilla Sassar, as you all know, from Syacauga, Alabama.
I am 83 years old, and I am enrolled in HealthSpring Medicare
Advantage Plan. It is the best thing I have ever had since I
have been on Social Security.
I am on a very limited income, and I do get assistance from
the State. My Social Security premium is paid by the State of
Alabama.
Now that I am enrolled with HealthSpring, I can afford to
put food on the table and buy my medicines, too, and go to the
doctors when I need to. I go to the doctor, and I won't have to
worry about my deductibles, about my Blue Cross/Blue Shield and
about my medication. I won't pay because I have no co-payment.
It is so terrible to have to worry about these things.
I also get to exercise through my HealthSpring membership
at a local hospital. I get to stay in shape and see my friends
with the Silver Sneakers.
HealthSpring even has a van pick me up and take me to the
doctor if I have to go to a doctor. This is good because I have
a hard time getting to the doctor. If they didn't offer this
benefit--it sure cuts down on expensive gas. They bring me back
home, too.
I wish everyone could have a program like HealthSpring.
People like me that don't have a lot of money can still see the
doctor and get medicines and don't have to worry. This program
that I am on would help a lot of people, and I am so glad I had
an opportunity to have a little input for others, not just for
myself but for others, too. They need to get on HealthSpring.
Thank you for listening to me.
[The prepared statement of Ms. Sassar follows:]
Statement of Lilla Sasser
<bullet> I am an 83 year old woman enrolled in HealthSpring
Medicare Advantage Plan
<bullet> I am on a very limited income and used to get
assistance from the State.
<bullet> Now that I am enrolled with HealthSpring, I can
afford to put food on the table and buy my medicines and go to
the doctor when I need to.
<bullet> I get to go to the doctor and not worry about how
I will pay because I have a $0 copayment.
<bullet> I also get to exercise through my HealthSpring
membership at the local YMCA or other facilities. I get to stay
in shape and see my friends.
<bullet> HealthSpring even has a van pick me up and take me
to the doctor and pick up my medicines. This is good because I
would have a hard time getting to the doctor if they didn't
offer this benefit.
<bullet> I wish everyone could have a program like
HealthSpring. People like me that don't have a lot of money can
still see the doctor and get medicines and not have to worry.
Thank you for listening.
----------
Mr. Pallone. Thank you very much. We appreciate you being
here today.
Let me just say what we are going to do. We are going to
try to do both of the other two panel members and then take a
break. There is a 15-minute vote followed by four 5-minute
votes, and those are the last votes of the day. So that will
probably take us maybe 45 minutes. But let's continue with the
testimony, and then we will break and come back.
Ms. Clarkson, thank you.
STATEMENT OF GAIL CLARKSON, CHIEF EXECUTIVE OFFICER, THE
MEDILODGE GROUP, BLOOMFIELD HILLS, MI, ON BEHALF OF THE
AMERICAN HEALTH CARE ASSOCIATION (AHCA)
Ms. Clarkson. Thank you, Mr. Chairman, Ranking Member Deal
and members of the committee. I appreciate the opportunity to
speak to you today on behalf of the American Health Care
Association and NCAL.
My name is Gail Clarkson. I am the chief executive officer
of Medilodge. Our 14 skilled nursing and 4 assisted living
facilities employ 2,500 individuals and care for more than
2,300 patients and residents in the State of Michigan.
I have worked as a nursing home administrator, director of
nursing and an intensive care nurse. I know what it takes to
provide high-quality care for seniors and people with
disabilities, even when the payments do not cover the care and
services they require. I mention this because Medicaid
underfunds long-term care by approximate $13 per patient per
day nationally and because quality depends on stable funding,
something CMS has repeatedly acknowledged.
Most nursing home patients are both poor and elderly,
relying on Medicaid and Medicare to pay for their long-term
care. So nursing homes have worked long and hard to coordinate
care for these dually eligible patients and residents to ensure
that these vulnerable Americans get the best care available.
AHCA and NCAL continue to work closely with CMS on Medicare
Part D. I am proud to say that no patient or resident being
cared for in a skilled nursing facility went without his or her
medication during the transition to the new prescription drug
benefit. I do not know if the same can be said for the other
poor elderly.
Dually eligible beneficiaries in assisted living or
residential care facilities or other home-like settings often
only have a small personal needs allowance of a few dollars a
month, so co-pays of even $1 or $3 can add up when that person
needs multiple prescriptions. Like nursing home patients,
assisted living residents need, on average, approximately nine
medications a day.
The Home and Community Services co-payment Equity Act
recently introduced in the Senate would eliminate Part D co-
pays for these low-income Americans and would put dually
eligible home and community-based individuals on par with those
in nursing homes who have no co-pays under Part D. We urge the
members of the committee to enact companion legislation.
Programs like Medicare Part D and the Low-Income Subsidy
are critical parts of the health care safety net in this
country, but what I have found in practice is that accessing
these programs can be challenging, as was the case with the
auto-enrollment of dually eligible nursing home residents under
Part D.
For example, we spent considerable time and effort
identifying which Part D plan patients had been automatically
enrolled in, and then in determining whether or not that plan
met the patients' needs. AHCA and NCAL worked with CMS on what
it calls the three-pronged approach to assure that the poor
elderly entering the facility and needing prescription drug
coverage could access their benefits under Medicare and
Medicaid.
Our experience shows that Low-Income Subsidy can take
effect in only a couple of weeks, whereas it can be months
before Medicaid eligibility is determined. But, in my
experience, I have found that patients, families and health
care providers are unaware of these benefits or even know how
the Medicare and Medicaid benefits work with respect to long-
term care needs. So we often must educate and assist patients
in accessing these critical benefits.
AHCA and NCAL understand that retrofitting a new benefit is
not easy. That is why we have looked at ways to reform Medicare
and Medicaid to better meet the needs of a swiftly aging baby
boom generation. Our recommendations are included in my written
testimony.
Providing high-quality long-term care is a top priority for
me and for AHCA and NCAL members like me, who are participating
in a national campaign to improve quality of care and quality
of life for our patients, residents and staff alike.
We are proud of our commitment to quality and are proud the
data is proving our commitment is real. Nursing Home Quality
Initiative data shows improvement in pain management, reduced
use of restraints, decreased number of patients with depression
and improvements in physical conditions such as incidents of
pressure ulcers. Last week, independent satisfaction data was
released that shows 82 percent, the vast majority of nursing
home residents and families, would rate care as good or
excellent.
Even as we strive to deliver the best care possible, we
still face considerable challenges and seek your assistance in
meeting those needs. We are working to be transparent for our
consumers. We ask CMS to be similarly transparent in the
criteria it uses to oversee the care we provide. We also ask
that CMS not place paperwork over patient care and thank
Chairman Dingell and those who have already called on CMS to
redress its final rule on blood glucose monitoring.
We are proud of our successes and acknowledge there remains
far more to do. Mr. Chairman, I have never seen our profession
more committed to ensuring we continue to improve care quality.
In short, we recommend working toward a system that
delivers an array of long-term care services, adequately
funded, administered by knowledgeable, quality-driven providers
and where beneficiaries move seamlessly to a long-term care
spectrum which every American is likely to need at some point
in his or her life.
AHCA and NCAL stand ready to work with your committee and
with all who have a stake in the future of our long-term care
delivery system in the future. Thank you.
[The prepared statement of Gail Clarkson follows:]
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Mr. Pallone. Thank you, Ms. Clarkson.
Dr. Payne.
STATEMENT OF N. JOYCE PAYNE, MEMBER, BOARD OF DIRECTORS, AARP,
WASHINGTON, DC
Ms. Payne. Chairman Pallone and Ranking Member Deal, I am
Dr. Joyce Payne, a member of the Board of Directors of AARP.
Thank you for inviting us to testify on the need to improve
the Part D Low-Income Subsidy and other Medicare programs for
people with limited incomes.
The extra help the 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. But the LIS
Program has a serious flaw, an asset test. No one with even $1
more than $11,710 in savings or couples 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 many 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 MSP, that help pay 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 are automatically eligible for
and enrolled in 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 all together. Thus,
many who are eligible for LIS under their State's MSP rules are
being improperly rejected because SSA, the Social Security
Administration, of course, only looks at LIS criteria.
AARP believes there should be no asset tests in Medicare.
As a matter of public policy, we should encourage people to
save for retirement, not penalize those who do with an asset
test. 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 the
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 the 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
it already has 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 this year and eventually completely eliminating the
asset test for both LIS and MSP. We look forward to working
with the Members of Congress on both sides of the aisle to
improve the Medicare drug benefit and Medicare Savings Program
to ensure that all Medicare beneficiaries living on limited
incomes get the extra help they need so desperately and
deserve.
We thank you for this opportunity.
[The prepared statement of Ms. Payne follows:]
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Mr. Pallone. Thank you all.
Now we are going to take five votes. It will take us
between a half hour and 45 minutes, probably more like 45
minutes, but we will ask you to stay so we can come back and
ask you some questions.
Thank you. The subcommittee is in recess.
[Recess.]
Mr. Pallone. The subcommittee is called to order again.
We are going to have questions from the various Members. I
am pretty sure most of them will come back.
I will start by recognizing myself for 5 minutes, and I
wanted to start out with Dr. Payne.
We heard from Ms. Sassar that she likes her Medicare
Advantage private plan. She receives some additional benefits
that she described and I am certainly glad about that. The
truth, however, is that the Medicare beneficiaries who choose
to remain in traditional Medicare, 83 percent of all
beneficiaries, are forced to subsidize these additional
benefits, such as Ms. Sassar's, because of the way private
plans and Medicare are financed.
In fact, each Medicare beneficiary who chooses to remain in
traditional Medicare is forced to pay $24 extra every year in
Part B premiums to subsidize the extra benefits that only the
17 percent of beneficiaries enrolled in plans receive. And
those additional dollars are used to subsidize private plans,
administrative costs, marketing costs, aging commissions,
profits in addition to some extra benefits. And by way of
contrast, the Medicare Savings Program provides low-income
seniors with a more generous benefit than Medicare Advantage
plans. Under the MSP, the lowest income seniors will have their
Part B premiums and Medicare cost sharing paid for, a value of
about $3,700 next year.
According to the Administrator of CMS, beneficiaries
enrolled in MA plans received a total benefit of a little over
$1,000 this year; and traditional Medicare does not have to pay
aging commissions, marketing costs and all these other costs.
So I wanted to ask you, Dr. Payne, would you agree that
expanding the Medicare Savings Program is the most equitable
way to target additional benefits to low-income seniors?
Ms. Payne. We are certainly glad that Ms. Sassar is
enjoying the benefits of Medicare Advantage. But the truth is
that she does not get the kind of benefits that one would get
under the Medicare Savings Program and under the Low-Income
Subsidy Program in terms of additional assistance for paying
her premiums. We think that all of the participants should have
an option, and Medicare Advantage may be good for some people,
but it certainly doesn't provide the kind of advantages that
one would get under the Medicare Savings Program and the Low-
Income Subsidy.
In addition to that, we are strongly supportive, of course,
of eliminating the asset test, of streamlining the process, of
having greater continuity between the two programs and, we
think, any opportunity to align those programs so that we can
have greater choices but at the same time have greater
continuity with improved efficiency.
Mr. Pallone. Well, thank you.
And, Ms. Sanchez, Dr. Payne talked about the inefficiencies
and inequalities of overpaying Medicare Advantage plans. Could
you comment on that but also talk about Ms. Lopez's story and
her interaction with the Medicare Advantage plan?
In addition, can you tell us more generally about your
clients' experiences with Medicare Advantage marketing abuses,
the higher co-pays, dual sometimes pay under Medicare Advantage
or what are some other consumer problems you have seen seniors
and people with disabilities having to endure under the
Medicare Advantage Program?
Ms. Sanchez. Certainly. We do, like Ms. Sassar, have people
who are happy in their HMO, and we even sometimes help people
enroll in an HMO when it seems to suit their needs. The problem
we see a lot is that, unlike Medicare, it doesn't ensure their
care over the long term. It is not something that is always
there for them.
The benefits change year to year, and people don't know how
to read those notice of change. They don't know what is going
to happen the next year or the plan drops out.
We had one client that has been in five HMOs that have
dropped him over the years, and he says ``no more'' because of
the problems with the continuity of care. The doctor can drop
out of the plan; the plan can stop the contracts with
providers.
We had a call from someone in Miami whose mother has
cancer, and was getting care at a hospital. Mid-year, the plan
dropped that hospital from the contract, and she couldn't
change anymore. She couldn't change to another plan that would
cover that hospital.
So the continuty of care problems are enormous; and, also,
you need in some ways to help people even try to figure out
what plan would be good for them. You need a crystal ball,
because you don't know what disease is going to come down the
line, what care you are going to need in a few months or
towards the end of the year, and, unlike with Medicare and MSP
or Medicare or Medigap, that will cover you no matter what you
need, you really have to make sure you have picked the benefits
that you are going to need in this plan, and you are locked for
in a year.
We have seen a tremendous amount of marketing abuses. Like
Ms. Lopez, she was convinced that this plan would offer her all
these extra benefits that were actually covered by Medicaid,
and we hear that a lot when we hear presentation from marketing
people, that we will cover transportation, but Medicaid covers
transportation. A lot of these benefits in the end don't outdo
the out-of-pocket costs, and they end up having to pay for
their regular care and the chronic care that they need like the
doctor visit co-pays and very high hospital co-pays.
Mr. Pallone. All right. Thank you very much.
The gentlewoman from California.
Ms. Solis. Thank you, Mr. Chairman.
I want to apologize for not being able to hear all the
testimony, but we did receive your testimony in writing, and I
do have some questions for Monica. This is for Ms. Sanchez.
I also want to touch on some of the issues that were raised
earlier about people or individuals that we represent that may
not understand translated information to them appropriately and
how that care can be improved upon; and we are also looking at
populations that have lower literacy levels in many cases, as I
mentioned in my opening statement. I would like to get your
feedback on what kinds of things we can do to help improve that
and things that you have seen out in the field that might be
helpful for us.
Ms. Sanchez. We work very hard to maintain several people
with different language skills in our organization, but, in the
end, I think only streamlining the application process and the
services will help.
For example, we are in New York, and there is a tremendous
number of different languages, different cultures, and as much
as we try to help individuals in explaining these complicated
programs to them, unless the programs can be simplified, we are
never going to be able to reach everybody on an individual
basis to try to explain all this incredibly complicated
information.
Ms. Solis. So are you suggesting that perhaps more
uniformity in those applications or that----
Ms. Sanchez. Yes. Certainly. Because, right now, the
criteria for the MSPs varies by State; and they are very
different from the Extra Help. So people don't even know that
when they fill out one application or they have been deemed for
one program that there are other programs available. They are
not told, generally. And if they went through the process of
filling out one application or found an advocate that could
help them with one application, I see no reason why they should
then have to fill out five other applications for different
programs. Streamlining all the assistance programs would help
tremendously in helping people get the programs they need.
Ms. Solis. One of the issues I constantly come across is
data collection and being able to really assess where these
populations are that are hard to get, and anyone on the panel
can speak to that. I would appreciate information that you
might have of how we might do a better job doing that.
Ms. Payne?
Ms. Payne. Well, we already know the Social Security
Administration has already used income data to work on the
premiums for Part B. So, clearly, we could authorize the Social
Security Administration to use that same data to reach those
eligible for the MSP programs as well as the Low-Income
Subsidy. I mean, they are already doing some of that for the
Medicare Savings Program, so it seems to me that we ought to
give them the authorization to extend that to the Low-Income
Subsidy. That is what the Prescription Drug Coverage Act would
do, and that is why we are supporting it.
I do think it is also important to go back to your first
question to identify some of the activities that AARP is
involved in. We have made a tremendous effort at getting
involved with the Latino community. We just had a major
conference with I think close to about 16,000, 17,000 people in
Puerto Rico. We do publish a magazine in the language of the
community, and we have held town hall meetings all across the
country. We issue briefs for the States to follow in terms of
information. We have also published a number of papers and
magazines. We have inserts and magazines in all of the
languages that we are serving. So we think that it is very
important that we meet those communities where they are in
terms of their language skills.
Ms. Solis. I have one last question. This is directed to
Dr. Payne. It kind of falls along the same lines that our
chairman was asking.
There has been some controversy regarding Medicare
Advantage overpayments. While some low-income beneficiaries in
the private insurance plans may be happy with the care they are
receiving, overpayments to private insurance plans and Medicare
are reducing the trust fund's solvency and are raising premiums
for all beneficiaries. 35.5 million Medicare beneficiaries who
are not in private plans pay more premiums for the 8 million
who are in those plans. Some plans limit the providers that
beneficiaries can see relative to regular Medicare. Would you
say that using MSP or the LIS would more equitably, efficiently
and effectively help low-income beneficiaries with their
Medicare cost sharing?
Ms. Payne. I think I sort of alluded to that in response to
the chairman's questions. We think there ought to be a level
playing field between both of those programs--between all of
the programs, rather. We recognize, as I indicated earlier,
that those in the MSP programs and LIS will get greater help in
paying their premiums. Those in the Medicare Advantage will not
have that same opportunity. So we think that it just makes
common sense to do that.
Ms. Solis. Thank you.
Mr. Pallone. Thank you.
The ranking member, the gentleman from Georgia.
Mr. Deal. Thank you, Mr. Chairman.
Dr. Payne, let me ask you a couple questions. What is the
position of AARP on means testing for Medicare Part B premiums?
Ms. Payne. We don't think there should be any means testing
on Medicare Part D. Those individuals have already paid their
dues in the years of working, and I don't think the means test
would facilitate the efficiency of the program, and we see no
reason to have it included in that determination.
Mr. Deal. So you would be opposed to the Medicare Part B
premiums that are currently means tested then?
Ms. Payne. We would be opposed to any means testing.
Mr. Deal. So, regardless of whether somebody has a million
dollars in savings, their treatment under Medicare should be
the same?
Ms. Payne. Well, if you look at all of the confusion that
is going on right now--as a matter of fact, I was at the Social
Security Administration myself just a couple of days ago
because they are taking much too much money out for Part B. I
understand that there are about 300,000 people out there who
have been affected by this. So we think that we really ought to
be concentrating on making the program much more efficient than
having means testing and asset tests included in the
determination process.
Mr. Deal. OK. Well, it is one thing to maybe means test or
not means test based on Part D on the upper income people. But
here we, of course, are addressing the ones----
Ms. Payne. I am sorry. I thought you said Part B.
Mr. Deal. No, I said B. That was my question. You answered
my question.
Philosophically, I agree with you. Because Medicare was
never intended to be a welfare program. Start means testing and
you start making it look a welfare program.
Ms. Payne. We are concerned that we provide the kind of
quality services and meet those individuals who need the kind
of drugs we have available in the market today; and the means
testing for those who have already paid taxes, for those who
have already paid into the Medicare Program, I don't see any
utility in that.
Mr. Deal. But here on the lower end, it is a little bit
different issue, even though it is means testing in some of its
nature for those who are asking for more than what might be
perceived as a fair share. In other words, they are asking for
additional assistance. It is not like everybody is paying the
same premium in Part B at the upper end. Here we are talking
about somebody getting more than.
What about the situation where someone may not have, in
terms of liquid dollars on a monthly basis, a lot of money, but
they have assets, whether it be large homes--or that would be
unlikely because if you got a large home you are going to pay a
lot of property taxes. You are going to have some liquid assets
that will pay the keeping of that asset.
But you could have people who would have large retirement
type accounts or IRA accounts. As I understand the IRA
provisions, you don't have to have a mandatory draw-down on
those until age 70. Suppose somebody there between 65 and 70 is
sitting on a huge amount of IRA money that they are not having
liquid access to because they are not drawing down on it, they
are not required to draw any part of it down. Does that seem
quite fair that the taxpayer supplements them additionally for
that?
Ms. Payne. Well, let me answer it this way. We have been
involved for years in financial literacy. In looking at the
defined benefits in this country, in looking at the Social
Security struggles we see today, it seems to me we need to be
encouraging, in any way possible, people to save for their
retirement.
The kind of folks we are talking about in terms of the Low-
Income Subsidy are those individuals that don't have huge
accounts. They may have a very small nest egg, they may have a
house, they may have some other assets that can be liquidated,
but it seems to me we don't want to penalize them by applying
the means tests or assets tests.
Mr. Deal. But when you don't do that, you encourage fraud
and abuse. In other words, if you don't require any proof that
you meet any kind of asset or income test, it seems to me that
human nature takes over and people say, oh, well, that is--the
taxpayers are willing to pay if I apply for this. I think it
just invites fraud and abuse.
Now I am sympathetic with those who have done their best to
preserve their assets. Because there is nothing that makes me
any madder than the one bumper sticker I saw on a big RV moving
down the road that said ``I am spending my children's
inheritance.'' because if you have that attitude about your
assets then you ultimately are going to be the one who is going
to ask the taxpayer to pick up. Because you have lived the good
life. You have spent all of your assets during the time you had
them.
So it is a delicate balance, and I think we all recognize
it is a delicate balance, how to get it all right.
The one piece of testimony we haven't heard, Mr. Chairman,
and I assume before we do anything we will have to get it, and
that is, what is the cost of these proposals? Obviously, some
of them could have rather significant costs that we would have
to wrestle with.
But I appreciate your testimony. I apologize for having to
be in and out, but some of us have appointments we had to keep
in our office. But thank you for being here.
Mr. Pallone. Thank you.
Mr. Green.
Mr. Green. Thank you, Mr. Chairman.
I am going to follow up on the question I just heard. As
for any of the panelists, as I mentioned in my opening
statement, we have a community access collaborative in the
Houston area. It is Gateway to Care, working on outreach and
enrollment efforts. The organization has come to learn
firsthand about the burden of the assets test and the barrier
to enrollment that it creates.
The executive director of Gateway to Care said it perfectly
when he said, ``seniors are proud and honest people. They are
proud of what they manage to accumulate, even if it is very
little by the standards of an investment banker, for example,
particularly in our district.''
We know that two-thirds of the qualified Medicare
beneficiaries are not getting premium and cost-sharing
assistance, and nearly one-fourth of low income seniors are not
getting the benefits.
Dr. Payne, your testimony mentioned that the assets test is
the primary reason why 3 million to 5 million beneficiaries
aren't getting extra help under Part D. What kind of nest egg
are we talking about? Are most of the seniors or people with
disabilities disqualified because they have hundreds of
thousands of dollars in stock annuities or other assets?
I know in my district we don't have folks who have those
kind of resources, and yet some of the assets tests still may
keep them from qualifying. What is the practical implication of
the asset test? Does it really force beneficiaries to make the
tough choice between keeping a small reserve for emergencies
and getting assistance when they need on a day-to-day basis in
the medical bills?
If we can talk about that assets test. I share the concern
made by my friend from Georgia, but I also know from some of
our experiences, particularly in Texas, it is difficult.
Ms. Payne. We think that this--the Prescription Coverage
Act, is really a very modest step toward eliminating the asset
tests. I mean, we know that we possibly have about 3 million
people out there that we aren't serving, and the kind of nest
egg you are talking about are those individuals who would still
be in a relatively low-income status. So we aren't talking
about wealthy folks who have stocks and bonds. We are talking
about folks who are barely over the poverty level or within
that range, and we need to find a way to serve them. I mean, it
is the moral thing to do. It is the right thing to do. It is
the humane thing to do. This is a very modest effort.
I think it is also important to point out that if in fact
we want to reach those 3 million people that, as several of the
panelists have alluded to in their testimony, that we need to
make this process much more uniform. We need to simplify the
process. We need to eliminate these eight pages of daunting
questions that are very invasive, talking about charity,
talking about whether your family gave you food.
I think we can do better than that as Americans. It seems
to me we need to be concentrating on how we can reach those 3
to 5 million people out there and how we can do a better job at
making the application less daunting.
Mr. Green. And I agree. And, in fact, Mr. Chairman, I think
we keep hearing this in our SCHIP hearings, making the
application for the children's health care initiative easier
for parents, just like what it should be for our seniors.
Ms. Payne. Yes. I helped some people in my neighborhood
fill out some of those applications, and it is exacerbated by
the fact that you have at the bottom of the application a
statement about the penalty in terms of imprisonment. So I
think that just exacerbates the whole process. So it seems to
me we can do a better job.
Mr. Green. Ms. Sanchez do you have a comment?
Ms. Sanchez. Yes, in terms of the assets test, there are a
lot of States that have eliminated the assets test, and at
least one, sometimes all, of the MSPs, and they did it because
they found that the administrative cost of actually managing,
looking at the documentation of assets was very high, and,
second, that any kind of significant assets really led to
income that would disqualify the person. So anyone who has a
huge amount of stocks, is going to have income from the stocks,
they are going to be above the income limits.
Mr. Green. If they own a Winnebago, and pay the gas bill
and drive that Winnebago down the road, they are probably not
going to be eligible.
Ms. Sanchez. Exactly.
Mr. Green. Mr. Chairman, I have another question. I will
just throw it out because we apologize for our vote schedule,
but under Medicare Part D, program beneficiaries can sign up
any time of the year without ever paying a premium penalty.
While CMS has waived the Part D penalty for low-income
beneficiaries for the remainder of this year, is there any
reason from your perspective to treat Part D different from
Part B when it comes to premium penalties for low-income
enrollees?
Ms. Sanchez. We are not actually against the premium
penalty for Part B because we do agree with the premise that
people should get insurance and not just wait until they are
sick. But with Part D it is so new, it is so different, and it
is so complicated, that to start the penalty so immediately we
think is unfair. It is really forcing people to make an
uninformed decision quickly just because there is a deadline.
Mr. Green. Thank you, Mr. Chairman. Thank you.
Mr. Pallone. I am going to have a second round, if anyone
wants to participate, second round of questions that is.
I wanted to ask, Dr. Payne, we know that one of the main
reasons people aren't enrolled in the existing programs for
extra help is that they weren't aware that the help was
available. AARP has millions of members, some of whom are
surely enrolled in programs that provide extra help with
medical costs like LIS and MSP. But what has AARP done to
conduct outreach about these programs with its own members in
conjunction with other organizations that help Medicare
beneficiaries with enrollment? Obviously I am asking this as a
prelude to what we might do to help out.
Ms. Payne. Well, Mr. Chairman, as I indicated earlier, we
have had a number of town hall meetings all over the country.
As you know, we are in Puerto Rico. We are in all 50 States
with considerable staff members. We have conducted training of
our staff and training of our volunteers.
We are continuing to produce publications for the Hispanic
community and publications for low-income communities,
targeting those communities that need this the most, especially
in rural areas and economically distressed communities.
We have done the same kind of outreach that we did for
other initiatives we have been involved in. This is one of our
highest priorities. In those town meetings we have devoted most
of our attention to enrolling low-income individuals, and with
more than practically approximately 77 million more baby
boomers coming on, I can assure you we will be doing even more
in the future.
Mr. Pallone. Do you have any recommendation that the States
or the Social Security Administration or CMS could undertake to
reach those who are eligible but not enrolled?
Ms. Payne. Well, again, it seems to me that the Social
Security Administration could do the same thing for the low-
income subsidy that they are doing for other programs, and that
is using some of the income data to do greater outreach, and
for us to give them the authority to do that through the
Prescription Coverage Now Act.
Mr. Pallone. OK, thank you.
I wanted to ask Ms. Clarkson, I would like to better
understand what you are telling us about the challenges that
people in the assisted living facilities face with respect to
their medication copayments.
Right now a person who is in an assisted living facility is
not eligible to get financial assistance with the Medicare Part
D copayments; is that correct?
Ms. Clarkson. That is correct.
Mr. Pallone. Now, is there any solid basis for
discriminating against these low-income beneficiaries in
assisted living? Can you say a little about the beneficiaries
in those facilities? Are they wealthier than people in nursing
homes? Do they have additional means that they can use to pay
for their copayments?
Ms. Clarkson. No, not the clients we are talking about.
They are essentially the same person that would be in a nursing
home being taken care of in a different venue. They are an
elderly person needing assistance, who is also low income.
Mr. Pallone. OK. And I just wanted to ask Ms. Sanchez, I
know we kind of beat this to death, but I have a minute left
here. Do you ever come across somebody who meets the income
test, but you know then has a huge amount of assets? Is that a
phenomenon that exists at all?
Ms. Sanchez. We have never seen it in any of the people we
have tried to help, and if they are over, it is by a couple
hundred or a couple thousand dollars. And they have saved. They
have scrimped and saved their whole lives, and they don't want
to give up that little bit of security.
Mr. Pallone. And that is essentially what we have for the
most part.
All right, thank you all.
Mr. Deal.
Mr. Deal. In that regard that is the problem with setting
any kind of artificial limits is that I am either going to be
$5 under, or you are going to be $10 over. Now, as I understand
it, it does not have an inflation enhancer to it, does it? Or
does it?
Ms. Sanchez. The LIS does, but the MSP doesn't.
Mr. Deal. OK. All right. Maybe that is a better way of
dealing with it, because that is always a moving target and as
long as we have any limit, somebody is going to be just
slightly over it and therefore ineligible, so those are always
hard decisions.
I was just looking at the statistics on the low-income
subsidy as it relates to the Part D premiums and looking at
some CNS figures, and it said that, as of the date of this
report, there were 13.2 million people eligible for low-income
subsidy. And at that point in time, there had been roughly 10
million who had coverage under either Part D or some other
source, leaving the 3.2 million others.
And 3.2 million out of 13 million is a pretty high number
of presumed eligible people who are just not enrolled. It would
seem to me that that is sort of where we ought to focus our
efforts and figure out--and you all have alluded to some of the
impediments that maybe contribute to them not enrolling even
though they would be eligible. That ought to be our priority.
It is sort of similar, Mr. Chairman, to my point on our
SCHIP reauthorization is that since that program has as its
target children 200 percent of poverty or below, we ought to
have a pretty good saturation of that population before we
start expanding it. And I feel the same way about this; we
ought to figure out why the ones that we think are eligible and
are not there, and the reasons you have given, paperwork, maybe
not wanting to disclose assets, all of those other things, a
lot of that has to do with just education and outreach. I am
sympathetic to that.
And hopefully in whatever we do, we can focus on the ones
we have already identified ought to be our primary targets and
try to get more of them covered before we take on more
expansive and more expensive other undertakings, because if we
do, we are going to forget the ones that were the original
intended target populations to begin with.
So thank you all for what you contributed here today.
Mr. Pallone. Thank you. That concludes our questions, but I
just wanted to thank you all. I think that this is a really
important issue that really hasn't received much attention,
and, of course, mainly it effects people that have lower
incomes. And I think a lot of times their concerns are not
heard very often.
So I do appreciate your being here, and we want to take
very seriously what you have said to see what kind of action we
need to take. So thank you again.
I just remind you that you might get additional questions
for the record from Members. They are supposed to submit them
within 10 days, so then we might ask you to respond to those,
you would be notified within 10 days if you get those kinds of
questions.
But thank you again, and without objection, the meeting of
the subcommittee is adjourned.
[Whereupon, at 4:25 p.m., the subcommittee was adjourned.]
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