Welcome to MEDICARE WATCH, a biweekly electronic newsletter of the Medicare Rights Center
Vol. 10, No. 6: March 20, 2007
Contents:
1. FAST FACT
According to a new report from Fidelity Investments, almost 25 percent of American workers retire early because of health problems, leaving them without expected income and savings (“Moving into retirement,” Boston Globe, March 13, 2007).
2. BILL SEEKS TO INCREASE ENROLLMENT IN PART D EXTRA HELP
New legislation introduced in the U.S. House of Representatives last week would make it easier for low-income people with modest savings to enroll in Extra Help, the prescription coverage assistance program for low-income people with Medicare.
Representative Lloyd Doggett, Democrat of Texas, introduced the Prescription Coverage Now Act of 2007 on March 15, saying enactment of the bill would help enroll most of the estimated 3.27 million people who qualify for Extra Help but are not signed up. The subsidy program reduces or eliminates co-payments and premiums and provides coverage in the “doughnut hole” or coverage gap under Part D.
The bill would change the program’s asset test, which advocates argue disqualifies many low-income people who need Extra Help. According to the National Council on Aging, a group that endorsed the measure, 41 percent of Extra Help applicants are denied assistance because they are over the asset cut-off. Under current guidelines, people with Medicare whose financial assets, such as savings, are above $11,710 ($23,410 for a couple) are ineligible for Extra Help.
Doggett’s legislation would raise that limit four fold and increase the asset limit for the full low-income subsidy, under which the poorest people with Medicare pay Part D co-payments of no more than $5.35.
Additionally, the proposed legislation would require the Social Security Administration (SSA) to screen Extra Help applicants for eligibility in state Medicare Savings Programs, which provide assistance with Medicare premiums and cost sharing for low-income people.
The bill would also give the SSA increased access to income data in order to identify and screen people who may qualify for Extra Help and help them enroll, and allows non-English speakers to negotiate the application process in their native language.
The bill also simplifies the Extra Help application process. Applicants would no longer have to calculate the cash value of life insurance policies, which would be excluded from the asset test under the bill. The bill also excludes retirement accounts from the asset test; currently, SSA counts retirement accounts such as IRAs both as income and as assets.
Finally, Extra Help applicants would no longer have to estimate the value in-kind support—assistance from family members and others in paying for such things as utilities, groceries or housing—when calculating their income.
Doggett, who was joined by House Ways and Means Health Subcommittee chairman Pete Stark, Democrat of California, at a May 15 press conference, announced that the legislation already has 156 cosponsors in the House. Senators Gordon Smith, Republican of Oregon, and Jeff Bingaman, Democrat of New Mexico, plan to introduce companion legislation in the Senate.
3. BILL INCLUDES REPEAL OF YEAR-ROUND PFFS PLAN ENROLLMENT
Language in the supplemental war funding bill approved by the House Appropriations Committee last week would repeal a provision that allows year-round enrollment in Medicare private fee-for-service (PFFS) plans.
Under current law, individuals who are enrolled in a stand alone prescription drug plan can enroll in a Medicare Advantage PFFS plan for medical benefits after March 31. The provision, enacted late last year, gives PFFS plans a marketing advantage over Medicare Advantage HMOs, because people with Medicare are barred from enrolling in a stand-alone prescription drug plan and an HMO at the same time.
Advocates have criticized this limited open enrollment period, because people who are already enrolled in a stand-alone prescription drug plan who sign up for a non-PFFS Medicare Advantage plan, such as an HMO, will be automatically dropped from their drug coverage.
A coalition of advocacy groups, including the California Health Advocates and the Medicare Rights Center, sent a letter to the Centers for Medicare & Medicaid Services (CMS) in early February arguing that the agency was misinterpreting the provision, and does not have the right to disenroll people from their drug plans.
In a March 8 response, Anthony J. Culotta, director of CMS’ Medicare Enrollment and Appeals Group, reiterated the agency’s interpretation of the limited open enrollment period. The letter states that CMS will establish a case-by-case special enrollment period to allow affected individuals to return to their stand-alone drug plan if they were unaware that they would lose coverage by signing up for a non-PFFS private Medicare plan.
The appropriations panel approved the draft war spending bill that also includes a variety of other health spending amendments, and the House will likely vote on the bill this week.
4. COMMITTEE APPROVES SENATE BUDGET PLAN
The Senate Budget Committee passed a budget resolution last week that aims to provide for government drug price negotiations, currently prohibited by law, under Part D. The plan also creates a $5 billion reserve fund that could be used to revise the Extra Help asset test and improve outreach to low-income people with Medicare not yet enrolled in the prescription coverage subsidy program. Congress would still need to find savings to pay for the additional enrollment in Extra Help.
Committee members approved the proposal in a 12 to 11 vote. Committee chairman Kent Conrad, Democrat of North Dakota, said last week ahead of the vote that the plan will balance the budget by 2012 without raising taxes.
The panel rejected amendments proposed by Republicans to save money by cutting Medicare payments to health care providers and increasing Part D drug premiums for people with Medicare with incomes over $80,000 per year for an individual and $160,000 for couples.
However, the Republican members stated that they will likely offer the Part D means-testing proposal again when the full Senate begins debate on the resolution. Conrad, who voted against the amendment in committee last week, said he would support the change if it is reintroduced.
The fiscal plan allows for funding of a measure that lifts the prohibition on price negotiations with drug manufacturers, but does not require such legislation to set a drug formulary or a maximum amount the government is allowed to reimburse plans for covered drugs.
The spending bill now goes before the full Senate for a vote.
5. CASE FLASH: MEDICAID COVERAGE OF PART B MEDICINESMs. F is a New Yorker who has both Medicare and Medicaid. She takes Albuterol, a common asthma medication that is used with a nebulizer. It is covered by Medicare Part B (medical insurance) instead of Medicare Part D (prescription drug insurance). When she went to the pharmacy to pick up her prescription, her pharmacist told her that Medicaid cannot help pay for drugs covered by Medicare Part B, and that she would have to pay the 20 percent that Medicare does not cover. Ms. F could not afford it and so had to walk away without the medicine. Knowing that Medicaid had covered it before, Ms. F called her local State Health Insurance Assistance Program (SHIP) for help.
A SHIP counselor confirmed for Ms. F that Medicaid does cover a person’s out-of-pocket costs for Part B drugs as long as they are on Medicaid’s formulary, or list of covered drugs. However, Medicaid will not cover out-of-pocket costs for Part D drugs. (This varies from state to state. Call your local Medicaid office to find out how much you will have to pay for your Part D drugs if you have both Medicare and Medicaid.) The SHIP counselor then called Ms. F’s pharmacist and asked him to call the state’s Medicaid pharmacy benefits line (the number can be found by calling the local Medicaid office). Once the pharmacist realized that Medicaid will help to pay for Medicare Part B drugs, he billed both Medicare and Medicaid, and Ms. F was able to pick up her prescription without having to pay anything out of pocket.
Note: For an explanation of when Part B will cover your prescription drugs, see the Medicare Rights Center’s chart, “Getting Medicare to Cover Your Drugs: Parts A, B, or D? ” (PDF file)
To read more cases by subject, go to "Interesting Cases" on our web site at www.medicarerights.org/interestingcasesframeset.html .
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Medicare Watch is MRC’s fortnightly newsletter, established to strengthen communication with national and community-based organizations and professional agencies about current Medicare policy and consumer issues. Each edition contains news of recent policy developments affecting Medicare and health care generally and a case story from our hotline that illustrates steps professionals can take to get older adults and people with disabilities the health care they need.
The Medicare Rights Center (MRC) is the largest independent source of Medicare information and assistance in the United States. Founded in 1989, MRC helps older adults and people with disabilities get good, affordable health care.