ADVISORY

FROM THE COMMITTEE ON WAYS AND MEANS

SUBCOMMITTEE ON HEALTH

Chairman Stark Announces a Hearing on Medicare Programs for Low-Income Beneficiaries

House Ways and Means Health Subcommittee Chairman Pete Stark (D-CA) announced today that the Subcommittee on Health will hold a hearing on financial assistance programs for low-income Medicare beneficiaries.  The hearing will take place at 10:00 a.m. on Thursday, May 3, 2007, in Room 1100, Longworth House Office Building.

In view of the limited time available to hear witnesses, oral testimony at this hearing will be from the invited witness only.  However, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing.

BACKGROUND:

While Medicare provides universal coverage for senior citizens and people with disabilities, it can require significant out-of-pocket spending. Congress recognized the need to help low-income beneficiaries with Medicare costs through the creation of the Medicare Savings Programs (MSP), which help cover premium and cost-sharing charges.  Individually, these programs are the Qualified Medicare Beneficiary Program (QMB), the Specified Low-income Medicare Beneficiary Program (SLMB) and the Qualified Individual Program (QI).  Congress also acted to help low-income Medicare beneficiaries in the new Part D prescription drug program by creating a Low Income Subsidy (LIS).  Together, these programs help millions of beneficiaries afford needed medical services and medications. However, millions of beneficiaries who are eligible for these programs are not participating.

Medicare Savings Programs

The federal government broadly defines three categories of beneficiaries and programs that comprise the MSP. Under current law, Qualified Medicare Beneficiaries (QMBs) have income at or below 100 percent of the federal poverty line (FPL) ($10,210 – individual/ $13,690 – couple in 2007), but above eligibility for full Medicaid coverage. State Medicaid programs pay Part B premiums and all Medicare cost-sharing for QMBs.  Specified Low-Income Beneficiaries (SLMBs) have income between 100 and 120 percent of the FPL, and state Medicaid programs pay their Part B premiums.  Qualifying Individuals (QIs) have income between 120 and 135 percent of the FPL and the federal government pays their Part B premiums.  The QMB and SLMB programs are entitlements for which state Medicaid programs pay a share of these costs.  The QI program is funded through an annual capped appropriation passed through the Medicare Part B Trust Fund.  Federal law sets the income eligibility requirements, application procedures and asset limitations to qualify for these programs differ substantially across the states.

The MSP are a vital safety net for approximately 1.6 million beneficiaries.  However, estimates suggest that only 40 to 60 percent of eligible beneficiaries are participating. Onerous application requirements, personal disclosures about income and assets, and lack of awareness of the programs are largely responsible for the low enrollment rates. States also have a financial disincentive to find and enroll these low-income Medicare beneficiaries because state expenditures increase when beneficiaries enroll in MSP.

Low-Income Subsidy Program for Prescription Drugs

The LIS program provides extra help for beneficiaries with limited income and resources in paying for Medicare prescription drug plan costs. For 2007, beneficiaries with incomes below 150 percent of the Federal Poverty Level (FPL) -- $14,700 individual/$19,800 couple and with assets under $10,210 (individual) or $20,410 (couple) -- qualify for the LIS. However, benefits in the LIS differ substantially based on where beneficiaries fall on the income and asset spectrums – ranging from complete premium assistance with no deductible and copayments of $1-$5.35, to partial premium assistance with a deductible and copayments that are lower than standard coverage.

Beneficiaries with full Medicaid benefits (“dual eligibles”), those in a Medicare Savings Program and those who receive Supplemental Security Income (SSI) are deemed eligible for the LIS and automatically enrolled in a prescription drug plan. Thus, of the approximately nine million beneficiaries currently enrolled in the LIS program, more than six million were automatically enrolled into a plan. However, CMS estimates that more than 3 million beneficiaries eligible for the LIS are not enrolled in a prescription drug program at all.  Targeted, aggressive outreach programs are necessary to get these beneficiaries enrolled.  Numerous Medicare advocates and analysts have also called for an end to the complicated asset test, which has kept millions more from qualifying for extra help and, they argue, penalizes beneficiaries who have managed to accrue even modest savings or assets.  

Increased enrollment in LIS and MSP would provide financial security to millions of Medicare beneficiaries who can’t afford Medicare’s out-of-pocket costs. Improved outreach, less burdensome application processes, and adjusted income and asset limits could greatly increase enrollment, improving both the financial and physical health of Medicare’s most vulnerable beneficiaries.

“We must determine how best to ensure that Medicare remains affordable for all senior citizens and people with disabilities,” said Chairman Stark in announcing the hearing. “Improving the Low Income Subsidy and Medicare Savings Programs is the most efficient and direct way to guarantee affordable, comprehensive Medicare coverage to low-income beneficiaries.  ”

FOCUS OF THE HEARING:

The hearing will focus on the current state of the Part D Low Income Subsidy the Medicare Savings Programs, and opportunities to increase enrollment and expand eligibility in these programs.

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

Please Note:  Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee website and complete the informational forms.  From the Committee homepage, http://waysandmeans.house.gov, select “110th Congress” from the menu entitled, “Committee Hearings” (http://waysandmeans.house.gov/Hearings.asp?congress=18).  Select the hearing for which you would like to submit, and click on the link entitled, “Click here to provide a submission for the record.”  Once you have followed the online instructions, completing all informational forms and clicking “submit” on the final page, an email will be sent to the address which you supply confirming your interest in providing a submission for the record.  You MUST REPLY to the email and ATTACH your submission as a Word or WordPerfect document, in compliance with the formatting requirements listed below, by close of business Thursday, May 17, 2007.  Finally, please note that due to the change in House mail policy, the U.S. Capitol Police will refuse sealed-package deliveries to all House Office Buildings.  For questions, or if you encounter technical problems, please call (202) 225-1721.

FORMATTING REQUIREMENTS:

The Committee relies on electronic submissions for printing the official hearing record. As always, submissions will be included in the record according to the discretion of the Committee. The Committee will not alter the content of your submission, but we reserve the right to format it according to our guidelines. Any submission provided to the Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response to a request for written comments must conform to the guidelines listed below. Any submission or supplementary item not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.

1.   All submissions and supplementary materials must be provided in Word or WordPerfect format and MUST NOT exceed a total of 10 pages, including attachments.  Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official hearing record.

2.  Copies of whole documents submitted as exhibit material will not be accepted for printing.  Instead, exhibit material should be referenced and quoted or paraphrased.  All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee.

3.  All submissions must include a list of all clients, persons, and/or organizations on whose behalf the witness appears.  A supplemental sheet must accompany each submission listing the name, company, address, and telephone and fax numbers of each witness.

Note:  All Committee advisories and news releases are available on the World Wide Web at http://waysandmeans.house.gov.

The Committee seeks to make its facilities accessible to persons with disabilities. If you are in need of special accommodations, please call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four business days notice is requested). Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above.

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