COMMITTEE ON WAYS AND MEANS CHARLES B.  RANGEL, New York, Chairman
FORTNEY PETE STARK, California SANDER M.  LEVIN, Michigan JIM MCDERMOTT, Washington JOHN LEWIS, Georgia RICHARD E.  NEAL, Massachusetts MICHAEL R.  MCNULTY, New York JOHN S.  TANNER, Tennessee XAVIER BECERRA, California LLOYD DOGGETT, Texas EARL POMEROY, North Dakota STEPHANIE TUBBS JONES, Ohio MIKE THOMPSON, California JOHN B.  LARSON, Connecticut RAHM EMANUEL, Illinois EARL BLUMENAUER, Oregon RON KIND, Wisconsin BILL PASCRELL JR., New Jersey SHELLEY BERKLEY, Nevada JOSEPH CROWLEY, New York CHRIS VAN HOLLEN, Maryland KENDRICK MEEK, Florida ALLYSON Y.  SCHWARTZ, Pennsylvania ARTUR DAVIS, Alabama	JIM MCCRERY, Louisiana WALLY HERGER, California DAVE CAMP, Michigan JIM RAMSTAD, Minnesota SAM JOHNSON, Texas PHIL ENGLISH, Pennsylvania JERRY WELLER, Illinois KENNY HULSHOF, Missouri RON LEWIS, Kentucky KEVIN BRADY, Texas THOMAS M.  REYNOLDS, New York PAUL RYAN, Wisconsin ERIC CANTOR, Virginia JOHN LINDER, Georgia DEVIN NUNES, California PAT TIBERI, Ohio JON PORTER, Nevada
Janice Mays, Chief Counsel and Staff Director Brett Loper, Minority Staff Director SUBCOMMITTEE ON HEALTH FORTNEY PETE STARK, California, Chairman
LLOYD DOGGETT, Texas MIKE THOMPSON, California RAHM EMANUEL, Illinois XAVIER BECERRA, California EARL POMEROY, North Dakota STEPHANIE TUBBS JONES, Ohio RON KIND, Wisconsin	DAVE CAMP, Michigan SAM JOHNSON, Texas JIM RAMSTAD, Minnesota PHIL ENGLISH, Pennsylvania KENNY HULSHOF, Missouri
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records of the Committee on Ways and Means are also, published in electronic form. The printed hearing record remains the official version. Because electronic submissions are used to prepare both printed and electronic versions of the hearing record, the process of converting between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process is further refined.

WITNESS

The Honorable Lloyd Doggett, a Representative in Congress from the State of Texas
The Honorable Jason Altmire, a Representative in Congress from the State of Pennsylvania

S. Lawrence Kocot, Senior Advisor to the Administrator, Centers for Medicare and Medicaid Services
Beatrice Disman, Regional Commissioner, New York Region, Social Security Administration

 J. Ruth Kennedy, Medicaid Deputy Director, Louisiana Department of Health and Hospitals, Baton Rouge, Louisiana
N. Joyce Payne, Ed.D, Member, AARP Board of Directors
Patricia Nemore, Center for Medicare Advocacy
Emelia Santiago Herrera, Moore Consulting Group, Inc., Orlando, Florida

SUBMISSIONS FOR THE RECORD

National Council on Aging, statement
Senior Citizens League, statement
 

Thursday, May 3, 2007

U.S. House of Representatives,
Committee on Ways and Means,
Subcommittee on Health,
Washington, D.C.

The Subcommittee met, pursuant to notice, at 10:04 a.m., in room 1100, Longworth House Office Building, Hon. Fortney Pete Stark (Chairman of the Subcommittee) presiding.

[The advisory announcing the hearing follows:]

*Chairman Stark.  If our guests would like to join us and find a seat, we will begin our hearing on help for low income Medicare beneficiaries.

Medicare is and should always remain an entitlement for seniors and people with disabilities.  I think we have a duty to ensure that the most vulnerable low income Medicare beneficiaries are assured access to this entitlement.

Recognizing this, I introduced the Medicare Catastrophic Coverage Act 20 years ago, at the request of President Reagan, it perhaps was the shortest lived piece of legislation to come out of this Committee, but it did have a decent drug benefit, which we do not have now, and it did have a catastrophic cap, but that is history.

What is left of it, however, is what we now know as the QMB part of our legislation and the last vestiges of that Act.

We in this Committee have a history on these issues to protect and advance the coverage of low income beneficiaries.  Fifty percent of the people over 65 have incomes below $20,000 a year and by the time you add up $1,100 in Part B premiums and $131 Part B deductible that is going up each year, and $300 or so in Part D premiums, and a Part D deductible that may be $265 and a couple of hundred bucks more in out-of-pocket costs, many of these beneficiaries are spending over 10 percent of their already limited income on medical care.

The two major programs that target financial relief for low income beneficiaries are the Medicare savings programs, which comprise QMB and SLMB and QI programs, help low income beneficiaries pay Medicare premiums and cost sharing.

The low income subsidiary programs help beneficiaries pay for prescription drugs under Part D.

These program provide vital financial safety nets for millions of Medicare beneficiaries, but they are unnecessarily complex, and the participation rates are unacceptably low.

Estimates suggest that three to four million people are eligible but not enrolled in the Part D LIS and in MSP, estimates that 40 to 60 percent of the eligible low income beneficiaries--only 40 to 60 percent get the help to which they are entitled.

Bottom line is that millions of people who could benefit from these programs do not.  I would wager it is not because they do not need or want the help, it is just they do not know it is there or how to go about getting it.

Improving the low income subsidy and Medicare programs, savings is the most efficient and effective way to help the beneficiaries who need it most.

Medicare Advantage plans would have us believe they are the ones offering the most help to the most vulnerable.  That is just not true.  Medicare MSP and LIS are far and away the most important and comprehensive sources of supplemental coverage for low income Medicare beneficiaries.

Unlike Advantage plans, these programs protect the choices that matter to beneficiaries.  Choice of doctor, choice of hospital, and full "subsidation'' of cost sharing.  No games.  No profiteering.  No low balls.  Just straight up help.

Done right, it is a strategy that is equitable, efficient and effective.

Today we will hear more about the current state of these programs and the options for improving them.  Simple changes to eligibility and enrollment rules coupled with strong outreach programs could help millions more beneficiaries get the support and medical care they need and deserve.

I hope my colleagues will join us in our efforts to do that this year.  I look forward to hearing from our friends, Lloyd Doggett and Jason Altmire from Pennsylvania.  They will discuss legislation that they have to improve the LIS program.

In the second panel we will hear from CMS and Social Security about how these programs are running, and I hope help us identify opportunities for improvement.

The final panel, the State of Louisiana and several advocate and beneficiary organizations, will discuss the positive and negative aspects of the low income programs and what we can do to improve financial support for vulnerable beneficiaries.

I look forward to the testimony of our witnesses and would like to yield to Mr. Camp for any remarks he would like to make.

Mr. CAMP.  Thank you, Mr. Chairman.  I, too, welcome our panels today.  Today we will examine programs that provide help to low income Medicare beneficiaries and certainly these programs are critical to our most vulnerable seniors who without them would not have access to health care services.

As we consider ways to improve these programs, we must focus on measures that give beneficiaries the ability to choose how they get assistance and also promote the most cost effective strategy for administering these benefits.

For over 30 years Medicare has provided assistance to low income seniors through Medicare savings programs, which have helped to pay premiums, cost sharing and deductibles for eligible low income beneficiaries.

Yet these programs have not reached enough of the eligible beneficiaries.  Some have suggested we should expand these programs and possibly even require beneficiaries to be automatically enrolled.

This approach raises a number of potential concerns.  A mandatory enrollment program could also raise significant privacy concerns.  In order to automatically enroll all eligible seniors, multiple Government agencies would have to share sensitive and confidential information which may require changing existing privacy protections.

These programs are not, however, the only way to assist low income Medicare beneficiaries.

We will hear today from Ms. Emelia Santiago-Herrera, a Medicare beneficiary from Orlando, Florida.  Ms. Herrera is enrolled in a Medicare plan that helped her qualify for the low income subsidy which coupled with her Medicare Advantage plan provides her with free prescription drugs.

Ms. Herrera's plan also pays her co-payments and other costs as well as providing extra benefits that Medicare does not cover, like diabetes disease management and transportation to her doctor appointments.

Without these additional benefits, Ms. Herrera would likely be forced to live in a nursing home.

As we consider ways to assist low income beneficiaries, I hope that we will consider Ms. Herrera's testimony as an example of how beneficiaries can select how they receive their assistance and not force them into an one size fits all model.

With that, Mr. Chairman, I yield back the balance of my time.

*Chairman Stark.  Thank you.  Now I guess we will hear in either order--

Mr. DOGGETT.  I am glad to lead.

*Chairman Stark.  Mr. Doggett, a distinguished member of our Committee.  You have a bill analysis before us.

Mr. DOGGETT.  Mr. Chairman, I have passed that out, I believe, and a bill analysis that we did on each section of that.

[The information follows:]

*Chairman Stark.  Proceed, and enlighten us in any way you are comfortable.

STATEMENT OF THE HONORABLE LLOYD DOGGETT, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF TEXAS

Mr. DOGGETT.  Thank you for convening this important hearing.  Mr. Camp, thank you for your constructive statement.  Fellow Members of the Committee,  I appreciate the opportunity to discuss the needs of low income seniors and individuals with disabilities to receive extra help to get the life saving and pain relieving medication that is so important to them.

The supporters of the Medicare Modernization Act of 2003 highlighted the ability of the extra help provisions of that legislation to afford 13 to 14 million low income Medicare beneficiaries the assistance that they need.

Unfortunately both Part D and extra help have been plagued with problems that are keeping millions of individuals from receiving that assistance that was promised to them.

We have, as all you know, debated in this Committee the pros and cons of that bill.  Some of us think it is great.  Some of us think it is not so great.

I am not here today to re-visit those arguments.  Rather, the sole purpose of this very modest bill is to simply see that the original intent of the supporters of the Part D Medicare provision have their promises fulfilled, and that we extend that extra help to those that need it the most.

In her testimony to this Committee on February 13th, Acting CMS Administrator, Lesley Norwalk, indicated that at least 3.25 million eligible people with Medicare are not receiving extra help.

For all the things that may be said pro or con about the Part D bill, one thing that is not subject to debate is that for some individuals, some of the poorest individuals in this country, the Medicare Part D bill is 100 percent failure.  They are not getting extra help.  They are not getting any help.  It is those folks to which this legislation is targeted.

H.R. 1536, which you have before you, has been endorsed by AARP, which will be testifying later, the National Committee to Preserve Social Security and Medicare, the Center for Medicare Advocacy, which will be testifying, Families USA, Consumers Union, the National Council on Aging, and a number of national health care organizations in addition to that, particularly those concerned with individuals with disabilities and prolonged illnesses.

It is co-sponsored by over 160 of our colleagues.  My colleague, Jason Altmire, shares a strong concern for seniors and the disabled.  He will be addressing his bill, which addresses one of the issues that mine touches in part.

I salute his active and informed role in ensuring that our seniors and individuals with disabilities get the assistance that they need.

In 2003, Medicare itself estimated to us on this Committee that over 58 percent more seniors and individuals with disabilities would sign up for extra help than have actually done so since that time.

Many of the eligible individuals who thought they would receive assistance with this Act are not in fact covered today.  The bill has just really four very simple objectives.

Identify the eligible people.  Notify them.  Simplify the process.  Adjust the asset test.

First, on identification.  As to those three and a quarter million people that are not now covered, the Inspector General of the Health and Human Services Department last Fall said "Access to IRS data would help CMS and the Social Security Administration identify the beneficiaries most eligible for subsidy.''

Indeed, the Social Security Administration realized this when it requested this same data shortly after the Medicare bill was adopted.

The Internal Revenue Service said it could not supply that information without a change in the law.

Mr. Camp has referenced privacy protections and as a member of the Privacy Caucus here in Congress, I am keenly aware of the need to do that.

This particular bill would simply require identification not of all income, but where IRS simply gives a yes or no on potential eligibility based solely on income.  This does not automatically enroll anyone.  It does not automatically force anyone into a Medicare prescription drug plan if they do not want to be in it.

IRS will say if someone has less than $13,783 in income this year, that they are probably eligible.  They may not be, but they are someone to look at, and if they are above $15,315 in income, they will say they are probably not eligible.  Only for the narrow group in between those figures will there be any actual income information supplied to Social Security, and there are other safeguards on confidentiality included.

On notifying, we provide for a much clearer and direct and precise notification than has occurred to date.

On simplifying, it is a fairly complex application that is required to be filed right now.  Some of that relates to matters that are included in income.

For example, if a child assists their parents with their groceries or something else, cleaning the house, this may be calculated as income.  I think it is neither good family values nor good Government to demand that be calculated.

My bill removes those items from the income calculation and simplifies that application.

Fourth, the asset test adjustment.  No one wants to provide the wealthy with free prescription drugs or discounted prescription drugs under this extra help program.  The current limitation of lifetime savings is less than $8,000 for an individual, all the savings that they have been able to accumulate all their life and about $12,000 for a couple, in order to get the full subsidy.

I make modest adjustments in those levels, raising them to $12,000 and $18,000 appropriately, and modest adjustments for the partial subsidy.

The people who meet this income requirement but are disqualified by the restrictive asset test are by the way, according to the studies, mostly women, widows, living alone with no college degree.  For the full subsidy, an individual would still be restricted to no more than $12,000 for an individual, $18,000 for a couple in savings.  That is hardly a luxurious retirement.

There are other changes that are made in the bill.  I see I am over my time, and I would be glad to respond to questions.

I hope we can build bipartisan support for modest changes that we can afford and reach more of these people and fulfill the promise of the Medicare prescription drug bill.

Thank you, Mr. Chairman.

[The prepared statement of the Hon. Lloyd Doggett follows:]

*Chairman Stark.  Thank you very much.

Jason, would you like to enlighten us on your bill?

STATEMENT OF THE HONORABLE JASON ALTMIRE, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF PENNSYLVANIA

*Mr. Altmire.  Thank you, Mr. Chairman and Ranking Member Camp.  I want to include my colleague Phil English from Pennsylvania.

*Chairman Stark.  Jason.  I am sorry, not Justin.

*Mr. Altmire.  That is okay.

I very much appreciate the opportunity to testify today about my bill, H.R. 1310, the Relief and Elimination of the Medicare Enrollment Deadline Penalty Act, REMEDY Act.

As part of the Medicare Modernization Act of 2003, Congress included provisions to apply a late enrollment penalty to the monthly premiums of Medicare beneficiaries who failed to select a prescription drug plan by the end of the initial enrollment period, which concluded on May 15, 2006.

A late enrollment penalty, one percent of the base beneficiary premium, is added to each uncovered month that a beneficiary was eligible for coverage but did not enroll.

For Medicare beneficiaries who were on the rolls prior to January 1, 2006, the clock began after the initial enrollment period ended.

Their next opportunity to enroll was not until the annual enrollment period, which ran from November 15, 2006 through December 31.  Individuals who deferred enrollment during the initial sign up period and decided to wait until the open enrollment period would therefore have seven uncovered months and are penalized an additional seven percent, starting with their 2007 monthly premium.

This penalty applies for as long as the beneficiary is enrolled in Part D.

The MMA does include exceptions.  Individuals who are able to maintain creditable coverage through a current or former employer, or union, for example, are exempt.  Other examples include TRICARE, the Federal Employees Health Benefits Plans, and coverage through the VA.

In Pennsylvania, seniors are able to maintain creditable coverage through the PACE, PACENET and PACE Plus Medicare programs.

Certain categories of low income populations, including dual eligibles, enrollees in Medicare savings programs, and supplemental security income recipients, are automatically enrolled in the plans, and therefore, face no penalties.

The MMA also extends low income subsidies to individuals with incomes below 150 percent of poverty and with assets below $10,000 for an individual and $20,000 for a couple, but these beneficiaries may be subject to the late enrollment penalty.

Outside of those exceptions, Medicare beneficiaries are subject to a late enrollment penalty for all uncovered months.  It is permanently added to their monthly premiums and the amount is expected to increase each year as it is recalculated annually to the greater of the amount CMS determines is actuarially sound or one percent of the base beneficiary premium.

In the months leading up to the initiation of the Medicare Part D program, beneficiaries were inundated with information about coverage options which often caused confusion and frustration among seniors.

In my home in the Pittsburgh area, seniors had to choose from over 60 different plans that were submitted to them.  It is simply too much information to consume within a short period of time.

On top of the new plan options, the initiation of the program led to a number of access issues to the beneficiaries.  Thousands of seniors were forced to wait days and in some cases weeks to obtain vital prescriptions.

Considering the hurried initiation of the program, I introduced H.R. 1310 to provide Medicare beneficiaries with sufficient time in which to evaluate the myriad of coverage options available to them.  Choosing a health care plan is one of the most important decisions one can make.  It is only fair to provide beneficiaries with the time necessary to properly choose the appropriate plan.

My bill provides the needed relief to millions of Medicare beneficiaries, particularly those with limited incomes.  My bill delays implementation of the late enrollment penalty for the first two years, 2006 and 2007, of the program.  These are the people that were directly impacted by the fact that it was a hastily prepared program and did not get off to a quick start.

The bill directs HHS to devise a system in which to distribute rebates to any Medicare beneficiaries who paid the late enrollment penalty and it permanently eliminates the late enrollment penalty for low income subsidy beneficiaries who might find it otherwise difficult to pay for the increase in their monthly premium.

I note that CMS in January did delay the late enrollment penalty for these people for one year, and my bill simply codifies this waiver and makes it permanent.

Approximately 4.5 million eligible Medicare beneficiaries did not have prescription drug coverage last year at the deadline and thus, may be subject to the late enrollment penalty.

In my district, the Pennsylvania Department of Aging estimates that 14,000 individuals are eligible for this coverage but are not enrolled.

I urge the Committee to delay the late enrollment penalty for two years and provide seniors with the time necessary to evaluate their health care options without being penalized.  It is a straightforward approach that maintains the current design of the program and protects against adverse selection while providing relief for millions of seniors.

Thank you again, Mr. Chairman, and the rest of the Committee for the opportunity to testify.

[The prepared statement of the Hon. Jason Altmire follows:]

*Chairman Stark.  Thank you.  Thank you both.  The Rector of Justin was the founder of the Groton School.  I don't know where that comes from in my memory bank, but I apologize again.  You first heard about these problems in your town meetings?

*Mr. Altmire.  That is right.  As I said, I have 14,000 Medicare beneficiaries who are subject to the penalty and a number of them have approached me.

*Chairman Stark.  They all come to your town meetings?

*Mr. Altmire.  They do not all come, but a number of them have, and the chief complaint was they were inundated with so much information in a short period of time.

*Chairman Stark.  Your bill now makes this permanent; is that correct?

*Mr. Altmire.  Correct.  It's a two year fix.

*Chairman Stark.  You are not suggesting that we do away with the other late enrollment penalties, charges for say late enrollment into Medicare and those sorts of things which keep us from having adverse selection?

*Mr. Altmire.  I am not; right.

*Chairman Stark.  Thank you very much.

Lloyd, often we can solve the problems that you suggest through administrative changes when there is cooperation.  Did you discuss this with CMS or the administration on how we might correct this in an administrative fashion?

Mr. DOGGETT.  I attempted to.  I must say I have not met with great success in that regard and after some months, they determined that there was a need for an actual change in the law, but just to give you some background, actually, one year ago exactly today, the head of CMS, at that time, Dr. Mark McClellan, was sitting in this chair testifying to the Committee.

I was asking him about these problems.  Because I did not feel I was getting a very complete response about what was being done for the low income individuals, on May 26th, after his testimony, I was joined by 145 colleagues in sending a letter to him, at that time, thinking this could all be done administratively.

It took over four months for us to get a response back that was essentially "don't worry, be happy,'' we are doing a great job, not indicating there was a statutory barrier to targeting these low income individuals.

We also wrote him again in June following further testimony he had given to the Subcommittee, seeking information.  That also was a communication that was very delayed in getting back and very incomplete.

Only when the Inspector General of the Health and Human Services Department came out with his report recommending that we do exactly what we had been asking CMS to explore, did I get any firm indication that a statutory change would be necessary.

The fact that Ms. Norwalk, the current acting head of CMS, told this Subcommittee in February that despite all of their efforts, all their outreach, they still had about the same number of people that were not signed up that they had a year ago indicates that more needs to be done.

A fact, which had not been made known to me previously, the fact that the Social Security Administration essentially asked for the same information this bill would authorize to IRS, because they thought that was the best way to target the information.

*Chairman Stark.  Excuse me.  The Social Security Administration asked for the same information?

Mr. DOGGETT.  According to the Inspector General's report, and without going through all of--

*Chairman Stark.  Did they get it?

Mr. DOGGETT.  They were told that a change in the law would be necessary, that under existing law, they could not provide that.

I have tried to work to craft, sharing the same concern Mr. Camp voiced about privacy, to craft the most narrow change possible.  It is very similar to an approach that Senator Gordon Smith and Senator Jeff Bingaman have offered, after we filed this bill over in the Senate, trying to work with them to see how can we target rather than do a scatter shot.

I have sought to work with the folks at CMS right through last night when unfortunately they again declined to really give a careful review of this legislation that has been pending, to tell us if there were any aspects that would create problems for them in administratively, or that would not achieve the goal.

There is no doubt they are doing significant outreach, but that significant outreach has not brought in many of the people that need to be reached.

I am not suggesting we replace what they are doing, but target it and do it with a simple, direct application that has a better chance of achieving success.

*Chairman Stark.  Thank God you did not turn the problem over to the military recruiters.  You might have even worse results.

Mr. DOGGETT.  I would just bring to your attention, today's USA Today has several articles outlining this problem with an article entitled "Many Low Income Seniors Don't Get Drug Benefit, Advocates/Feds Failing to Reach Out to the Neediest.''  It really is just a summary of the same problems that I have been testifying about, that this bill is designed to correct.

*Chairman Stark.  Maybe we can make some steps in that direction.  Mr. Camp?

Mr. CAMP.  Thank you, Mr. Chairman.  Mr. Doggett, thank you for your testimony today.  Obviously, we would like to reach out to those eligible for the prescription Part D benefit as much as possible.

Tell me, with the changes that you are proposing, have you had a chance to have this scored?

Mr. DOGGETT.  Other than protecting privacy, that is my biggest concern, because I'm committed to pay as you go, and I requested a score or the Subcommittee requested a score on this about two months ago.  We continue to encourage the Congressional Budget Office to move forward on it, but we do not have it today.

I have asked for a section by section analysis so that if we cannot do all of this, perhaps we can do some of it within the budget constraints that we face.  I do not have a score today.

Mr. CAMP.  As you know, the cost of the entire prescription Part D program received a lot of attention.  Unfortunately, it is coming in under what was suggested, but still the costs of this are going to be absolutely critical, and will be a big part of the policy changes that we are going to be able to make.

Mr. DOGGETT.  Absolutely.  That concern is a very legitimate concern.  Many of the advocacy groups that we work with that are concerned about protecting more people wanted to move to more of an automatic enrollment and eliminate the asset test entirely.

There are some good arguments for that.  I did not do that, and in fact, I reduced the asset test so that it makes some adjustment but a fairly modest adjustment, because of cost concerns.

Mr. CAMP.  Yes.  Once you get that and then obviously how then we meet those PAYGO rules will be something we will have to grapple with within the Committee.

Thank you very much for your testimony.

Mr. DOGGETT.  Thank you.

Mr. CAMP.  Thank you.  Thank you, Mr. Chairman.  I  yield back.

*Chairman Stark.  Mr. Pomeroy, would you like to inquire?

Mr. POMEROY.  Just one feature, and I intend to pursue it more extensively with the Social Security Administration representative in the next panel.

It is my understanding that SSA was given some initial funding, which has now expired, relative to handling the inquiries and making the eligibility determinations for the extra help.

I have been informed that without additional funding continuing, they are literally diverting resources away from the normal work of a Social Security office on a zero sum gain.  We want them to tend obviously to the enrolling of those that are appropriate for extra help and making those determinations.  We want the Social Security activities to continue.

It is a little mind boggling to think that they would just think after an initial start up period there would not be any staffing consequences for the work that SSA has carried on this extra help determination.

Lloyd, are you aware of anything regarding that?

Mr. DOGGETT.  I believe there will be some modest adjustments necessary.  As you know, yesterday in the Subcommittee on Social Security, we were concerned about the same issue as it related to handling disability claims.  They are going to be best positioned to answer that.

We basically seek to have the Social Security Administration go back and re-ask the same inquiry to the Internal Revenue Service they did originally, perhaps with some variation given the privacy protections we have here, get that data, and then use it for a targeted notice out to these folks.

There would be some costs attendant to that.  I know costs was a concern that you had in deciding to join as a co-sponsor of this legislation, which I appreciate, the same concern Mr. Camp raised.

Hopefully, when we hear from Social Security and we get back the score, we can focus any new dollars where they will do the most good to get the most people.

Mr. POMEROY.  Great.  Thank you.  Thank you, Mr. Chairman.  I yield back.

*Chairman Stark.  Mr. Hulshof?

Mr. HULSHOF.  Thank you, Mr. Chairman.  I accept to my colleague, Mr. Doggett, your invitation to move forward, but I think I need to take a quick glance in the rear view mirror, having been in many hearings leading up to Part D.

We heard the complaints that there were going to be zero choices for seniors, and then of course, we saw the flood of plans because the private sector saw this was something that could happen, and then the complaint was there were too many choices.

It was proposed by some that we should actually have to legislate the monthly premium because we were not going to see $35 premiums.  In fact, we have not.  In fact, in Missouri, you can find a monthly premium as low as $15, and every senior in Missouri has had the opportunity to have the doughnut hole covered.

There have been wild estimates of costs, as Mr. Camp pointed out.  There was an attempt to embarrass the White House in this Committee, and now as some of us predicted, cost estimates were over blown.

We supported the idea, for instance, Mr. Doggett, of means testing Part D for wealthy seniors.  That was in the House version of the bill.  I remember when we had that discussion on the Floor, if memory serves, that vote of means testing for wealthy seniors was rejected unanimously by those on your side.

I am not here to play "gotcha.''  When we had the debate on the Floor about drug negotiation, I asked the Majority Leader, why is it so difficult to at least provide some credit for those of us that got at least part of it right.

I think this place would work a lot better when we did not care who got the credit when things go well.

Mr. Altmire, you said "hastily prepared program.''  "Hasty initiation.''  Well, I respectfully disagree in that we had the interim drug card.  Yes, there were glitches during the massive roll out, but the fact that eight out of ten senior citizens think this has been a good program for them.

Yes, we should improve where we should improve.

I would ask you, Mr. Altmire, you waived the penalty for Medicare beneficiaries who do not enroll in Part D, there are about 800,000 beneficiaries who pay a late enrollment penalty in Part B.  Why do you not address those folks?

*Mr. Altmire.  In answering both of your comments, and I appreciate the question, in saying it was "hastily prepared,'' maybe I did not articulate.  It was not a pejorative statement.

I was merely getting to the fact that in my home state of Pennsylvania, beneficiaries had 60 different plans to choose from in a relatively short period of time, something they had not been asked to do before, and then the fact that the penalty kicks in for seven months before they have the opportunity to make their next plan.

It was not an editorial comment on the program.  It was just merely getting to the fact that as you pointed out, there were more choices than people thought they were going to have, and as a result, some of them were unable to make their selection in time and then were subject to the penalty, which leads me into the second part, unless you want to follow up on that.

Mr. HULSHOF.  I would follow up in the sense that your written statement said "It was clear to all outside observers that the Medicare Part D program was not ready for prime time.''

You were on the health care side before coming here, were you not?  A lobbyist or in some fashion?

*Mr. Altmire.  I was.  I took that part out of my--you are right.  That was in my written statement.  I took it out for my comments.  I thought that was over the top, admittedly.

Mr. HULSHOF.  Let me ask you, either from your experience in the health care industry before coming here or now that you have joined this body, is there a reason for a late enrollment penalty?

*Mr. Altmire.  Yes.  There is absolutely a reason with regard to adverse selection, and that is the reason, and Mr. Camp mentioned costs, as you did as well.  That is the reason this is only a two year fix.  This not an open-ended situation.

I just wanted to resolve or remedy the problem for people who were caught in this trap of having too many plans to choose from in a short period of time and are now subject to the penalty.

I understand how adverse selection works and the cost issues associated.  I only made this a two year bill for that reason.

Mr. HULSHOF.  I would say and would you agree that there are some seniors, I do not know what the percentage might be, we are all concerned about those that are not covered, but there are some seniors, healthy seniors, or maybe even some that just choose not to participate in some Government run program?  Would you agree with that?

*Mr.  Altmire.  Absolutely.  They still would have the right to do that.

Mr. HULSHOF.  Again, I appreciate each of you, as we try to--no one on this side or either side is saying there is not room for improvement.  Certainly, providing access to those who need it, certainly on the low income side, again, the original version said for those that are the affluent who do not need help with drugs, we had that in the original House version, but it did not make the final version, but I appreciate the Chairman indulging me with my time.

*Chairman Stark.  If the gentleman would yield, I would yield him time to yield back, I do want to suggest that your review of how we got where we are was accurate.

I think that now, I do not suspect any of us want to repeal this law and start over.  It is incumbent on us in the nature of oversight to see what we can do.  We have the law.  We ought to see that it gets administered fairly and probably directing some help to those who are less capable of understanding it.

I think we have all had in every town meeting come and say I do not understand it, and we have had people call our district offices and try to get it explained.

To that extent, I hope we could work together either to simplify or to make the process more user friendly.  I think that is the intention of this hearing.

Mr. HULSHOF.  Would you yield?

*Chairman Stark.  I would be glad to; yes.

Mr. HULSHOF.  I absolutely acknowledge and agree with the statement you just made, Mr. Chairman.  What is extraordinary is that given the difficulty and almost the unanimous opposition when this plan first came out, the fact that if you believe the polls, and some people may not--

*Chairman Stark.  It was not unanimous.  It passed by one vote.

Mr. HULSHOF.  I am saying the unanimous--just a handful, Mr. Chairman, on your side, that supported the bill.  Again, I am not here to point fingers.  It is just as difficult as it was to get Part D passed, and certainly the implementation, I think it is extraordinary in the short amount of time to have the vast majority of senior citizens who now are covered with drugs that they need and the satisfaction rate given the difficulty to get it passed and certainly the almost unanimous opposition on the gentleman's side of the aisle.

Yes, let's fix what needs to be fixed.

*Chairman Stark.  If it will help the gentleman in deliberating on this issue, I will admit that I am happy we lost, and I think--

Mr. HULSHOF.  I am going to write that down.

*Chairman Stark.  We think we now have the bill.  It is not the bill I would have written, and it may not have been the bill the gentleman would have written.

All I can say is let's live with it and improve it in whatever way we can afford to improve it to help the people who we hope are served by it.

Mr. DOGGETT.  Mr. Chairman, may I respond if there is time?  I am not so happy that we lost, but we did, and you prevailed.  The thrust again is only on ensuring that since you prevailed, we fulfill the promise that was made at that time.

I am concerned that one of the reasons, not perhaps the major reason, but one of the reasons those cost figures have come in much lower than were predicted is that a significant number of the 13 to 14 million people that Billy Tauzin talked about and that Medicare estimated would qualify for extra help, that they just have not gotten it.

If there is a way to achieve that within the cost constraints and within the privacy constraints, that is all I am trying to do.

*Chairman Stark.  I thank the gentleman.  Mr. Kind, would you like to inquire?

Mr. KIND.  Thank you, Mr. Chairman.  Just briefly.  I want to thank my two colleagues for the good work they are putting into both of these measures.

Mr. Doggett, first of all, we are taking a look at the bill.  We are quite frankly just waiting for some cost figures to come back.  I think for some time now, we have to take a look at the asset limit for LIS individuals, but if you could refresh my recollection, are you proposing indexing those assets for future inflationary, or are you just bumping the asset limits up to increase eligibility?

Mr. DOGGETT.  I think we are just proposing to raise them and not to index them.  They do need to be indexed.  That might be an appropriate adjustment to the bill.

Mr. KIND.  Mr. Altmire--

Mr. DOGGETT.  If I might clarify that, apparently they are already indexed under current law.  I know the income limit is indexed or has an inflation factor in it under current law.  Our bill does not change that.  There is something there already.

Mr. KIND.  You are also proposing in your legislation that you would waive the penalties for low income subsidy individuals on a permanent basis?

Mr. DOGGETT.  We do, and that is similar--it covers part of the population that Mr. Altmire does in his bill.

Mr. KIND.  Mr. Altmire, you are just proposing a two year waiver?

*Mr. Altmire.  Correct.

Mr. KIND.  Not only for low income subsidy but for?

*Mr. Altmire.  Anyone that is subject to the penalty.

Mr. KIND.  I agree.  I had a lot of forms as far as sign up sessions when Part D eligibility enrollment period first opened up, tremendous amount of confusion, the complexity of it.  A lot of people were not quite sure where to go for accurate information.  It was difficult.  If they did not enroll during that limited sign up period, they were shut off for about seven months and those penalties were accruing during that time.

It is my understanding that CMS has waived the penalty in 2007 for low income subsidy individuals, but that is it so far.  Is that correct?

*Mr. Altmire.  Yes.  In my bill, I codify that into the legislation.

Mr. KIND.  Very good.  Thank you again for your work.  Thank you, Mr. Chairman.

*Chairman Stark.  Mr. Emanuel, would you like to inquire?

Mr. EMANUEL.  Thank you, Mr. Chairman, I would.  I apologize for coming in late.  I thank my colleague, Mr. Doggett--

*Chairman Stark.  Did you bring a note from your mother?

Mr. EMANUEL.  My mother has a couple of other things she would like to bring besides a note, but I will make sure she knows you said that.  She usually carried a 2 x 4 for her kids.  My mother would actually like this whole forum just for her.  That is the dedication of a Jewish mother.

Mr. Doggett, you cited the USA Today story and the fact is that outside of the automatic enrollment, those low income seniors have not actually enrolled in the prescription drug Part D benefit.  I was going to take note of that, but if it has been noted already in the interest of time, I will not do that.

If you go back to the debate we had on the Floor, all those who were champions of the bill said how well it would do for low income seniors.  In fact, the data shows it has not reached those, and there are about 3.2 million low income seniors who are not enrolled who would clearly benefit.

I think our obligation is how do we figure out how to get to those folks.  There are a lot of things to do.  I want to compliment my colleague from Pittsburgh for his idea of waiving the fee.

You have it obviously for everybody, but at a bare minimum, and I would hope, Mr. Chairman, we take note of his idea, at least codifying what CMS did for an one year proposal.  If it was good for one year, it may be good for the second year when you have 3.2 million folks who are not enrolled that could be enrolled.

We have to be doing everything we can.  I would hope that obviously we look at this and take some recommendations of our two colleagues here.  I am most impressed with the idea of codifying and expanding this idea of waiving the fee for seniors so we do not put up road blocks.

If it was intended to get people in, they got in.  Those who are left out, it is clearly not working for its intention.  The intention was to have a fee to move people.  We are past that stage.  Now we have to figure out what we have to do to get them in because the late fee is a penalty to incentivize you to move, and that is past its prime.  Its best days are behind it.

I would point to my colleague from Pittsburgh who has come up with a piece of legislation where I cannot stress enough that we take consideration of and look into.

To the debate between you and my colleague from Missouri, I will say that I wish this was not the plan.  I do not think it was right.  I think when we had the debate about $395 billion and it turned out to be closer to $800 billion, we should have know that information.

We would have had a different judgment about whether we should have done this bill.  That said, it is here.  One of the things that concerns me and I hope as we look at it and debate this is the fact is when we looked in the 1980s and 1990s at the HMO and the privacy industry to save costs, the reason people looked at those plans was because they were supposed to be cheaper than Medicare fee for service.

By the time we got to 2000, the advantage of the private plans from being more efficient than Medicare, the only way we got to those plans if we had to give them a 12 percent bonus on top of the fee for service.

Their sales pitch in the 1980s and 1990s was they were cheaper, better, more efficient.  By 2000, it became we had to pay them extra to get them to take on the Medicare.

I am not suggesting that we eliminate all of the HMO benefits.  They may work better in rural areas where you do not have a density, et cetera.  All that we are doing here is trying to find after this period of time a better way to deliver a benefit in a more cost effective way, because it was never going to be $394 billion.  It is now $800 billion.

We have got to be better with taxpayer money so we can get a better benefit.

Mr. HULSHOF.  Would you yield for clarification, Mr. Emanuel?

Mr. EMANUEL.  Only if my mother is here.  Yes, I will.

Mr. HULSHOF.  The Congressional Budget Office certified that the drug benefit was $395 billion and the Congressional Budget Office has not budged off that number.

The reference to the larger number was the Office of Management and Budget under the administration that made different assumptions than the Congressional Budget Office, and it is the Office of Management and Budget that has indicated that because of the prevalence of wellness and preventive drugs, that the cost has been coming down.

The record should indicate that CBO, the official score keeper for this institution, has held firm to the $400 billion or less.  It is the administration's budget numbers that were the number.

Mr. CAMP.  Would the gentleman yield for one minute?

Mr. EMANUEL.  I think I need my mother.

Mr. CAMP.  It went down 30 percent from the initial projection.  The fact is the costs are down 30 percent.  That is unprecedented in the history of any Government program.

Mr. EMANUEL.  As you both know, because you are both very good and very studious and committed, one of the reasons the costs are down is because enrollment is not up.  Fact.

As Ronald Reagan used to say "Facts are a stubborn thing.''

The truth is and we all know it, yes, they are down, no doubt.  B, one of the reasons they are down is enrollment is not up.  C, one of the things that our two colleagues, from Texas and Pittsburgh, are trying to do is trying to figure out how to get enrollment up among the audience and parts of the population that are in most need of it.  D, Richard Foster nearly lost his job for having--it was a different set of numbers, granted, but I believe had we known that, I do not think we would have gotten this bill.

That is all I have to say.  Thank you, Mr. Chairman.

*Chairman Stark.  Would any of the members like to further inquire?

[No response.]

*Chairman Stark.  If not, I want to thank both the witnesses.  I know Mr. Doggett will stay with us.  Jason, if you would like to join us for the rest of the session up here and sit in and listen, you would be welcome.

I am going to call our second panel with the caveat that we are expecting two votes some time between 11:00 and 11:15.  If Mr. Lawrence Kocot, Senior Advisor to the Administrator for CMS, and Ms. Beatrice Disman, Regional Commissioner of the New York Region of the Social Security Administration, would like to come forward, we will empanel you.

Ms. Disman, if you would like to proceed to enlighten us.  I think we will have time to get through the summary of your presentation, and then if we can prevail on you to stick around for a few minutes, the members will return after the vote and may wish to inquire.

Please go ahead and enlighten us in any manner you are comfortable with.

STATEMENT OF BEATRICE DISMAN, REGIONAL COMMISSIONER, NEW YORK REGION, SOCIAL SECURITY ADMINISTRATION

*Ms. Disman.  Thank you, Mr. Chairman, and Members of the Committee.  On behalf of Commissioner Astrue, I thank you for inviting me to provide an update on Social Security's ongoing efforts to sign up eligible Medicare beneficiaries for the low-income subsidy or "extra help" as it is known in the community.

As you said, I am Bea Disman.  I am the Regional Commissioner of the New York Region, and I have had the good fortune for the last three years to chair Social Security's Medicare Planning and Implementation Taskforce.

In doing this, I have had the opportunity of seeing the truly tireless and dedicated efforts of so many Social Security employees as they have attempted to reach out to those individuals who could benefit from the "extra help".

I am pleased to provide you with an update of our story.  During the last year, Social Security has continued to use every means at our disposal to reach those who could benefit from "extra help".

We have been in the communities and senior citizens' centers, pharmacies, public housing, churches, any place we thought senior citizens or the disabled were likely to be found.

We have also continued to work with State pharmaceutical programs, State health insurance programs, area agencies on aging, local housing authorities, community health centers, prescription drug providers, and others to identify those with limited income and resources.

Throughout these efforts, Social Security's goal has been to reach every potentially eligible Medicare beneficiary multiple times in a variety of ways.  Whether there were 300 or three million people, Social Security's job is the same, find them.  Find them where they live.  Find them in the communities where they work, find them in any way we can.

Our message is simple.  If you could possibly benefit from this program, Social Security will help you apply.

For more detail on the many avenues Social Security has used to inform low-income beneficiaries about "extra help", for example, our multiple targeted mailings, telephone calls or targeted events, I refer you to my written testimony.

Today, however, I would like to focus on a new initiative.  On behalf of Commissioner Astrue, I am pleased to announce a new strategy in our continuing efforts to inform the public about "extra help".

This outreach initiative,  "Show Someone You Love How Much You Care,'' is designed to inform relatives and care givers, the sons, daughters, grandchildren and family friends who count a Medicare beneficiary among the important people in their lives.

By specifically focusing on these caregivers, SSA hopes to reach even more individuals who could be assisted through the "extra help" program.

Last week, Commissioner Astrue met with the advocacy organizations, some of whom will be testifying later, and encouraged them to help us in this new strategy.  We have actually worked with all these organizations over the last three years.

We plan to launch this new initiative around Mother's Day as we celebrate the most important special people in our lives.  This year we are asking that people show someone they love how much they care by learning more about that "extra help" that is available with Medicare prescription drug costs.

We are asking them to take a further step to help their loved ones apply.  In the week preceding Mother's Day, Social Security employees around the country will be visiting their flower shops, restaurants and place of worship to make information about the "extra help" available.  That is where mothers spend Mother's Day.

I personally will be visiting one of the largest African American churches in Jamaica, New York on Mother's Day, and I filmed TV spots publicizing extra help for NBC's local consumer reporter yesterday.

I have seen the activities from around the nation, in which my colleagues and their staff are actively engaged.  Social Security also plans to publish related articles in the local media.

Outreach efforts have also included distribution of special pamphlets explaining "extra help", and I provided those pamphlets to each one of you so you could see them.  The campaign will also continue throughout this year with a second series targeted at Father's Day.

We also did officially send you pamphlets within the last day or two with a note from Commissioner Astrue.  We are excited about this new initiative and its timing during Older Americans Month and its prospects for assisting low-income Medicare beneficiaries.

I would now like to turn to another topic of great importance to SSA and this Committee, outreach to individuals potentially eligible for Medicare savings programs.

In May 2007 as in prior years, Social Security will be sending an annual notice to approximately six million beneficiaries who based on our data and systems matching of data with Veterans Affairs, Office of Personnel Management and the Railroad Board, are potentially eligible for Medical Savings Programs (MSP).

As in prior years, the MSP letters are tailored to address the programs which they are potentially entitled to based on our records.  These letters also address "extra help" where appropriate.

In addition to the notices we send information about MSP assistance to the various States.  Information such as income along with names, and addresses of those individuals are shared electronically right after the mailing, thus providing vital information for the States to use in their own outreach programs.

SSA also assists the States in MSP through the buy-in process.  In 32 States and the District of Columbia, SSA has an agreement where a determination for SSI imparts Medicaid eligibility, therefore, MSP.  Even in those States where we do not have an auto enrollment agreement with the State, we generate an alert that the State can use in assessing MSP.

Finally, I would like to let you know that SSA decision letters about "extra help" have information about MSP. Information on "extra help" decisions themselves are transmitted to CMS, thus, CMS knows about whether "extra help" is approved or denied.  They also receive certain information on income and resources.

In terms of "extra help", SSA has made a special effort with CMS to reach those beneficiaries who lost their deemed status effective January 2007.  Of the approximately 630,000 individuals affected, 247,000 have applied for "extra help" and 168,000 are eligible.  This is in addition to those who have been re-deemed.

Social Security is currently calling 188,000 individuals who have not yet filed.

For this fiscal year, almost 850,000 beneficiaries have filed for the "extra help", about 200,000 of these are unnecessary--I have about another 15 seconds, if I can continue--because they automatically were eligible or because they filed more than one application.

For this fiscal year, we have found 350,000 individuals that are eligible for the "extra help".  We continue to receive about 30,000 applications a week or over 100,000 a month.

In conclusion, I want to express to this Committee my personal thanks and the thanks of Commissioner Astrue for your continuing support for the Agency.  I can assure you that the dedicated employees of Social Security will continue to do our very best in administering the "extra help" assistance and in partnering with the state and CMS in the promotion of Medicare Savings Plans.

We realize our job is not complete.  We continue to look for ways in which we can reach out to those in need.

We look forward to our continued dialogue with organizations, advocacy groups and of course, this Committee.

Thank you.  I will be glad to answer any questions you have.

[The prepared statement of Beatrice Disman follows:]

*Chairman Stark.  Thank you very much.  Mr. Kocot, if you would proceed.  At the conclusion of your summary, we will recess for a few minutes to go vote.  We should be back in 15 minutes.  Please proceed.

STATEMENT OF S. LAWRENCE KOCOT, SENIOR ADVISOR TO THE ADMINISTRATOR, CENTERS FOR MEDICARE AND MEDICAID SERVICES

*Mr. Kocot.  Thank you.  Chairman Stark, Congressman Camp and distinguished members of the Subcommittee, thank you for inviting me to discuss the low income subsidy available under Medicare Part D and the Medicare savings programs, the MSPs, which are joint Federal and state partnerships to assist qualified beneficiaries with Medicare premium and out-of-pocket costs.

I am Larry Kocot, Senior Advisor to the Administrator of the Centers for Medicare and Medicaid Services.  In my role at CMS, I have been deeply involved in the policy development and implementation of Medicare Part D, including outreach efforts designed to reach beneficiaries who may qualify for extra help.

Today, roughly 39 million Medicare beneficiaries, more than 90 percent of all those eligible for prescription drug benefits, are receiving the drug coverage they need.  Without question, Part D has had a positive impact on the lives of people with Medicare, especially those who receive the low income subsidy.

A primary goal of the Medicare Modernization Act was to provide access to prescription drugs and generous financial assistance to beneficiaries with the greatest need.  That is what CMS is doing today.

The low income subsidy provides substantial help to beneficiaries with limited incomes, and includes the Federal premium subsidy ranging from 25 to 100 percent of the monthly premium cost for qualified plans and minimal cost sharing for covered drugs.

Over 75 percent of low income beneficiaries eligible for extra help now receive comprehensive drug coverage at little or no cost.  That is 10 million out of an estimated 13.2 million people.  With the extended special election period allowing subsidy approved beneficiaries to enroll without penalty, we expect these numbers to continue to grow throughout 2007.

Compared with other means tested programs, enrollment in the Medicare low income subsidy is impressive.  However, we will not rest until we have reached and assisted every Medicare beneficiary who qualifies and wants to apply for the low income subsidy.

Our work to identify and enroll these beneficiaries has been a multi-faceted and continuous effort that did not stop with the end of the statutory enrollment periods.  Given that many of these beneficiaries are very difficult to reach through traditional means, CMS has designed special ongoing initiatives to target those living in areas that general community outreach efforts may miss.

To reach the estimated three million beneficiaries who may be eligible who have not yet enrolled in the low income subsidy, CMS will pursue innovative non-traditional outreach techniques.  We will sponsor multi-media campaigns, and we are going to expand our grassroots networks.

We are working closely with more than 40,000 partners who sponsored and participated in over 12,700 events to date.

The one-on-one counseling and personalized attention made possible by these partnerships have enabled CMS to reach tens of millions of people one at a time.

CMS recently launched a targeted data driven outreach effort with the Administration on Aging to provide resources to community based organizations and the National Aging Services networks, so they may provide personalized assistance to low income Medicare beneficiaries.

Additionally, CMS recently announced $34.2 million in direct grants and program support to the state health insurance assistance programs, the SHIPs, which will build capacity for local counseling sites to reach LIS eligible individuals in the hard to reach populations.

Our just launched initiative, "A Healthier U.S. Starts Here,'' is another component of this comprehensive effort.  CMS and HHS will criss-cross the country by bus to raise awareness about disease prevention.  At more than 300 public events, we will promote Medicare covered tests and screenings, as well as the availability of the extra help with prescription drug coverage.

In fact, eligible Medicare beneficiaries will have the opportunity to apply for the low income subsidy on-site at these 300 locations.

People enrolled in Medicare savings programs, the MSPs, are automatically eligible for the Part D low income subsidy.

Through these joint Federal/state programs, qualifying low income Medicare beneficiaries are entitled to limited assistance with Medicare Part A and B premiums, deductibles and cost sharing, depending upon their income status.

In general, the MSPs make Medicare coverage more affordable for low income beneficiaries and thus promotes access to critical health care services.

While MSP enrollment has grown in recent years, reaching this population is especially challenging and time and resource intensive.  To assist states with MSP enrollment, beginning this year, CMS will begin sharing leads data, that is data on those who have applied for LIS and have either been accepted or rejected, on a monthly basis, so they may target outreach to potential MSP eligible individuals in their states.

Outreach to promote and increase enrollment in the Medicare Part D LIS and related benefits, including the state based Medicare savings programs, is now part of the permanent campaign at CMS.

We look forward to working with SSA, our partners here, and our partners in the local communities, as well as the Subcommittee, to refine our efforts to achieve even greater success in finding and enrolling all of the LIS eligible beneficiaries in Medicare.

Again, thank you for the opportunity to appear today, and I would be happy to answer any questions that you may have.

[The prepared statement of S. Lawrence Kocot follows:]

*Chairman Stark.  Thank you very much.  I think at this point, we will recess for about 15 minutes until we return from the vote, if you two would not mind waiting for us.  Maybe we can even find you a cup of coffee while we are gone.

[Recess.]

*Chairman Stark.  The Committee will resume the hearing.  Members will be returning a bit at a time from the Floor and their votes.

Mr. Kocot, I guess I'm disappointed in the lack of suggested solutions or a discussion in your testimony of the problems that need to be solved.

It was a marvelous ten pages of praising the Agency and detailing your past efforts, but I did not find that you acknowledged what more could or should be done or even any evaluation of the effectiveness of some of the strategies you mentioned, that you have had contracts for programs, but I could not gather from your testimony what the results were.

At the bottom of page ten, you give us a little hope in that you pledge a commitment to do more.  I could not find out what "more'' was.

Could you help us help you help the beneficiaries?  I would like to know what you think can be done administratively to get more folks the benefits of LIS and MSP, to which they are entitled.

Tell me what you can do and what you plan to do administratively, and then would you suggest what we can do legislatively that you will support to help accomplish this goal.

*Mr. Kocot.  I will be happy to, Mr. Chairman.  First, let me take a step back because I want to just kind of ground this discussion and the fact that we are only in the second year of this program.  It is a brand new benefit.  Our primary objective was to get the benefit up and running and get the people in that needed the help that we could get.

We undertook a massive effort--

*Chairman Stark.  This is also about the Medicare savings programs.

*Mr. Kocot.  I understand that, sir.  I am getting to that.  We undertook a massive effort to reach a lot of people in a very short period of time, get them in.  Get them enrolled.  Get them signed up for a benefit, in addition to signing up for the Medicare benefit.

Going back to the MSP programs, back in the early part of the decade, we did a lot of research on what was effective and what was not effective.  We learned quite a bit from that research, particularly in that large Government programs, large Government efforts, largely do not work for the people who are the hardest to find, specifically those in minority communities, the poorest of the poor, and so forth.

It is the one-on-one counseling and outreach to them through local organizations, through trusted intermediaries, that works best with that population.  We have penetrated quite a few in the initial stages of this benefit.  We are now focusing our campaign towards those hardest to reach, those most resource intensive and most expensive population to reach, to get those in the community to work with us on targeting them on an one-on-one basis.

In terms of what we are actually doing specifically in terms of the minority communities, I mentioned in my testimony and in my oral what we are doing with some of the larger organizations, but it is really the on the ground organizations that count the most.

We are working with the NAACP, the National Center for Black and Aged, the National Hispanic Council on the Aging, the National Asian Pacific Center on the Aging, the Office of Minority Health.

We have targeted efforts in the African American community planned, and already, I will say our minority enrollment, particularly in the African American, Hispanic and Asian populations is above the average.

We feel like we have had a considerable amount of success so far, but our effort really has to turn now to a more focused hand-to-hand--

*Chairman Stark.  Are those both LIS and MSP or just LIS, those outreach programs?

*Mr. Kocot.  This is primarily for LIS.  Remember, on MSP, our charge is a little bit different.  Specifically with MSP, we do alert beneficiaries in the Medicare and You Handbook they get about the MSP program.  We participate with the 1144 letters with Social Security that go out to MSP eligibles or who we think are MSP eligible.

We are launching a campaign this year to provide more data to the states for MSP enrollment, our leads program, and we will continue.

As a matter of fact, the campaign that we have going on in the grassroots community dove tails very, very nicely with what the states might want to do on MSP.

Remember, the MSP program is a Federal/state initiative.  It really is a partnership with the states, so the states have to participate as well.  We are making those opportunities available, but that is for them to decide on how they want to participate.

*Chairman Stark.  What can we do legislatively that you would support?  Anything?

*Mr. Kocot.  I do not know that you can do anything legislatively for us to reach these people on an one-on- one basis.  That is really up to partnerships with local organizations, and that is relationship building.

We are doing everything that we can right now, we think, that we possibly can, but obviously, we can do more, more creativity and working with us and having these discussions that we find very, very helpful. If you have ideas, we are happy to incorporate them into our efforts, and certainly we have not found the magic bullet, but we are going to keep banging away at it.

*Chairman Stark.  I would just note that your recent handbook does not mention MSP until somewhere back after 70 odd pages.  Any reason you hid that toward the back of the book?

*Mr. Kocot.  I cannot speak to that directly, sir.  Although I will tell you that much of that handbook, I believe, is mandated by statute.  I am not so sure about the ordering, but there is a lot in that because a lot is required.

*Chairman Stark.  It is my understanding, Ms. Disman, that you send Mr. Kocot and his colleagues a lot of information that you receive for people who apply for various programs.  You send them asset information, income information that you receive; is that correct?

*Ms. Disman.  We provide information to CMS on our daily decisions.

*Chairman Stark.  Both people who qualify and do not qualify?

*Ms. Disman.  Both people

*Chairman Stark.  What do you do with that information, Mr. Kocot?

*Mr. Kocot.  I am sorry, I did not follow the answer.

*Chairman Stark.  You get a lot of information from Ms. Disman about people who apply for various programs through Social Security.  That information includes income information, asset information, a whole host of very valuable stuff.  What do you do with it?

*Mr. Kocot.  As I said, we are going to be providing quite a bit of it to the states.

*Chairman Stark.  But right now you do not do anything with it?

*Mr. Kocot.  I will have to get back to you on the specifics of--

*Chairman Stark.  What do you think the states will do with it?

*Mr. Kocot.  Presumably, if we are giving it to them and they want it--

*Chairman Stark.  There is somebody that knows what you do with it.  In terms of the LIS data, let me give her a raise.

*Mr. Kocot.  I am sorry?

*Chairman Stark.  Never mind.  Go ahead.

*Mr. Kocot.  We use the LIS data to facilitate enrollment for those who are not dual eligibles.

*Chairman Stark.  Facilitate what?

*Mr. Kocot.  Facilitate enrollment.

*Chairman Stark.  How?

*Mr. Kocot.  We place LIS eligible beneficiaries who have not selected a plan by the end of the enrollment period into a plan.

*Chairman Stark.  You just automatically enroll them without consulting them?

*Mr. Kocot.  We automatically enroll them if they have applied for the subsidy or if they are qualified for the subsidy and they have not enrolled in a plan.  It does not do them much good to have a subsidy if they are not enrolled in a plan.

*Chairman Stark.  Again, I guess your answer to the other question is you really cannot think of any legislation that we could do that would help you.

*Mr. Kocot.  I cannot think of any right now.

*Chairman Stark.  Okay.  Put your thinking cap on.

Mr. DOGGETT.  Will you yield?

*Chairman Stark.  Sure, Lloyd.

Mr. DOGGETT.  Mr. Kocot, I gather that you agree with the thrust of Mr. Camp's opening statement and comments others of us have made that on this program, the low income extra help program, as with all other aspects of Government, what we are after is the most cost effective solution.

*Mr. Kocot.  That is right.

Mr. DOGGETT.  How much on this multi-media campaign that you say you are about to launch, how much money is the Medicare Administration expending to try to get more people in the low income extra help program?

*Mr. Kocot.  I do not have an exact figure for you.

Mr. DOGGETT.  Is that something you could give us next week?

*Mr. Kocot.  I can try.

Mr. DOGGETT.  You cannot think of any legislative ideas, but of course, you are aware, although I know you are Director of Legislation at Medicare and was not aware even as of the day before yesterday that the Social Security Administration, about the first thing they did after this bill was enacted, was to ask the Internal Revenue Service for information on who should be targeted to receive this benefit.

You are aware of that today, are you not?

*Mr. Kocot.  I defer to SSA in the conversation they had with IRS.

Mr. DOGGETT.  I am asking you, sir.  Are you aware today from my testimony--have you ever looked at the Inspector General's report?

*Mr. Kocot.  Yes, I have, sir.

Mr. DOGGETT.  You are aware, if you have read it, that the Social Security Administration shortly after this bill became the law, asked the Internal Revenue Service for information about who would be eligible for this extra help program, are you not?

*Mr. Kocot.  Yes.

Mr. DOGGETT.  Yes, sir.  They declined to give it.  The Inspector General, a Republican appointee, Health and Human Services, said "Access to IRS data would help CMS and SSA identify the beneficiaries most likely to be eligible for the subsidy.''

They pointed out similar information that is used with other programs.

Do you disagree with the conclusion that I have just read from the Inspector General?

*Mr. Kocot.  I do not know that I disagree with the conclusion.  I do not know that the conclusion is as well informed as it could be, with all due respect.

Mr. DOGGETT.  You do not disagree with the conclusion, but you think there is more to the story?

*Mr. Kocot.  Yes, I do.

Mr. DOGGETT.  If you do not disagree with the conclusion that access to the data would help identify the beneficiaries, instead of doing a scatter shot multi-media approach, why has not CMS come forward and recommended and why are you not recommending in answer to the Chairman's question that we change the law to make that information, that limited information, available so you can do a better job?

*Mr. Kocot.  First of all, sir, the information that you are talking about, because of the population that we are talking about, it is questionable how effective that information would be in terms of finding the beneficiaries that we are looking for.

Mr. DOGGETT.  It would find some, would it not?

*Mr. Kocot.  It would exclude some.

Mr. DOGGETT.  It would identify some individuals who have less than $13,000 in income, would it not?

*Mr. Kocot.  I do not know about specific income thresholds.

Mr. DOGGETT.  I am talking about the threshold that applies to this program.  There is no reason that you could not identify--you might get all three million--you could identify some of them.

*Mr. Kocot.  No, the IRS, in conversations that we have had with the IRS, they have indicated that we might identify 100,000 to 200,000 people of the entire population.

Mr. DOGGETT.  Let me ask you, when did you first ask the IRS for that information?

*Mr. Kocot.  I do not know the exact date.

Mr. DOGGETT.  When did you personally get involved?  In anticipation of this hearing within the last few days?

*Mr. Kocot.  Yes.

Mr. DOGGETT.  Yes, sir.  Who did you talk to over there?

*Mr. Kocot.  Yesterday, we had a conversation with your staff.  I do not know exactly who--

Mr. DOGGETT.  You do not know the names of anyone you talked to at the Internal Revenue Service?

*Mr. Kocot.  We can get it for you.

Mr. DOGGETT.  I will continue in a few minutes.  Thank you, Mr. Chairman.

*Chairman Stark.  Mr. Camp?

Mr. CAMP.  Thank you, Mr. Chairman.  Thank you both for your testimony.

I have a question particularly.  The low income subsidy has an outreach or enrollment of 10 million out of the 13 million eligible in just 14 months of the program, which means 75 percent of those eligible are enrolled.

The MSP has in the QMBs about 33 percent enrolled, and in the specified low income Medicare beneficiaries, about 13 percent enrolled, and that is over a 30 year period.

You correctly pointed out in your answer to Mr. Doggett that one is simply a Federal run program, one is a combination of state and Federal programs.

In terms of the Part D program, we have a fairly high level of outreach that has been very successful.

My question, Mr. Kocot, what flexibilities are currently available to the states to help simplify the application and enrollment process for the MSP program as that is a Federal/state partnership?

*Mr. Kocot.  Actually, the states have quite a bit of flexibility in terms of the MSP programs.  At least a few years ago, we actually developed a model application with the states that many are now using.  The states have a lot of flexibility in determining--for example, the states can do on line enrollment if they wished.  A lot of their rules vary by states.  They can alter their rules.  They do not have to use some of the asset and income restrictions that some of them do use.  Those are choices they make.

There is quite a bit of flexibility in terms of how they determine addition a liquid assets and so on.  The states have quite a bit of flexibility to tailor their programs.

Mr. CAMP.  There is an asset test with these programs.  What is the reason behind that?  What is its purpose?  Why does it exist?

*Mr. Kocot.  These are means tested programs.  If people have sufficient assets to afford their health care, that is something they should be paying for rather than the state.

The asset test is designed to really exclude those people who can afford this benefit without the state financing it.

Mr. CAMP.  I have a question for both of you.  In my district, we have encountered some difficulties in the premium withholding part of Medicare Part D.  As you know, this is when the Social Security Administration tracks a beneficiary's premium for a monthly Social Security benefit.

We have experienced some difficulties that I have heard from my constituents in my district office when beneficiaries change their plans but continue to have the premiums withheld from their old plan.

My office has contacted CMS and SSA.  They have tried to speed this process along.  We are routinely told it will take three to four months to have people get their money back and to fix the situation.  In my view this is far too long, it is unacceptable.

I am concerned that as we require different agencies to share information, more problems like this can occur.  How are SSA and CMS working to resolve this problem, if you know, and if Congress requires or allows more automatic enrollment, how will we be certain that agencies will work together on these issues?

*Ms. Disman.  We share your concern that the Social Security payments be accurate and also be timely.  Certainly, CMS and SSA have worked together over the last three years in first setting up the requirements for the premium withholding, and I need to step back a moment because you (the beneficiary) tell your prescription drug plan that you want to have premiums withheld from your Social Security check.

That then goes to CMS and CMS sends the data to Social Security.  Certainly, the accurate and timely transmission of data is a very significant factor.

Both organizations, CMS and SSA, have worked extremely close to resolve the issues that we did experience during 2006 and certainly I am pleased to tell you that for 2007, all of the premium withholding transmissions that have come have been greatly improved.

I will say, and I will turn to Larry Kocot for 2006, we actually are working with CMS on the issue.  We have sent them an abstract of our files.  They are in the midst of a reconciliation.  They, themselves, are looking at 2006.

More importantly, we have joint task forces that are looking at every aspect of the data exchange.  I can tell you we had a major meeting in February to go over and identify problems, not just the IT people, but the program people, the business rules people.  We really needed to get everyone in the same room to understand what was happening.

We set up five major subgroups with priorities on things to look at, and the status that I have is that these groups are working very well. It is my understanding that we expect to hear their recommendations shortly.

The good news is that 2007 is proceeding in a much smoother way.

Mr. CAMP.  Thank you very much.  If you could just briefly answer.  My time has expired.  If you could just be brief, Mr. Kocot.

*Mr. Kocot.  I would just echo that.  We had some early problems, as you know, with beneficiaries changing plans in the first few months of 2006.  The systems that we had designed early on frankly did not accommodate a lot of quick changes the way our rules allowed, so we had a lot of things that we had to do with business rules.  There is a lot of complex interfaces between our systems and so forth.

As Ms. Disman has said, we have done quite a bit of work and we will continue to do as much work as we need to do to get these systems working together so beneficiaries have little problem.

Mr. CAMP.  Thank you.  I thank the Chairman for the extra time.  Thank you.

*Chairman Stark.  Mr. Pomeroy, would you like to inquire?

Mr. POMEROY.  Yes, I would, Mr. Chairman.

The extra help dimension of the Medicare Part D plan is an extremely significant benefit, but I am informed that the estimates are 40 to 60 percent of eligible beneficiaries are participating; is that correct?

*Mr. Kocot.  No, that is incorrect.  Seventy-five percent of those who are eligible for some form of extra help are in the program.

Mr. POMEROY.  If you exclude those automatically enrolled, the dual eligible population, how many?

*Mr. Kocot.  If the auto enroll population is approximately 6.6--

Mr. POMEROY.  The data I have is you have six million that are dual eligibles and automatically enrolled that is the low income help part.  You have three million that are in on the extra help part, and that represents roughly 40 to 60 percent of those, aside from the dual eligibles, that are eligible for this extra help.

Does that roughly strike you as correct?

*Mr. Kocot.  That is probably ballpark; yes.

Mr. POMEROY.  We have a tremendous benefit that is basically free drug coverage, and we have about half the population in it.  We have a product that is essentially free money and only one out of two is taking it.

This is the worse sales job in the history of the country, if you cannot give away free money to more than half of those eligible.

I understand some serious efforts that been made.  I think we have some program design issues, and I really admire my colleague, Congressman Doggett, in his leadership to try and get to the bottom of this.

A concern I have is that we are not doing an adequate job of getting people enrolled, and by the way, while we are at it, we are hurting our Social Security regional offices in terms of providing the work they need to do on Social Security.

We had a hearing two days ago in the Subcommittee on Social Security that showed the backlog on disability determinations just as one aspect of the program is at an all time high, never higher.  This is really before the baby boomers retire.

What we are in for scares me to death, without really taking a look at these systems.

Ms. Disman, I thought that your report on what SSA has been attempting to do was really positive.  I think you all have done yeoman's work.  I know they have in North Dakota.

I will never forget sitting at an enrollment forum with a couple from the North Dakota regional office, and they could not even get their phone answered because there had been a hiring freeze and they had lost personnel.  They were down to two in the office.  They just could not get it all done.  They were trying their little hearts out.

What extra resources have come into SSA relative to the new expectations we have now with trying to get people signed up for extra help on the Medicare Part D proposal?

*Ms. Disman.  Let me go back a little bit.

Mr. POMEROY.  I do not have much time, so do not go too far.

*Ms. Disman.  I will not go too far.  With MMA itself, initially, I think you know that Social Security received $500 million to implement MMA in 2004 and 2005.  We actually carried over $111 million of that into 2006.  Right now, the expenditures that we do for MMA come from our limitation account, our LAE account.

We actually draw down from the Supplemental Medical insurance trust fund, and a very significant item is that while we have hired people before, trained 2,200 people on the front line in those offices that you were talking about for MMA. The fact that the President's budget has not really received the Congressional support for the last five years for Social Security, we did not receive its funding, certainly does have an impact on all of our workloads.

I certainly am aware of the hearing that you had the other day.

Mr. POMEROY.  We are going to do better than what the President has asked for this year, and it has been shameful that those other Congress' have not funded Social Security, and there is no coincidental relationship between the failure of earlier Congress' under different management to fund the President's request for SSA and the fact that we have a record number on Social Security disability.

We also have them waiting to have their Social Security disability determined, among other things.  The walk in service deteriorated dramatically.  People waiting an hour to get their phone calls answered, not their questions answered, their phone calls answered, and on and on.

You just told us the money that was allocated to SSA for purposes of getting extra help is spent; is that correct?

*Ms. Disman.  Yes, it was.  It was funds for 2004 and 2005 and $111 million was moved to 2006.

Mr. POMEROY.  Did the administration request more funds for that?

*Ms. Disman.  The funding for this comes from our regular LAE accounts, and we draw down from the Supplemental Medical Insurance Trust Fund.  There really is not targeted funding specifically.

Mr. POMEROY.  Our SSA offices are out of money for this purpose, yet we have only signed up about half of those eligible.  We have a lot of work to do.  Looking at the capacity in our systems to do the work we are asking them to do has got to be a part of what this Congress requires.

I think there have been significant efforts on the front line, but we have to get you enough resources so you can realistically get done what we are asking you to do.

Thank you, Mr. Chairman.  I yield back.

*Chairman Stark.  Mr. Ramstad, would you like to inquire?

Mr. RAMSTAD.  Thank you, Mr. Chairman.  Thank you to both of you expert witnesses.  Appreciate the good jobs you do out there every day, tough jobs, and you are doing them well.

Mr. Kocot, I want to ask you a question.  I want to focus on the broader health care needs of lower income individuals.  The empirical data certainly support the claim that lower income people typically suffer from more chronic conditions and have greater health care problems.

I believe that traditional Medicare does the best job it can with the resources, limited resources, it is given.  There is often little disease management and coordination of care

On the other hand, Medicare Advantage relies on these types of programs to both keep beneficiaries healthy and to save money.

Can you talk about the importance of disease management and coordinated care, especially for lower income beneficiaries, and also could you elaborate on how this can save Medicare dollars in the long run, is it not in fact the cost effective way to go?

*Mr. Kocot.  The simple answer to that, sir, is we truly believe that to be the case, but rather than just believing it, the MMA gave us many tools to try to test those hypotheses, and that is what we are doing.

As you point out, the low income, particularly the population that is eligible for LIS, is typically a sicker population and coordination of care is a true issue with their health needs.

We have a lot of different plans that are experimenting with not only coordinated care but also disease management.  We have special needs plans that are specifically focused on specific conditions and the coordination of care.  We have demonstration projects on disease management and coordinated care.

We are really looking forward to seeing what the results of those demonstrations are to tell you exactly on the question you are asking, how much money does it save.

Intuitively, coordinated care is going to save money.  Disease management on the other hand, we need to see what specific programs work the best with these populations.  Multiple chronic conditions and so forth, what works best together in order to really target the resources so we can save the maximum amounts possible.

We will have a lot of data coming, but we are not there yet.

Mr. RAMSTAD.  When do you believe the findings in these studies will lead to definitive conclusions?  In other words, when are the studies going to get back to you?

*Mr. Kocot.  In terms of some of the disease management and coordinated care demonstrations, I believe we have some interim reports.  We have others coming over the next couple of years.

That is not to say that all of those will be definitive.  What the demonstrations are doing is looking at specific protocols, specific programs and seeing if they work.  That is not to say that we have reached or penetrated all that might work, and we are going to continue working on this as we move into an era of better data and better coordinated care and probably a lot more evidence based results that we can put into practice.

Mr. RAMSTAD.  I have another question, Mr. Kocot, I would like to ask you.  I will try to be brief.  We all know about the really huge burden that long term care is placing on state Medicaid programs.  Certainly, my state of Minnesota is no exception.  States often are seeking waivers to move dual eligibles from intensive and costly long term care to more appropriate and less costly assisted living facilities, as you know.

This creates a problem for a lot of people.  Under Part D dual eligibles who live in nursing homes and other institutions do not have to pay co-pays while assisted living residents must pay them, even though they are nursing home eligible.

In the last Congress, several of us introduced the Co-Pay Equity Act to address this problem, but it did not get to the Floor for a vote.

As we begin to consider this problem again in the 110th Congress, I wanted to ask you why should these dual eligibles have to pay co-pays?  What is the policy reason for that?

It seems to make no sense.

*Mr. Kocot.  The exact provision you are pointing to is, it is institutionalized dual eligibles that get the zero co-pay.  As you know, assisted living is not considered an institution under our interpretation of the statute.  That does create a problem for assisted living facility patients, particularly dual eligibles.

We certainly support and share with you the goal of providing the right incentives to get people out of long term care facilities and into assisted living facilities and into community based care.  We will continue to pursue that.

However, I think we still need to do a little work to determine whether or not providing a zero co-pay will provide the appropriate incentives.  For example, most of the people that you are talking about, if they are not dual eligible, they would be either LIS or dual eligible, non-institutionalized beneficiaries and are only paying a couple of dollars in co-pays, is that enough for these beneficiaries to incent them to go to assisted living.

It is a complex problem.  We are continuing to look at it.

Mr. RAMSTAD.  It is a complex problem, I understand that.  Can we simplify it by eliminating these Part D co-payments?  Would that not in fact remove a disincentive for Medicaid beneficiaries to live in assisted living or the community rather than in a more costly institution?

*Mr. Kocot.  Again, I do not know whether the co-pay itself would be enough to incent someone to go to an assisted living facility from a long term care facility.  I think there are a lot of other factors in play.  There are a lot of other expenses in play as well.

Mr. RAMSTAD.  Other factors, you are alluding to overall health and the economics of it as well?

*Mr. Kocot.  Precisely.

Mr. RAMSTAD.  You sound willing to look at it and work together to delve into it.

*Mr. Kocot.  Absolutely; yes, sir.

Mr. RAMSTAD.  Try to solve what I see as a real dilemma and one that needs to be fixed.  Thank you very much, both of you.  I yield back.

*Chairman Stark.  Mr. Becerra, would you like to inquire?

Mr. BECERRA.  Yes, Mr. Chairman.  Thank you.  To the two of you, thank you very much for your testimony and we look forward to working with you as we try to resolve some of these issues.

If I gave you 15 seconds each, tell me how we make the system work better under the current operating structure that we have.  I will start the clock running.

*Mr. Kocot.  Which system?  We have quite a few.

Mr. BECERRA.  How do you get those who qualify for the low income subsidy to better enroll and those who qualify for the savings programs under Medicare to enroll?  How do we get the millions who we know are eligible, as Mr. Pomeroy said, it is free money in essence, how do we get them to better enroll under the current system in 15 seconds or less?

*Mr. Kocot.  I will take my 15 seconds first and talk fast.  I think for the LIS population, we have done, as I said earlier, quite a bit of research on this.  It is the hand-to-hand partnerships, trusted relationships, the community based relationships that are going to get those people into the program.

We are using those relationships.  We are leveraging them now.  We will be doing quite a bit more in the coming year.

With regard to the MSP programs, we are providing data.  We are offering the opportunity for states to partner with us on these relationships, and if we can reach them with states, I think we have a good chance of enrolling some more of those as well.

Mr. BECERRA.  Good job.

*Ms. Disman.  I want to talk about who we are, Social Security.  We are in the community.

Mr. BECERRA.  Fifteen seconds.

*Ms. Disman.  We are in the community.  We do deal with people one on one, whether it be our field offices or 800 number.  The focus that we really need to do is to get targeted types of individuals to deal with,  we make phone calls to people that we think might be eligible.

We just made 300,000 calls to people that had the 600 dollar credit to see if they would be eligible for the Low-Income Subsidy (LIS).

It is how you narrow the list to identify people that might be eligible.

Mr. BECERRA.  What I am hearing is that within the current system, you think that we can do a better job of getting the millions who have not yet for whatever reason decided to take advantage of a way to save money that they right now use for rent or food or could use for rent or food and right now they are using for their medical care.

Is there no belief that we have to sort of put a little explosive there under the current system and say it has not worked.  We have 40 to 50 percent of people who could apply for some of these programs who do not, and go with something that changes the paradigm here?

For example, why are you not proposing to us that we take the two programs and say rather than have different criteria for eligibility, that we will standardize that, so that instead of filling out one very complicated four or five page form in one case, and then have to fill out another very complicated four or five page form which asks for different information, which means you may qualify for one but may not for another, why not just come out with one form so that some of these seniors on fixed income, some not really financially literate, have an opportunity to qualify for that which they work for, and that is the benefits of these Medicare programs?

*Ms. Disman.  I think you are referring to both the Medicare Savings Programs and the LIS.

Mr. BECERRA.  Correct.

*Ms. Disman.  I can talk about the LIS because certainly there are different standards.

Mr. BECERRA.  Ms. Disman, I want you to tell me what is wrong with what I just proposed?  Why do we have to have two different sets of criteria to qualify for a benefit that is provided through Medicare?

*Ms. Disman.  I would have to yield to Mr. Kocot, since the whole Medicare program is under their jurisdiction.

Mr. BECERRA.  Let's go to Mr. Kocot.

*Mr. Kocot.  Let me point out that the MSP program is actually a Federal/state partnership run by the Medicaid agencies.  It is partially funded by the Federal Government and partially funded by the states.  There are other parties at interest here as well.

Mr. BECERRA.  You provide them with the information that helps them qualify these folks for the program; right?

*Mr. Kocot.  We are beginning to, yes.

Mr. BECERRA.  Without the information you provide them, they cannot qualify anybody for the program?

*Mr. Kocot.  No, that is not true.  They can qualify people for MSP within their states.  They have the means to do that.

Mr. BECERRA.  Are they going to do it?

*Mr. Kocot.  That is a decision that every state has to make in terms of the level of effort.

Mr. BECERRA.  Have they done it?

*Mr. Kocot.  Some states have done it better than others.

Mr. BECERRA.  Maybe you can provide us for the record which ones have because what I find is when you have millions of seniors who are on fixed income, who are using their money to pay for a Medicare benefit to which they would be entitled to receive at no cost or very low cost, and are trying to figure out how they buy groceries for the next week, I would think that you would want to change the paradigm that we have now, rather than talk about how the states might come up with a system because they have a Medicaid office.

Does not the Social Security Administration have these 1,300 offices, Ms. Disman, that you mentioned, that make it so valuable to try to reach out to all those seniors?  Could we not use those 1,300 offices to do this joint effort instead of having some who know about one program and some who know about the other program and in some cases, many people knowing about neither one?

It is crazy.  This is what drives people bonkers about Government bureaucracy.  Explain to a senior why they would have to apply to two different places, filling out two different applications, complicated applications, for a benefit under in essence the same Government program?

*Mr. Kocot.  They are not the same Government program.  That is the point.  These are different Government programs.  That is the way Congress designed it.

*Chairman Stark.  Will the gentleman yield?  We could change it, could we not?

Mr. BECERRA.  Yes.  Mr. Kocot, we want to get past the bureaucratic obstacles that seniors have to getting health care; right?  Is that a shared goal?

*Mr. Kocot.  Yes.

Mr. BECERRA.  Ms. Disman?

*Ms. Disman.  Yes.

Mr. BECERRA.  We want to get there.  We also acknowledge that we have millions of seniors who we know qualify for these medical benefits, whether it is prescription drugs or just general health care under Medicare who are not receiving them.  Agreed?

*Mr. Kocot.  The numbers clearly show that; yes.

Mr. BECERRA.  Ms. Disman?

*Ms. Disman.  Yes.

Mr. BECERRA.  We know that part of this is that folks do not understand the programs or are not aware of the programs or find them too complicated to navigate.  Fair?

*Mr. Kocot.  In part; yes.

Mr. BECERRA.  Ms. Disman?

*Ms. Disman.  Needs based programs are complicated; yes.

Mr. BECERRA.  Why not try to find the simplest way to make sure folks who are eligible because they worked hard for these benefits in their years, productive years, who are now in retirement and able to receive these programs by simplifying the process, not making it more susceptible to fraud, not making it a give away to those who do not deserve it, but for those who deserve it, simplifying it so they do not have to worry about whether they are actually applying for something they are entitled to receive?

*Mr. Kocot.  One of the things that we are both committed to is providing more data to the states because as you know, qualification for the MSP program is going to get someone LIS qualification as well.

Mr. BECERRA.  Have you not given them enough data over the years?  What you are saying is you need to give them more data.  We have not given them enough data to help them get enrolled, all these seniors who have not enrolled?

*Mr. Kocot.  We are committed to giving them more data.

Mr. BECERRA.  That does not--

*Mr. Kocot.  So, they have better targeting.

Mr. BECERRA.  My time has expired, Mr. Chairman.  I will yield back.  This is the difficulty.  You are either saying to me that you have been derelict in providing data to the states and therefore, they have not enrolled these seniors who are qualified and entitled to these benefits, or that the states have not been receiving the information they need to be able to know whom to enroll in programs that these seniors are eligible for and entitled to receive.

Both of those are bureaucratic and I think unacceptable responses because there is no guarantee if you provide one more bit of information or data to the states that they will actually enroll more people, that the end result will be more people enrolled.

While you are providing that data and during the bureaucratic running in place, there are seniors who are spending a lot of money for health care instead of on other basic necessities that should not have been spent for that.

I think that is unconscionable that we do that.  I would hope that you all would be able to work with us to figure out ways to streamline the system to remove the bureaucracy so we get these folks what they have earned over the years of their work.

I yield back, Mr. Chairman.  You have been gracious with the time.

*Chairman Stark.  Mr. Doggett?

Mr. DOGGETT.  Thank you very much.

Let me ask you, Ms. Disman, as I understand it,  you were designated by the Commissioner of the Social Security Administration as an expert to present on behalf of the SSA today on the low income or extra help program.

*Ms. Disman.  Yes, sir.

Mr. DOGGETT.  I appreciate your testimony and your interest in working with us to reach more of these individuals.

In your professional work, have you had an opportunity to look at either the document or a summary of the document that the Social Security Administration sent to Internal Revenue Service asking for information about those who would be eligible for extra help?

*Ms. Disman.  I actually participated in the meetings, sir, with the Internal Revenue Service.  We knew identifying the potentially eligible individuals would be a daunting task.

Mr. DOGGETT.  Yes, indeed.

*Ms. Disman.  We wanted to really narrow the field for the outreach.  We looked at what the Lewin Group had done for the Medicare Savings Programs over the years, and it was really important to identify a targeted population that we could really focus on.

Mr. DOGGETT.  Indeed, because of the millions of people eligible for Part D, only a small portion of them were eligible for extra help; correct?

*Ms. Disman.  We did have a discussion with them.

Mr. DOGGETT.  Did you have a written communication?

*Ms. Disman.  No, there was not a written communication, sir.  We were there in a session talking about what kind of data.  Being the Regional Commissioner of New York, I am very familiar that we get 1099 data and other data for the SSI program.  I know we do not have data from our matches on pensions and other kinds of things.

We really wanted to narrow the 19 million, which we ultimately sent initially, by doing the screening.  Of course, based on the statute, IRS had indicated to us that there would have to be a modification of 6103 in order to be able to use the data for screening.

We do understand there are privacy concerns and other concerns.  As a matter of fact, sir, we have been talking to IRS about the potential for us even to do a study. For example, if we send you some names and stuff, without you telling us, can you tell us how helpful some of your data would be?  We are actually still currently talking to them.

Mr. DOGGETT.  You are aware that on November 17th, the Inspector General, Mr. Daniel Levinson, of the Department of Health and Human Services, sent a communication to Leslee Norwalk, the Acting Administrator at the Centers for Medicare and Medicaid Services, concerning the Social Security request to the Internal Revenue Service, and recommending that legislative action be taken to make that data that Social Security had sought and been denied, to make that available?

*Ms. Disman.  I have seen the letter; yes, sir.

Mr. DOGGETT.  Since November 17, 2006, are you aware of anything that Ms. Norwalk or Mr. Kocot or anyone else at the Center for Medicare and Medicaid Services has done to attempt to get that legislative approval?

*Ms. Disman.  I am aware they were involved in discussions but I was not a party to those, so I cannot comment.

Mr. DOGGETT.  Is there any disagreement that you have with the recommendation of the Inspector General?

*Ms. Disman.  I think the data would be helpful to screen beneficiaries to determine whether or not there is potential eligibility.  It would make our process much more efficient in trying to narrow the scope of people.

Mr. DOGGETT.  Thank you.  That is the sole objective of that portion of the legislation that I have discussed with the Committee this morning, H.R. 1536.

Let me ask you about one other aspect of that, and that is the complexity for seniors who are visiting with people all over the country trying to decide if they are eligible under the asset test.

If someone receives help from their children in regularly paying their grocery bills, if they receive Meals on Wheels, a hot meal from a community service, if they receive breakfast from their church, is it possible those things will get included in the in-kind support and maintenance portion?

*Ms. Disman.  I would like to refer, sir, to the application.  Very specifically, we do say that certain things are not to be counted.  If you look at our application, and you certainly do not have it in front of you, it says "Do not include food stamps, house repairs, help from a housing agency, an energy assistance program, Meals on Wheels, and medical treatment and drugs.''

It tends to be assistance that people receive in paying for their rent, paying for their telephone bills, paying for some of their groceries.  It has to be regular.  This comes from the SSI statute, which is really the directive of MMA.

Mr. DOGGETT.  If a family member buys food for a senior, would that fall within in-kind support and maintenance?

*Ms. Disman.  If it is regular throughout the year.

Mr. DOGGETT.  If a church that is not Meals on Wheels provides a breakfast program or hot meal program for its members?

*Ms. Disman.  That would not be included.

Mr. DOGGETT.  Would not be included, although it is not mentioned on the application specifically.

*Ms. Disman.  That is correct.

Mr. DOGGETT.  It might involve some discretion around the country in how that is done.

I suppose that if there were a way to fulfill the objectives of the law and simplify the application, Social Security would have no objection to that?

*Ms. Disman.  Any simplification of a means tested program makes it easier to administer and easier for the public to understand.

Mr. DOGGETT.  Would you agree that there are a number of people of very modest incomes, poor seniors, who have been denied participation in the low-income subsidy program?

*Ms. Disman.  We have provided some information to your staff and to yourself.

Mr. DOGGETT.  I appreciate that.

*Ms. Disman.  About the people that are denied.  We have also done a further longitudinal study.  We will have some more information for you.  I think really one has to look at what is the question, actually implementing the law as it is written.

Mr. DOGGETT.  I see my time has expired, Mr. Chairman, but I will have some questions if time permits for Mr. Kocot if we do a second round.

*Chairman Stark.  I thought I might take a little bit of a second round, and then you can have a second round, too.

Mr. Kocot, you have suggested that one of the reasons for low enrollment in Medicare Savings Programs is likely the--I think this is the quote--"the welfare stigma associated with Government programs.'' Do you recall that?  It is either in your testimony or you mentioned it to us yesterday.  Is that your assumption?

*Mr. Kocot.  Actually, that was specifically cited in a research report that we commissioned in the early 2000s.

*Chairman Stark.  I do not suppose that people associate Social Security with that kind of a stigma because we all pay into it.  Is that a fair assumption?

*Mr. Kocot.  I cannot speak for those beneficiaries, sir.  I think many of them, based on the research that we have seen, are skeptical of Government programs in general.  Any time anybody is talking about--

*Chairman Stark.  Those are just the Republicans, Mr. Kocot, and there are not many poor ones.

I would seriously question that people associate Social Security--Ms. Disman, do you think people associate your offices as welfare offices or an office which is going to provide them a payment to which they are entitled because they paid taxes?

*Ms. Disman.  I do not think they associate us with a welfare office.  As a matter of fact, I think the Kaiser Foundation said we were the third trusted source of Medicare beneficiaries.

*Chairman Stark.  There you go.  Given this stigma will attach to those applying for state assistance, why should we not just in an effort to increase enrollment ask the SSA offices to provide information on the program and to enroll the individuals there?  What would be wrong with that?  We would do away with that stigma, would we not?

*Mr. Kocot.  To the extent there is a stigma associated with Medicaid offices and you switch to Social Security, if there is no stigma, I suppose that might move it.

*Chairman Stark.  Maybe we can do that.  That is a great thought.  Each year, Ms. Disman, you mail out a COLA adjustment notice to Medicare beneficiaries.  You are going to include--you did include information this year on the LIS program, did you not?

*Ms. Disman.  Yes, we did, sir.

*Chairman Stark.  Could you not also include the MSP programs in the same mailing?

*Ms. Disman.  Sir, I would have to take a look at the letter.  I assume from what you are saying it is not included.  Let me take that back to the Agency.

*Chairman Stark.  Okay.  One other question.  You were kind enough in past testimony and at request to provide us with a lot of information about why people were turned down.

It was as near as I could tell missing in your written testimony this morning.  This would be those who fail and why do they fail, asset tests, incomplete application.

Do you have those figures currently and could you submit them to us?

*Ms. Disman.  I have the results where I think Acting Commissioner McMahon sent you a letter on what our 1,000 case study showed.  We do have a report that will be coming out shortly that is being done by our Office of Policy that will have more longitudinal kind of information.  Certainly, when it is available, sir, we would be delighted to share it.

*Chairman Stark.  When you say "shortly,'' will that be here in time to be included in the record of this hearing, do you suppose?  In the next week or so?

*Ms. Disman.  Let me just check, sir.

*Chairman Stark.  As I say, you have done it in the past and it was very helpful to us to know whether it was income limits or asset tests, what was the bigger barriers to approval.  That would be useful information.  I appreciate that.

[The insert follows:]

Mr. Doggett, would you like to inquire?

Mr. DOGGETT.  Yes, Mr. Chairman.  First, I would ask unanimous consent to include a copy of the Inspector General's report that I have referred to in the record.

*Chairman Stark.  Without objection.

[The information follows:]

Department of Health & Human Services Background Information on Identifying Beneficiaries Eligible for the Medicare Part D Low-Income Subsidy

 Mr. DOGGETT.  Mr. Kocot, referring you to that Inspector General's report again, it was sent to the Acting Administrator for whom I understand from your testimony you are a senior advisor, on November 17, 2006.  That is almost four and a half months ago.

If I understand your testimony, since that time, CMS has not recommended the legislation that the Inspector General recommended, correct?

*Mr. Kocot.  We have not.

Mr. DOGGETT.  In fact, until this week, you did not bother to even contact the Internal Revenue Service about it.

*Mr. Kocot.  I do not know if that is true or not, sir.

Mr. DOGGETT.  You are not aware of it in your role as a senior advisor to the Administrator?

*Mr. Kocot.  I am not aware of conversations we had, specific conversations we had with IRS on this specific topic, no.

Mr. DOGGETT.  The recommendation of the Inspector General said "Legislation is needed to allow CMS and SSA to more effectively identify beneficiaries who are potentially eligible for the subsidy The identification of these beneficiaries will allow for more efficient and effective targeting of outreach efforts. Access to IRS data would help CMS and SSA identify the beneficiaries most likely to be eligible for the subsidy. Specifically IRS earnings data would help identify individuals who meet the income threshold for eligibility.  This type of data sharing already occurs under the Medicare Secondary Payor program.''

Since getting that recommendation, as I understand your testimony, you do not have the level of enthusiasm for this recommendation that Ms. Disman voiced, but you do not think that it would be harmful to have that information.

*Mr. Kocot.  We are concerned about the privacy aspects of sharing this magnitude of data and this amount of data for the benefit that it will bring.  I think we have had these privacy concerns for some time now.

I believe in the letter sent back to you, Ms. Norwalk even expressed those privacy concerns.

Mr. DOGGETT.  You have been offered an opportunity to evaluate specific legislative ways of addressing and protecting those privacy concerns, but as late as 6:00 last night, on that and on the other provisions that are contained in the legislation that I presented today, you have declined to comment specifically on any of those provisions, have you not?

*Mr. Kocot.  I have not personally, sir.  With regard to the IRS--

Mr. DOGGETT.  You were involved in a phone call conversation--

*Mr. Kocot.  Yes, I was; last night.

Mr. DOGGETT.  Responding to my letter of about a year ago that occurred finally last night, and CMS declined to respond on any of the provisions of the bill.

*Mr. Kocot.  No, that is not accurate.  I was in that conversation.  We had a long discussion about the utility of using the IRS data, which my understanding--

Mr. DOGGETT.  CMS declined to discuss any of the other provisions.

*Mr. Kocot.  I think we said we were not prepared to discuss it.

Mr. DOGGETT.  Yes, sir.  You were not prepared almost a year after the legislation was introduced, after it was forwarded to you, after we had meetings, after we sent it to you in advance of the telephone conversation, and indeed, you are still not prepared to discuss the other aspects of the legislation this morning, as you have declined to do in your testimony.

*Mr. Kocot.  Are you answering my question?

Mr. DOGGETT.  No, sir.  I am asking you if that is not true, you have declined to do it in your testimony.

*Mr. Kocot.  That is not true.

Mr. DOGGETT.  You have not addressed any of the aspects other than in response to questions in that legislation.  In fact, your ten pages of testimony praising the Agency for its good work devotes two summary paragraphs of conclusions about your desire to work together in the future, but does not respond to any of the details of the legislation.

*Mr. Kocot.  As I began to say, we are not prepared yet to respond to your legislation.  One of the major points that you raised is expanding or doing away with or altering the asset test.  That has a cost associated with it.  We have gone to our actuaries and asked for an estimate of what that cost would be so we could further engage in a more meaningful discussion with you about this.

We have not received word back from them.  We are not trying to avoid your legislation or avoid you, sir.  We want to be prepared when we have a discussion on specific provisions.

Mr. DOGGETT.  You are still saying today, sir, that you have had great success in reaching the low income beneficiaries, and it is correct that you have near 100 percent on the dual eligibles who were automatically enrolled or facilitated enrollment for extra help, but with reference to the people who had to enroll themselves, you predicted that about 57 percent of them would enroll and only 36 percent of them enrolled.

It reminds me a little of the fellow who is standing with one foot on the embers and the other foot on a block of ice and thinks on the average things are just about right.

You have done fine where you had automatic enrollment, but for the other people, the record has been very modest.  This would be one thing if we were talking about matters that were not critical to the life saving prescriptions, pain reducing prescriptions, but frankly, I find the lack of responsiveness not only to me and the 140 some odd members of this Congress that asked you to respond to us, but to the Inspector General's recommendation, a Republican appointee, from November, to not get any more responsiveness than we have gotten, it does not surprise me there are over three million people that are poor people in this country that are not getting the benefits they need.

As Members of Congress, we cannot get a timely complete and thorough response, and only get indifference and delay, and what some might call deceit, it is no surprise that poor people are not getting treated fairly under this legislation.

I yield back.

*Mr. Kocot.  May I respond?

*Chairman Stark.  Please.

*Mr. Kocot.  I will point out, sir, that compared to other public programs, some programs have been around for more than 40 years, this program, even if you take away the dual eligibles, which I do not think is fair in terms of evaluating our treatment of this program and the LIS, frankly, 38.7 percent of those dual eligibles do switch plans.

We do have to track them.  We do have to keep them in the program.  We do have to make sure they are serviced the way they need to be, so we treat the LIS population as one population.  We do not segment them out the way you are.

Even if you do and you take between 40 and 60 percent of them are in, compared to Medicaid, the GAO has said that Medicaid right now is a 66 to 70 percent participation rate.  The SCHIP program, 44 to 51 percent.  Temporary assistance for needy families, 46 to 50.  SSI, 63 to 73 percent.  Head Start, 44 to 54 percent.  Food stamps, 46 to 48 percent.  Housing vouchers, 13 to 15 percent.

By any measure, in the second year of this program, sir, I think we are doing well.  We have a lot more to do.  There is no one debating that.  This is not CMS issue.  It is not an SSA issue.  It is not a Congressional issue.  This is an American--it should be an American priority to get these people in.

That is something that all of us have to do.  That is why we are reaching out to the communities.  That is why we are going very deep into the communities.  That is why we are going to minority organizations.

We have a lot more to do, admittedly.  We will continue to bang away at this.  It is not going to happen in the first year of a program.

*Chairman Stark.  Mr. Camp?

Mr. CAMP.  Thank you, Mr. Chairman.  I appreciate Mr. Doggett is very much an advocate for his legislation.  Frankly, we have not even been able to get CBO to respond with the costs.

I would urge you to work on CBO, and once we get the costs, I think it is something we certainly want to evaluate.  I think you are correct in you cannot go out front until we know what this is.  We have very tight budgets all the way around.  We have new PAYGO rules.

We all know the difficulties Medicare is in, particularly with the wave of baby boomers retiring that costs are spiraling up and up.  Obviously, we want to reach out to people who are entitled to the program.

I think frankly on Part D, the outreach has been commendable.  I want to thank so many of the workers in the Social Security Administration who were there at my town meetings, who met--as you said, Ms. Disman, you do meet one on one with individuals, and really helped facilitate that.

I think last year there were difficulties with the automatic enrollment, particularly on Part D.  Many of those have been corrected.  I am glad to hear in terms of the testimony that you feel much more confident about those who are having withholding in Social Security, that if they change plans, it will be handled in a much easier way.

We cannot just evaluate the efficacy of a proposal without also looking at its cost.  Once we get that, I hope we can have a meaningful discussion about it.

I appreciate the Chairman's time.  Thank you.

*Chairman Stark.  I wanted to just try this.  Mr. Kocot, I think I have heard you mention 15 times this morning in regard to MSP that you felt because it was a joint state/Federal program, there were certain things you could not do.  Is that a fair assumption?

We are going to hear shortly from a Ms. J. Ruth Kennedy, who is involved with the Louisiana Department of Health and Hospitals.  Have you read her testimony by any chance?

*Mr. Kocot.  I have not.

*Chairman Stark.  Let me just see if you would stipulate, and you can come back at me if I am really wrong, but Louisiana has done a bang up job of enrolling people, and from what I can gather, doing all the things right to get out there and get people enrolled in these programs.

What would be wrong with CMS requiring certain procedures in all states, so they could come up to the level of Louisiana?

*Mr. Kocot.  Any such requirement will have a cost to the states.  I am not ready to tell you whether or not that is a good idea because I do not know what that cost would be.

*Chairman Stark.  What if you paid for it?

*Mr. Kocot.  Again, I do not know what the costs would be.

*Chairman Stark.  What you are saying is there is a cost for providing health care to poor senior citizens beyond which you do not think it is right to go?  Is that what you just said?

*Mr. Kocot.  No, that is not what I said.

*Chairman Stark.  That is how I would interpret it.

*Mr. Kocot.  No.  What you are saying is--

*Chairman Stark.  Let me put it this way.  Is there any cost too great that would prevent us from seeing that poor senior citizens get proper medical care?

*Mr. Kocot.  I believe that senior citizens should get the appropriate care that they need and deserve.

*Chairman Stark.  Regardless of the cost?

*Mr. Kocot.  No.  Whether or not we can reach all these beneficiaries, it has a cost associated with it, we know there is a diminishing return and more expense associated with getting--

*Chairman Stark.  You are going to suggest to me that the only reason to not require the states to take certain steps is it might cost the states something; right?

*Mr. Kocot.  No.  I am talking about effectiveness.  If the states are not going to be as effective with more money, is it worth spending more money to have them have the same level of effectiveness, I think is the appropriate question.

We have determined that reaching these beneficiaries, there is a stigma with state Medicaid offices.  We have a lot to do on this.  Just throwing more money at the states is not necessarily going to get--

*Chairman Stark.  That is not what I said.  Requiring the states to follow certain procedures, which is certainly traditional, when they are getting assistance from the Federal Government, what would be wrong with that?

*Mr. Kocot.  I would have to see the procedures first before I could comment on what specifically you are referring to.

*Chairman Stark.  Let's say they are as good as Louisiana's.  Would you accept theirs?

*Mr. Kocot.  I would commend Louisiana for doing a good job, and again, I am not familiar with their program.  Whether other states have the wherewithal or whether they want to put the priority into this, that is really a state by state determination.

*Chairman Stark.  No, it is not.  There is nothing wrong with the Federal Government requiring the states to do certain things when they are in the best interest of seeing our programs succeed, and when we are paying the majority of the funds.  That is pretty traditional.

I would be glad to yield.  Go ahead.

Mr. DOGGETT.  Mr. Kocot, we have tried to work with CMS for a year.  We have written letters.  We have asked questions politely and not so politely at hearings.  We now are in a situation a year later where as you say, you have actuaries, but we still do not have a response on the details of provisions in this bill from CMS.

We are five months after an Inspector General made a recommendation.  We do not have really a response from CMS on that recommendation.

We have you testifying that you are satisfied that although CMS has enrolled, on those it self-enrolled, about 60 percent fewer people than you estimated you would enroll, that is good enough.

I think that demonstrates the problem that we have.  We welcome your further response on any of the details.  I am interested in a cost-effective system, as I said in my testimony.  I want it to be cost effective.  I know we have limitations here.

Having the input from the agency about cost effectiveness and about a targeted effectiveness to reach the people that need this help is critical.  We are talking about people that have died, that have suffered because they are not getting extra help.  They are not getting any help.

According to your own estimates, well over three million people.  I know we will never sign up every single one of them.  We can do a heck of a lot better job than has been done to date if we work together on it.

*Mr. Kocot.  May I respond?

Mr. DOGGETT.  Yes, sir.

*Mr. Kocot.  I agree with you.  Nowhere in my testimony will you see that we said we have done good enough.  Additionally, I want to also correct something for the record because we did send a letter back to you on February 12, 2007 where we addressed using the IRS data, and we told you that we had privacy concerns about it.  It is not as if we have not responded to that as well.

I do hope we can work together on this issue.  As I said, I think this is an American priority.  It is not just an agency priority.  This involves a lot of other people, a lot of outside groups beyond Government.  We all have to work together if we are going to achieve exactly what you are looking to do.

Mr. CAMP.  Mr. Chairman, would you yield?

*Chairman Stark.  Yes.

Mr. CAMP.  I just have one last question, and that is, Mr. Kocot, are there any other ways to enroll low income beneficiaries that you can suggest to us?

Are there any ideas that you might have?  If not, if I am putting you on the spot, please follow up in writing at some point.  If there are any other methods or ideas you have on how we might try to enroll low income beneficiaries, it would help the Committee a great deal to receive that information.

*Mr. Kocot.  We actually have contracted with an outside organization to look at that very question.  What I would like to do is pull some of our organizations who are closest to these beneficiaries to get their recommendations.  That is really what we are talking about, going to the people who are on the ground who are touching them on a day-to- day basis, who these beneficiaries trust.

They do not necessarily trust Government, those of us in Government.  We do not necessarily have the best solutions.

Let us go back and talk with our partner organizations and come back to you with some recommendations.

Mr. CAMP.  If there are any existing programs that you might highlight in that, I would be interested in hearing that as well.

*Mr. Kocot.  Will do.

*Chairman Stark.  Were you just referring, Mr. Kocot, to the RTI contract?

*Mr. Kocot.  Not specifically in answer to Mr. Camp's question.

*Chairman Stark.  There is an RTI contract out there?

*Mr. Kocot.  Yes, there is.

*Chairman Stark.  That was done in 1999, was it not?

*Mr. Kocot.  1999 or I think the results were in 2000.

*Chairman Stark.  When do you expect we will hear back on the results of that contract?

*Mr. Kocot.  I will have to get back to you.  I do not know what the status of it is.

*Chairman Stark.  It has been out there going on eight years.  It would be interesting to find out what you got for your money and if you would share it with us, we would appreciate it.

*Mr. Kocot.  I am familiar with some iterations of this, Mr. Chairman.  However, I do not know if there has been follow-up on contracts and so forth.

*Chairman Stark.  It was not Bechtel?

*Mr. Kocot.  I am sorry.  I did not hear you.

*Chairman Stark.  I said it was not Bechtel with whom you contracted for that report?

I want to thank the witnesses for your good humor and patience with us this morning, and we look forward to some results for helping poor people in the future.  Thank you very much.

I would like to now call the panel.  Ms. J. Ruth Kennedy, who I took the liberty of referring to earlier, who now is going to prove she has one of the best programs in the country.  She represents the State of Louisiana Department of Health and Hospitals in Baton Rouge.

Dr. N. Joyce Payne, a member of the AARP Board of Directors, Ms. Patricia Nemore, from the Center for Medicare Advocacy, and Ms. Emelia Santiago-Herrera, representing the Moore Consulting Group of Orlando, Florida.

Ms. Kennedy?

STATEMENT OF J. RUTH KENNEDY, MEDICAID DEPUTY DIRECTOR, LOUISIANA DEPARTMENT OF HEALTH AND HOSPITALS

*Ms. Kennedy.  Chairman Stark, Ranking Member Camp, and distinguished members of the Subcommittee on Health, good afternoon.  My name is Ruth Kennedy and I am an Medicaid Deputy Director for the Louisiana Department of Health and Hospitals.

I am responsible for Medicaid and SCHIP eligibility and enrollment for our state.  For the past seven years, we made a concerted effort to increase enrollment in our Medicare Savings Programs.  By any measure, we have been successful.

Now that MSP enrollees are automatically eligible for Extra Help with the Medicare prescription drug plan, these benefits are greater than ever.

Since January of 2000, enrollment in the Medicare Savings Programs in Louisiana has increased by about 43,000 people, and for us, that represents a 44 percent increase.

I want to thank the Committee for the invitation to highlight some of the strategies that have led to those enrollment increases.

Increased enrollment in Louisiana is a result of three things: Simplifying the application process, focusing on retention once someone has enrolled, and third, aggressive outreach. Outreach alone is of limited usefulness, we believe, without changes in the application and renewal process.

For us, improving retention rates was essential, since many people were having their MSP cases closed at renewal solely because they did not return the paperwork.  We now conduct ex parte reviews.  We use other systems to verify income and resources, and workers can now complete that annual review by phone without getting a signed application form.

Beginning in July, we intend to begin using the method that Social Security used in 2006 to conduct low income subsidy renewals for our MSP renewals.  We are going to mail a letter and request that enrollees contact us only if our information is incorrect or their situation has changed.

This is because our administrative data shows that our MSP cases are almost never closed at renewal because of an increase in income or resources.

Keeping eligible people enrolled or plugging the holes in the bucket is important, not only to increase our participation, but to prevent what we believe is undue hardship.

Someone who is closed at renewal is often not even aware of it until several months later, when the direct deposit of their Social Security check is about $280 less than they expected it would be.  That is because the back premiums that they owe are automatically deducted.  Then we get the calls.

Outreach is important because many people are unable to navigate even our kinder and gentler bureaucracy.

Our Medicaid employees throughout the state, in our 45 eligibility offices, have been the backbone of our grassroots efforts to increase enrollment.  They live in these communities, in towns where they conduct outreach, and they are creative, imaginative, and passionate about what they are doing.

They believe that it is important and deserving of their time and effort, and they manage their regular eligibility caseload in addition to outreach.

We forged hundreds of partnerships in Louisiana with community organizations, medical providers, social service agencies, SHIP, and our local Social Security offices.  These MSP partners have made a major contribution to our success as well.

Our outreach model is relatively low cost, but without some funding for outreach, we could not have achieved the increases in enrollment.

In 2002, we applied for and received a multi-year grant from the Robert Wood Johnson Foundation.  We have also received through that grant valuable ongoing technical assistance from the Center for State Health Policy at Rutgers University.

While our administrative costs have been relatively modest, as you can imagine, we have seen a large increase in the monthly bill for our share of Part B premiums, a 44 percent increase in enrollment translate to a 44 percent increase in our share on the payments.

More eligible getting help with MSP translates to more eligible Louisianans enrolled in and getting Extra Help with the Medicare prescription drug plan, and we think that is a good thing.

Yet, we know for all our success, many eligible people still do not realize that help through the Medicare Savings Programs is available, or if they do, their perception is that the application process is simply too onerous for them to try to navigate.

We believe we have changed the reality, so now we continue to work to change their perception so they can get this very important benefit.

Again, I want to thank you for the opportunity to share  our experience, and I would be happy to answer any questions.

[The prepared statement of J. Ruth Kennedy follows:]

*Chairman Stark.  Thank you very much.

Dr. Payne?

STATEMENT OF N. JOYCE PAYNE, ED.D. MEMBER,

AARP BOARD OF DIRECTORS

*Ms. Payne.  Chairman Stark and Congressman Camp, I am Joyce Payne of AARP's Board of Directors.  Thank you for inviting us to testify on the need to improve Part D low income subsidy and other Medicare programs for people with limited incomes.

The "extra help" that 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.  However, the LIS program has a serious flaw, an asset test.

No one with even one dollar more than $11,710 in savings or a couple 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 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 MSPS, that help pay for 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 programs are automatically eligible for and enrolled in the 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 altogether. Thus, many who are eligible for the LIS under their states. MSP rules are being improperly rejected because SSA only looks at LIS criteria.

AARP believes there should be no asset test in Medicare.  As a matter of public policy, we should encourage people to save for retirement, and to not penalize them for those savings.

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 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 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 they already have 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, into law this year, and eventually completely eliminate the asset test for both LIS and MSP.

We look forward to working with you.  We look forward to working on both sides of the House.  We ensure that we will continue to work to serve those populations that are most vulnerable in America today.

We thank you for this opportunity.

[The prepared statement of N. Joyce Payne follows:]

*Chairman Stark.  Thank you, Doctor.  Ms. Nemore?

STATEMENT OF PATRICIA NEMORE, CENTER FOR MEDICARE ADVOCACY

*Ms. Nemore.  Good morning, Mr. Chairman, Mr. Camp, and Mr. Doggett.  Thank you so much for this opportunity to testify.

I am Patricia Nemore from the Center for Medicare Advocacy.  In our work, we are in contact daily with thousands of beneficiaries and advocates around the country, and we are aware of how important these programs are, which mean the difference, and we know this from the literature and we know this from our experience, they mean the difference for people with LIS between going to the doctor or not for people with an MSP benefit, and they mean the difference between getting your prescription drug or walking out of the pharmacy without it because the co-pay for your single drug is $500.  These are very, very important programs.

I want to focus on a particular aspect of this, but before I do, I just wanted to highlight your comments at the beginning, Mr. Stark, about the importance of the Medicaid program for low income Medicare beneficiaries.  This is truly the place where the most low income beneficiaries get the other health care they need that is not covered by the Medicare program.  While we have a lot of work to do with MSP and LIS, we need to remember what an important part of the whole protection for low income Medicare beneficiaries the Medicaid program is. 

I want to just quickly tell two stories that I think illustrate some points that have been made this morning with respect to MSP and LIS.

My husband recently turned 65 and he had retired earlier, was receiving Social Security, and he received his Medicare card.  With his Medicare card, he got something or other that said if you do not want Part B, let us know, and we will not take the premiums out of your Social Security check.

In contrast, if you are a low income disabled person with emphysema in the State of New York, for example, because New York's programs are not quite as enlightened as some other states, and you got the same thing my husband got. You would look at the premium and say, wow, that Part B premium is kind of expensive, I only have $800 a month income.

I wonder if there is any way that I do not have to pay that, you would look through your Medicare and You Handbook and find references to three or four different pages which would finally tell you to call 1-800-MEDICARE, which would tell you to call your state agency, which would tell you to call your local Social Services office, which would have not a single word on any of its voice menu's about this program, so you would not really know what to do.

If you found an office near you, you would go to that office, wait for several hours, talk to someone who might not know of the existence of the program because we know that Medicare savings programs are not known, not only to beneficiaries, but not known to a lot of agency people.

When you finally found someone who did know it, they would tell you that you needed documents to prove your income and your residence and your assets, and if you did not have those documents, you would have to go home and find them and find a way to copy them and mail them back.

If you did not mail them back, you would be terminated because you had not completed the process.

For our middle class, better off Medicare beneficiaries, we have a process of enrollment that is streamlined and easy.  For our sick, frail, less well educated, isolated, often not English speaking beneficiaries, we have a process that is incredibly difficult.

I would urge this Committee and the Congress and the administration to think about ways that we can seek parity in our process, so that low income people do not bear the brunt to get the benefits that they need, that they are not bearing the heavier burden than higher income people do.

One of the things that we have heard about today is that Social Security does have some way of identifying low income beneficiaries.  Mr. Doggett's legislation would target that better and make it more focused.

We know that Social Security sends letters to potentially eligible beneficiaries.  What we do not know is what the states do with the data about potentially eligible beneficiaries.  The states are given those data.  We know there is a little bump in enrollment when people get those letters from Social Security, which come once a year. We also know that if the states were doing something with it, there might be a greater bump in enrollment, and we have no information that I am aware of as to how the states use those data.

We have heard the administration talk about sharing data with the states from the LIS applications.  We have no knowledge about how or if states would use those data.

Louisiana has made a concerted effort to improve its program.  It is not necessarily in the interest of states to increase their enrollments because it does cost them more money.  If we really care about getting beneficiaries into these programs, we need to make them not bear the brunt of going through these very, very complex processes.

Mr. Chairman, my written testimony has many recommendations or suggestions for policy options, and I am happy to answer questions or work with the Committee further.

Thank you very much.

[The prepared statement of Patricia Nemore follows:]

*Chairman Stark.  Patricia, thank you, and thank you for the help you have provided to the Members of the Committee, for advising us and enlightening us both today and previously.

Ms. Emelia Herrera?  Did I pronounce that right?

*Ms. Santiago-Herrera.  Santiago-Herrera.

*Chairman Stark.  Welcome to the Committee.  You have come a long way.  Why not just tell us what you would like to tell us in any way you would like?

STATEMENT OF EMELIA SANTIAGO-HERRERA, MOORE

CONSULTING GROUP, ORLANDO, FLORIDA

*Ms. Santiago-Herrera.  First, I would like to thank you, Chairman Stark, and the Ranking Member, Mr. Camp, and Subcommittee members.

My name is Emelia Santiago-Herrera.  I am from Orlando, Florida.  I am 81 years old, and I have eight grown children and 54 great grand's and 54 great great grand's.

I have had five heart attacks and three strokes.  I have a lot of health problems and I need assistance.  I am a low income Medicare beneficiary and receive low income benefits.  I am enrolled in Medicare Advantage with prescription drug coverage and receive the full Part D low income subsidy.

I received information from a neighbor of mine about Evercare, although I did have the Medicare and You Handbook, reading it myself, but there were so many things in there that I could not decide which would be beneficial to me.

She said go with Evercare.  I called Evercare.  They sent two people out to the house to talk to me.  I decided to enroll with them, which I have not regretted.  I depend on them and I appreciate everything they are doing for me.

They also have me with a disease management program and their nutrition program assistance.  They also send someone to my house twice a week to help me clean and do errands for me because I have no transportation.

They also give me advice on my diet, which I developed diabetes in the last year.  I also was told that I needed diabetic shoes, which cost $50 an inch, which I could never afford.

Evercare got me the shoes for nothing.  They also help me with a doctor who comes out to my house and does my nails because I cannot go to a regular foot doctor.

Someone from Evercare also comes to my house and sees if I am being treated right, at least every three months.  They ask me questions about the attitude, disposition and personality of the person who comes to see me.

Since I am low income, all of the services I receive are a blessing.  I used to have to pay my doctor a co-payment and I used to have to pay so much on certain types of medication that were not over the counter, which I cannot afford.

I want to thank you all for letting me come here today and try to explain some of the advantages that Evercare has given to me, and I hope they can continue in the future.

[The prepared statement of Emelia Santiago-Herrera follows:]

*Chairman Stark.  Thank you very much.  I will start the inquiry here.  We may get called away again for about 15 minutes if a vote comes up.  I hope some of you will be able to stay, if all of the members do not have a chance to inquire.

Ms. Kennedy, I am not sure I completely understand the Louisiana Charity Hospital setup, but it has been suggested that in some states, the governors are not too keen about enrolling more people in these plans because it costs the state something to enroll them.

That certainly would not be any of the governors you and I know, because they are all kind-hearted folks.

In Louisiana, would they not, if they were not in the MSP program, for instance, would they not become eligible for the Charity Hospital program in Louisiana?  In a sense, if you get them into MSP, the state might save a little because the Federal Government would pay part of that and it would not have to be entirely born by the Charity Hospital, or is that not a correct understanding of your state program?

*Ms. Kennedy.  Chairman Stark, the major benefit of the Medicare savings program is that we pay the Medicare Part B premium, which in 2000, January of 2000, was $45.50.  Now, it is $93.50.

Whether or not someone gets their health care at one of the safety net hospitals in Louisiana, their Medicare premium for Part B coverage is $93.50.

*Chairman Stark.  You mentioned all the things you do, and I am impressed by the increase that you have had.  Do you have any idea to help us?  We have heard today people say they do not want to impose costs on states.

Let's suppose that we said to Mississippi, you have to do what Louisiana does, maybe they do, but let's just assume they do not have as good a program as you do, what would you guess it would cost the State of Mississippi just to increase their efforts to enroll MSP people at the level you do?

Any idea how much we are talking about?

*Ms. Kennedy.  I think as an indicator, I could use the amount of the Robert Wood Johnson Foundation grant, which was $140,000 annually for three years, and then we got an extension because of Katrina and the issues with enrollment.  The Robert Wood Johnson Foundation gave us an additional year.

We were able to get Federal matching funds which parlayed that $140,000 into $280,000.  Also, that technical assistance from the Rutgers Center for Health Policy, that kind of technical assistance is helpful for states.

I might add, Chairman Stark, that a model that could be used perhaps is the 1999 Ticket to Work legislation, set aside money for states for administration, Medicaid infrastructure grants they are called.  They are not mandatory.  States can voluntarily apply for those grants and get help for outreach, coalition building, to improve enrollment in that program and the optional Medicare for Working People with Disabilities program.

I know those grants vary from $500,000 annually to $1 million.  These are administrative grants with no state match requirement.  Those are, I think, are an incentive for states.

*Chairman Stark.  Give me an idea, let's say, in round figures, you have been spending $280,000, maybe $300,000 a year, about how many people have you enrolled as a result, would you guess, of that kind of revenue, with that kind of expenditure?

*Ms. Kennedy.  Of the 44,000--the annual mailing, even before we got the grant in 2002, we had used the Social Security leads file, but that identifies everyone who is a Social Security beneficiary.  It is just as the name implies, a leads file, because it does not contain information about assets, about a spouse's income, or other income other than Social Security.

There was a mailing in 2002 by Social Security that had state specific information, the number in Louisiana to call, and we got a surge there.

I think the estimate by the GAO was that there was a .9 percent increase as a result of that mailing in Louisiana.

*Chairman Stark.  I am just trying to figure out with this $300,000 that you used, about how many numbers of people do you think you signed up as a result of spending that money?  Can you make a guess?

*Ms. Kennedy.  40,000 over seven years.

*Chairman Stark.  6,000 people a year.

*Ms. Kennedy.  About 5,000 a year, as a result of outreach and improvements in our system.

*Chairman Stark.  For $60 a head, you got people signed up.

*Ms. Kennedy.  It would seem.

*Chairman Stark.  That is pretty good, is it not?

*Ms. Kennedy.  Yes, sir.

*Chairman Stark.  I wonder why the Federal Government thinks that would be so horribly expensive.  It does not sound as expensive as fixing Katrina, does it?

Dr. Payne, I just want to commend you and your organization for pitching in here to help us.  I have a suspicion that many of the people that will be helped if we follow your suggestions are not members of AARP.  They probably do not have enough money left over to take advantage of all the wonderful discounts you offer the members in a variety of areas that your members can participate in.

I do appreciate your outreach and your assistance and your suggestions.  I want to thank you for that.

Mr. Doggett, would you like to inquire?

Mr. DOGGETT.  Yes.  Thank you very much, Mr. Chairman.  Ms. Kennedy, I do thank you for your leadership and that of your agency.  I would hope that the Center for Medicare and Medicaid Services could take some lessons from your success and commitment there in Louisiana.

Ms. Santiago, I am particularly pleased that you are here today because you are what this is all about.  You had the good fortune to be automatically enrolled in this program.  You did not have to go through a lot of hoops to get in it.

I believe that there are tens of thousands of seniors that are out there just like you that need help with their feet, that have heart medications, that have other needs, many of them probably some of your friends, that are not even able to come up to Washington as you have been able to do.

The reason that I am expressing such outrage this morning about the indifference and the delay from the Centers for Medicare and Medicaid Services is I am worried about those people, that they are not getting any of the kind of help you are getting.

When you come here today, you really demonstrate why we need to act and why we need to force a bureaucracy that has been indifferent and has delayed to get its job done, and that is what we are trying to do.

Ms. Nemore, you have focused attention on some of the practicalities of what happens when people go to apply for benefits.  One of the areas that I know you and Dr. Payne support and your organizations support is what I propose to do with reference to sharing Internal Revenue Service data, but that is only one part of the bill.

Talk to our Committee a little bit about the application process itself, and some of the things in the current asset test as mandated by law, that we are trying to change, and how they make it more difficult for a person like Ms. Herrera who might want to apply and are not automatically enrolled, to get the benefits that she got.

*Ms. Nemore.  Yes.  Mr. Doggett, I can speak to several very particular things in the application that we believe could be changed administratively, and then I would like to talk also to your comment that Ms. Santiago-Herrera was automatically enrolled.

There are several things on the application.  One, there was some conversation with the administration earlier about where you get help from your family, what is referred to as in-kind support and maintenance.

The questions on that in the application are confusing, and we understand from advocates in the field that people often do not understand exactly what is being asked in that question, and they give incorrect--they give information that is not really what is being asked, and that can disqualify them.

We believe that could be eliminated administratively because while the Social Security Administration and CMS are linked into the Supplemental Security Income program's rules, they have deviated from those rules already, and they have deviated in ways that are helpful.

Mr. DOGGETT.  Has your Center asked them to do that administratively?

*Ms. Nemore.  Yes, we have.

Mr. DOGGETT.  How long ago was that request?

*Ms. Nemore.  We and many other advocacy organizations have made those comments at every opportunity, before--

Mr. DOGGETT.  Going back to 2003?

*Ms. Nemore.  Yes, before the law went into effect.

Mr. DOGGETT.  CMS has declined to do that so far administratively?

*Ms. Nemore.  That is correct.  That pertains to counting income, how you count income.  Another piece that is commonly referred to that pertains to how you count assets is a question about life insurance.

Life insurance is again a confusing question because life insurance is allowed if the face value of your policy is under $1,500, but if it is over that, then you have to report the cash surrender value.  These are terms, when I was briefing your staffs earlier this week, we realized that even among--

Mr. DOGGETT.  Experts.

*Ms. Nemore.  People who work on this all the time, that is very confusing terminology, and the amount has been $1,500 since the beginning of time, and has never ever been indexed at all.

Both the lack of indexing of that amount and the confusion of having to report it, we think are obstacles on the application.

Mr. DOGGETT.  You might have a senior who bought a life insurance policy early in their life, a small policy, and by this time, that insurance company may have changed hands three or four different times.  They have misplaced the policy.  They hoped it would be there to cover their burial expenses or help their family at the end of their life, and they are confused about that, and finding all that is an obstacle to them getting these benefits.

*Ms. Nemore.  Those are the kinds of things that make it hard for people, and they end up  having their application disapproved because they were not able to find it or to provide the documentation.  We know that is a factor.

There is another thing, the question that you have in your legislation to get data from IRS, we believe it may be possible for Social Security to get those data if they had the permission of the beneficiary, and they could perhaps put a check off box on their application that would say I agree to have SSA check IRS data and send it to my state.

Finally, SSA has done something that many states have not done, and it is beneficial.  They allow people to certify the truth of the contents of their application.  We would be much better off if more states would adopt that.  Unfortunately, SSA has used language that is quite intimidating by including a reference to crime and going to prison for giving mis-information.

The reference to the crime is in the context of fraud.  It is intimidating language, and I think people may fear that if they just made a mistake or they forgot to report something that they could go to prison. We believe that is a barrier.

I would just like to quickly go back to this issue getting automatically enrolled.  I think it is an important one both administratively and legislatively for us to look at.

 According to CHS's numbers from June 2006, eighty percent of the people getting the low income subsidy are automatically enrolled.  Eighty percent of the people getting the low income subsidy are automatically enrolled.  That is how we get people into programs, by not making it difficult for them.

If we could have, as other people testifying have suggested, a sort of cross deeming, meaning if you are in this program, you are deemed eligible for this program, we do that for MSP.  If you are in MSP, you are deemed into the low income subsidy.

If we could align the programs closely enough so you could do that both ways, then if I went to Social Security to sign up, I would get both programs.  If I went to my state agency to sign up, I would get both programs.  That would be a big step towards improving the enrollment in both programs.

Mr. DOGGETT.  Thanks to all four of you for your statements.

*Chairman Stark.  Mr. Camp?

Mr. CAMP.  Thank you.  Thank all four of you for being here.  Thank you for your testimony.

Ms. Kennedy, my first question was going to be after sort of reviewing your testimony and looking at the things Louisiana has done and this flexibility is available to all states, why have not other states done what Louisiana has done, and then I saw you did receive a grant from a Foundation, and also the matching funds.

What about states who do not have these resources?  Do you think that is a big barrier to not adopting some of the flexibility and changes that Louisiana did?

*Ms. Kennedy.  I cannot speak for them.  I think it would be a factor.

Mr. CAMP.  Would Louisiana have been able to proceed with those reforms without the Foundation and matching dollars?

*Ms. Kennedy.  No.

Mr. CAMP.  Dr. Payne, if we expand the number of people

--first of all, if you look at the MSP programs, between 13 and 30 percent of the eligible low income beneficiaries are actually signed up.  It is not a high enough number.

What I heard in your testimony was let's expand the number of people eligible for those programs.  Should we not focus on the currently eligible people and try to get more of them enrolled before we expand the program?

*Ms. Payne.  No.  We feel that there are a large number of people who need these benefits, desperately need these benefits, and we ought to do everything we possibly can to bring in those vulnerable populations.

Mr. CAMP.  Absolutely.

*Ms. Payne.  There are some administrative efficiencies that can be employed to improve the program, but we certainly think that we need to remove all of the barriers to enrollment in Part D, especially for low income communities.

Mr. CAMP.  Yes.  That is not suggesting an expansion of the program, but that is trying to get those who are currently eligible enrolled, which Part D has done a much better job of than MSP.  Would you agree?

*Ms. Payne.  Yes, I would agree with that.  I think several have mentioned the integration of programs.  We think if one is eligible for LIS, then certainly they ought to be eligible for MSP and vice versa.  I think there needs to be more integration of the programs.

Mr. CAMP.  Ms. Santiago-Herrera, if you were to lose access to your current plan and had to go back to the plan that you had before, what would that mean?

*Ms. Santiago-Herrera.  I would have to go into a nursing home because there would no one to come to see about my feet or no one to come to help me clean the house or take a bath, and there would be no food for me, because I am a diabetic.  I became a diabetic a year ago.

When they sent me the handbook to choose from, I did not know what to choose from because the book is very confusing, believe me, when I tell you.  I just did not know.

My neighbor came over and she was telling me about Evercare.  I said, well, I do not know, it is too much for me.  I just put the book aside.  The next day I called Evercare, and they sent a man and his wife out to my house, and they sat down and went through the whole thing to make me understand it.

Also, I forgot to mention, they give me ten trips a year to my doctor, back and forth.  They would wait for me and bring me back.  I have had the five heart attacks and the three strokes.

Mr. CAMP.  Thank you.

*Ms. Santiago-Herrera.  I could not exist without them, sir.

Mr. CAMP.  You were not automatically enrolled then, you signed up yourself?

*Ms. Santiago-Herrera.  No, I signed up.

Mr. CAMP.  At the suggestion of a friend.

*Ms. Santiago-Herrera.  Yes.

Mr. CAMP.  Thank you.  Thank you all.  Thank you, Ms. Nemore, for coming to the previous briefing and helping us understand these issues.  I appreciate all of your testimony.  Thank you very much.

Thank you, Mr. Chairman.

*Ms. Santiago-Herrera.  Thank you, Mr. Chairman.

*Chairman Stark.  Mr. Doggett?

Mr. DOGGETT.  If I could direct a query to Dr. Payne and Ms. Nemore really on this same point that Mr. Camp raised, because it is a critical issue for you to comment on.

We see so many people that are not covered now, who are eligible, according to Social Security and Medicare, over three million people.

Comment, if you will, on the observation, and it appears to have some good reason behind it, that if you have three million people that are not covered, why should we raise the asset test or adjust it in order to expand that number?

What is the rationale behind doing that?  You did that to some extent, Dr. Payne, but I know you have not inquired on it.  I believe the people we are talking about expanding it, you would like to see it expanded much more than my bill, but the group we are expanding it to slightly in this bill are not rich people.  They are people of fairly modest income.

If you would just close focusing on that question that I am so pleased Mr. Camp raised.

*Ms. Nemore.  Thank you, Mr. Doggett.  I think if we look at the rules for the low-income subsidy and the way it has been administered both by how Congress described it and how SSA has done it, and the Medicare savings programs, what I see is that Congress has grown in its understanding over the last 20 years about the needs of low income beneficiaries.

We started in 1988 with 100 percent of poverty, and by the time we got to Medicare Part D, we recognized that people needing full benefits need to be at 135 percent of poverty.  It took us 20 years--it took us until 1997 to get to that level for the Medicare Savings Programs.

We also recognized in Part D what had not been recognized before, that you have to index the asset test.  The asset test for the Medicare Savings Program is frozen at a number that was chosen in 1988 based on an existing number in the SSI program that had never been indexed.

If we expanded the MSP programs so they were aligned with LIS and increased the assets so those were aligned, we would then be in a position where either program would be a way to get into the other program.

What your legislation does is recognize that there are a lot of people who have very low incomes who have just a little more assets than we allow, and that it is important to reach those people to get that asset test at least higher.

As you know, we along with AARP and other groups, support the elimination of that test because the very existence of it can be a barrier to enrollment.

Increasing it  we know will bring some more people in who are very low income people.

*Ms. Payne.  Mr. Doggett, I will simply make two points.  We think it is incredibly reasonable to simplify the process, streamline the application, remove the asset test, to reach out to those low income communities, as I said earlier, that need these services so desperately, and to look at better alignment between the programs.

We think it is incredibly simple to identify those individuals.  Social Security is already making that information available or IRS is making the information available to Social Security.  They are using it for Part D premiums.

Why can we not use the same process for identifying poor people?  We think again that it is a reasonable step.  Your bill opens the door for all kinds of opportunities for those that are most vulnerable, and there are some very simple techniques that we can use.

Social Security has been very good at protecting privacy.  We think they can play a much greater role in ensuring a process, a simple process, for identifying those who need these services.

Mr. DOGGETT.  Thank you very much for all you have contributed this morning and what you are doing in your individual professional capacities, and thank you, Mr. Chairman, for focusing attention on this major problem.

*Chairman Stark.  Thank you, Mr. Doggett, for your efforts.  I want to thank all the witnesses for being here with us today.

Ms. Santiago-Herrera, is this your first trip to Washington?

*Ms. Santiago-Herrera.  Yes, sir.

*Chairman Stark.  Pretty exciting, is it not?

*Ms. Santiago-Herrera.  Yes, sir.

*Chairman Stark.  Are you going to do some sightseeing?

*Ms. Santiago-Herrera.  Yes.

*Chairman Stark.  Nice of you to be here.

This meeting is adjourned.

[Whereupon, at 1:32 p.m., the hearing was adjourned.]

[Questions for the Record follow:]

[The insert follows:]

[Submissions for the Record follow:]

National Council on Aging, statement
Senior Citizens League, statement