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Medicare: More Than 600,000 Medicare Prescription Drug Benefit Beneficiaries Must Apply for Low-Income Subsidy for 2007

Source: Kaiser Daily Health Policy Report Issued Friday October 20, 2006

More than 600,000 low-income Medicare beneficiaries who were automatically enrolled in the Medicare prescription drug benefit and received a subsidy toward premium costs this year will have to apply to receive the subsidy for 2007 because their eligibility status has changed, CMS (Centers for Medicare and Medicaid Services) officials said on [October 19 according to] the Washington Post.

The beneficiaries will not lose Medicare prescription drug coverage and will not have to apply on their own for Medicare drug plans, unless they wish to change plans. For the 2006 plan year, the government automatically enrolled about 7.2 million beneficiaries, including dual eligibles - beneficiaries enrolled in both Medicare and Medicaid - and beneficiaries of two other federal assistance programs into Medicare drug plans and the subsidy program.

According to CMS, some of the beneficiaries who were automatically enrolled in the subsidy last year are no longer enrolled in Medicaid or the other federal assistance programs and therefore will not automatically qualify for the subsidy. The subsidy, which allows beneficiaries to enroll in plans with low or no premiums, is available to beneficiaries with annual individual incomes at or below 150 percent of the federal poverty level and assets of no more than $11,500 for individuals and $23,000 for married couples. The more than 600,000 beneficiaries who will not be automatically enrolled in the subsidy for the 2007 plan year must apply for it on their own, CMS said. If the beneficiaries take no action, they will remain enrolled in their current Medicare drug plans but will have to pay more toward their premiums because they will no longer be receiving the subsidy, the Post reports.

Concerns
Some advocates are concerned that the affected beneficiaries might not understand a letter sent by CMS explaining the change. The advocates also are concerned that beneficiaries who are aware of the change will have problems completing the six-page application for the subsidy, the Post reports.

Marisa Scala-Foley, associate director of the Access to Benefits Coalition at the National Council on Aging, said, "Just sending these folks a letter and an application doesn't mean they necessarily are going to apply for the extra help even though they may need it," adding, "These are still likely to be low income folks who need all the help they can get. ... These folks are going to need a lot of hand-holding." Kathleen Harrington, director of external affairs at CMS, said, "We're very concerned about this," adding, "We want to ensure that they know and that they've been contacted by plans, by us, by advocates, by community resources to make sure that they apply for this low-income subsidy, so if they have a premium liability they can minimize it."

CMS has informed insurers who sponsor Medicare drug plans and community organizations of the change and encouraged greater outreach to the affected beneficiaries. In addition, the agency will allow the affected beneficiaries to switch to lower premium plans for an extra three months beyond the open enrollment period, which runs from November 15 through December 31, 2006, Harrington said. "The worst outcome will be someone getting surprised that they have a premium and then dropping their coverage," Harrington said, adding, "We want to do everything we can to keep them in coverage" (Lee, Washington Post, 10/20). [Source: http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=40569 ]