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House Medicare Bills Would Better Protect Low-Income Beneficiaries

The House will soon consider legislation to use prescription drug savings to reduce health costs for low-income Medicare beneficiaries and improve Medicare benefits overall. As this legislation moves forward, it’s important that Congress retain these low-income protections. Senate drug legislation, in contrast, would provide little or no additional assistance to these needy seniors and people with disabilities.

Bills reported by House committees would improve two programs that help low-income Medicare beneficiaries with their health care costs: the low-income subsidy, which helps with premiums and cost-sharing for Medicare’s prescription drug benefit (Part D), and the Medicare Savings Programs, which provide premium and cost-sharing assistance for hospital and physician coverage (Parts A and B) to beneficiaries who aren’t eligible for full Medicaid.

Low-income Medicare beneficiaries spend much more of their incomes on health care than those with higher incomes, a new Kaiser Family Foundation study shows. The median traditional Medicare beneficiary with income below $40,000 devotes 15 to 18 percent of income to out-of-pocket health costs, including premiums, compared to 7 percent for those with incomes of $40,000 or more.

Many low-income seniors and people with disabilities struggle to pay their health bills. Almost 9 percent of near-poor seniors (with incomes between 100 and 200 percent of poverty) and 7.6 percent of poor seniors who are prescribed a medication don’t take it as prescribed to save money — compared to just 3.3 percent of seniors with higher incomes. They skip doses, take less medicine, or delay filling a prescription.

The House legislation’s improvements to Medicare’s low-income drug subsidy include:

  • Eliminating co-payments for generic drugs for low-income subsidy beneficiaries;
  • Raising the income eligibility threshold from 150 to 200 percent of poverty;
  • Eliminating the asset test for determining eligibility;
  • Extending eligibility to residents of Puerto Rico and other territories; and
  • Automatically enrolling those turning 65 who have been enrolled in Medicaid.

Medicare Savings Program improvements include:

  • Raising the income eligibility threshold to 200 percent of poverty;
  • Providing full federal funding to cover the costs of raising the threshold;
  • Simplifying enrollment procedures; and
  • Providing additional funding to states for outreach and enrollment efforts.

These changes would be important steps towards making prescription drugs and other health care more affordable for low-income Medicare beneficiaries. As the House and Senate advance legislation to reduce drug costs, they shouldn’t forget low-income seniors and people with disabilities.