U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Publishing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

89–561 2016

MEDICARE PROGRAMS FOR LOW-INCOME 

BENEFICIARIES 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HEALTH 

OF THE

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

FIRST SESSION 

MAY 3, 2007

Serial No. 110–36 

Printed for the use of the Committee on Ways and Means 

( 


joloto on DSKB35BYQ1 with HEARING
ii 

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 


joloto on DSKB35BYQ1 with HEARING
iii 

C O N T E N T S 

Page 

Advisory of May 3, 2007, announcing the hearing ............................................... 2 

WITNESSES 

The Honorable Lloyd Doggett, a Representative in Congress from the State 

of Texas ................................................................................................................. 14 

The Honorable Jason Altmire, a Representative in Congress from the State 

of Pennsylvania .................................................................................................... 16 

S. Lawrence Kocot, Senior Advisor to the Administrator, Centers for Medicare 

and Medicaid Services ......................................................................................... 34 

Beatrice Disman, Regional Commissioner, New York Region, Social Security 

Administration ..................................................................................................... 28 

J. Ruth Kennedy, Medicaid Deputy Director, Louisiana Department of Health 

and Hospitals, Baton Rouge, Louisiana ............................................................. 74 

N. Joyce Payne, Ed.D, Member, AARP Board of Directors .................................. 78 

Patricia Nemore, Center for Medicare Advocacy .................................................. 89 

Emelia Santiago Herrera, Moore Consulting Group, Inc., Orlando, Florida ...... 101 

SUBMISSIONS FOR THE RECORD 

National Council on Aging, statement ................................................................... 110 

Senior Citizens League, statement ......................................................................... 116 


joloto on DSKB35BYQ1 with HEARING

joloto on DSKB35BYQ1 with HEARING
(1) 

MEDICARE PROGRAMS FOR LOW-INCOME 

BENEFICIARIES 

THURSDAY, MAY 3, 2007 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON WAYS AND MEANS, 

SUBCOMMITTEE ON HEALTH, 

Washington, DC. 

The Subcommittee met, pursuant to notice, at 10:04 a.m., in 

room 1100, Longworth House Office Building, the Honorable 

Fortney Pete Stark (Chairman of the Subcommittee) presiding. 

[The advisory announcing the hearing follows:] 


joloto on DSKB35BYQ1 with HEARING
2 

ADVISORY 

FROM THE COMMITTEE ON WAYS AND MEANS 

SUBCOMMITTEE ON HEALTH 

FOR IMMEDIATE RELEASE CONTACT: (202) 225–3943 

May 03, 2007 

HL–9 

Chairman Stark Announces a Hearing on 

Medicare Programs for Low-Income Beneficiaries 

House Ways and Means Health Subcommittee Chairman Pete Stark (D–CA) announced today that the Subcommittee on Health will hold a hearing on financial assistance programs for low-income Medicare beneficiaries. The hearing will take 

place at 10:00 a.m. on Thursday, May 3, 2007, in Room 1100, Longworth 

House Office Building. 

In view of the limited time available to hear witnesses, oral testimony at this 

hearing will be from the invited witness only. However, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing. 

BACKGROUND: 

While Medicare provides universal coverage for senior citizens and people with 

disabilities, it can require significant out-of-pocket spending. Congress recognized 

the need to help low-income beneficiaries with Medicare costs through the creation 

of the Medicare Savings Programs (MSP), which help cover premium and cost-sharing charges. Individually, these programs are the Qualified Medicare Beneficiary 

Program (QMB), the Specified Low-income Medicare Beneficiary Program (SLMB) 

and the Qualified Individual Program (QI). Congress also acted to help low-income 

Medicare beneficiaries in the new Part D prescription drug program by creating a 

Low Income Subsidy (LIS). Together, these programs help millions of beneficiaries 

afford needed medical services and medications. However, millions of beneficiaries 

who are eligible for these programs are not participating. 

Medicare Savings Programs 

The Federal Government broadly defines three categories of beneficiaries and programs that comprise the MSP. Under current law, Qualified Medicare Beneficiaries 

(QMBs) have income at or below 100 percent of the federal poverty line (FPL) 

($10,210—individual/$13,690—couple in 2007), but above eligibility for full Medicaid 

coverage. State Medicaid programs pay Part B premiums and all Medicare costsharing for QMBs. Specified Low-Income Beneficiaries (SLMBs) have income between 100 and 120 percent of the FPL, and state Medicaid programs pay their Part 

B premiums. Qualifying Individuals (QIs) have income between 120 and 135 percent 

of the FPL and the Federal Government pays their Part B premiums. The QMB and 

SLMB programs are entitlements for which state Medicaid programs pay a share 

of these costs. The QI program is funded through an annual capped appropriation 

passed through the Medicare Part B Trust Fund. Federal law sets the income eligibility requirements, application procedures and asset limitations to qualify for these 

programs differ substantially across the states. 

The MSP are a vital safety net for approximately 1.6 million beneficiaries. However, estimates suggest that only 40 to 60 percent of eligible beneficiaries are participating. Onerous application requirements, personal disclosures about income and 

assets, and lack of awareness of the programs are largely responsible for the low 

enrollment rates. States also have a financial disincentive to find and enroll these 

low-income Medicare beneficiaries because state expenditures increase when beneficiaries enroll in MSP. 


joloto on DSKB35BYQ1 with HEARING
3 

Low-Income Subsidy Program for Prescription Drugs 

The LIS program provides extra help for beneficiaries with limited income and resources in paying for Medicare prescription drug plan costs. For 2007, beneficiaries 

with incomes below 150 percent of the Federal Poverty Level (FPL)—$14,700 individual/$19,800 couple and with assets under $10,210 (individual) or $20,410 (couple)—qualify for the LIS. However, benefits in the LIS differ substantially based on 

where beneficiaries fall on the income and asset spectrums—‘‘ranging from complete 

premium assistance with no deductible and copayments of $1-$5.35, to partial premium assistance with a deductible and copayments that are lower than standard 

coverage. 

Beneficiaries with full Medicaid benefits (‘‘dual eligibles’’), those in a Medicare 

Savings Program and those who receive Supplemental Security Income (SSI) are 

deemed eligible for the LIS and automatically enrolled in a prescription drug plan. 

Thus, of the approximately nine million beneficiaries currently enrolled in the LIS 

program, more than six million were automatically enrolled into a plan. However, 

CMS estimates that more than 3 million beneficiaries eligible for the LIS are not 

enrolled in a prescription drug program at all. Targeted, aggressive outreach programs are necessary to get these beneficiaries enrolled. Numerous Medicare advocates and analysts have also called for an end to the complicated asset test, which 

has kept millions more from qualifying for extra help and, they argue, penalizes 

beneficiaries who have managed to accrue even modest savings or assets. 

Increased enrollment in LIS and MSP would provide financial security to millions 

of Medicare beneficiaries who can’t afford Medicare’s out-of-pocket costs. Improved 

outreach, less burdensome application processes, and adjusted income and asset limits could greatly increase enrollment, improving both the financial and physical 

health of Medicare’s most vulnerable beneficiaries. 

‘‘We must determine how best to ensure that Medicare remains affordable 

for all senior citizens and people with disabilities,’’ said Chairman Stark 

in announcing the hearing. ‘‘Improving the Low Income Subsidy and Medicare Savings Programs is the most efficient and direct way to guarantee affordable, comprehensive Medicare coverage to low-income 

beneficiaries.’’ 

FOCUS OF THE HEARING: 

The hearing will focus on the current state of the Part D Low Income Subsidy 

the Medicare Savings Programs, and opportunities to increase enrollment and expand eligibility in these programs. 

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS: 

Please Note: Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee 

website and complete the informational forms. From the Committee homepage, 

http://waysandmeans.house.gov, select ‘‘110th Congress’’ from the menu entitled, 

‘‘Committee Hearings’’ (http://waysandmeans.house.gov/Hearings.asp?congress=18). 

Select the hearing for which you would like to submit, and click on the link entitled, 

‘‘Click here to provide a submission for the record.’’ Once you have followed the online instructions, completing all informational forms and clicking ‘‘submit’’ on the 

final page, an email will be sent to the address which you supply confirming your 

interest in providing a submission for the record. You MUST REPLY to the email 

and ATTACH your submission as a Word or WordPerfect document, in compliance 

with the formatting requirements listed below, by close of business Thursday, May 

17, 2007. Finally, please note that due to the change in House mail policy, the U.S. 

Capitol Police will refuse sealed-package deliveries to all House Office Buildings. 

For questions, or if you encounter technical problems, please call (202) 225–1721. 

FORMATTING REQUIREMENTS: 

The Committee relies on electronic submissions for printing the official hearing 

record. As always, submissions will be included in the record according to the discretion of the Committee. The Committee will not alter the content of your submission, 

but we reserve the right to format it according to our guidelines. Any submission 

provided to the Committee by a witness, any supplementary materials submitted for 


joloto on DSKB35BYQ1 with HEARING
4 

the printed record, and any written comments in response to a request for written 

comments must conform to the guidelines listed below. Any submission or supplementary item not in compliance with these guidelines will not be printed, but will 

be maintained in the Committee files for review and use by the Committee. 

1. All submissions and supplementary materials must be provided in Word or WordPerfect 

format and MUST NOT exceed a total of 10 pages, including attachments. Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official 

hearing record. 

2. Copies of whole documents submitted as exhibit material will not be accepted for printing. 

Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material 

not meeting these specifications will be maintained in the Committee files for review and use 

by the Committee. 

3. All submissions must include a list of all clients, persons, and/or organizations on whose 

behalf the witness appears. A supplemental sheet must accompany each submission listing the 

name, company, address, and telephone and fax numbers of each witness. 

Note: All Committee advisories and news releases are available on the World 

Wide Web at http://waysandmeans.house.gov. 

The Committee seeks to make its facilities accessible to persons with disabilities. 

If you are in need of special accommodations, please call 202–225–1721 or 202–226– 

3411 TTD/TTY in advance of the event (four business days’ notice is requested). 

Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above. 

f 

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. 


joloto on DSKB35BYQ1 with HEARING
5 

These programs 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 


joloto on DSKB35BYQ1 with HEARING
6 

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:] 


joloto on DSKB35BYQ1 with HEARING
7 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.001
8 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.002
9 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.003
10 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.004
11 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.005
12 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.006
13 

f 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.007
14 

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. 


joloto on DSKB35BYQ1 with HEARING
15 

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 


joloto on DSKB35BYQ1 with HEARING
16 

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. 

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 


joloto on DSKB35BYQ1 with HEARING
17 

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 Honorable Jason Altmire follows:] 


joloto on DSKB35BYQ1 with HEARING
18 

Prepared Statement of The Honorable Jason Altmire, a Representative in 

Congress from the State of Pennsylvania 

Thank you, Mr. Chairman, Ranking Member Camp, and Members of the Committee, including my colleague from Pennsylvania, Mr. English, for providing me 

with the opportunity to testify today about my bill, the Relief and Elimination of 

the Medicare Enrollment Deadline Penalty (or REMEDY) Act, H.R. 1310. 

As part of the Medicare Modernization Act of 2003 (MMA), 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 on May 15, 2006. The rationale for a late enrollment penalty was 

based in part on experience with the Medicare Part B program and to prevent adverse selection. 

The late enrollment penalty—1% of the base beneficiary premium—is added for 

each uncovered month that a beneficiary was eligible for coverage and 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 on May 15, 2006. Their next 

opportunity to enroll was during the annual open enrollment period, which ran from 

November 15, 2006 through December 31, 2006. Individuals who deferred enrollment during the initial signup period and decided to wait until open enrollment 

would have a total of seven uncovered months and would be penalized an additional 

7% starting with their 2007 monthly premium. The average monthly penalty in this 

case is $1.91 and the percentage penalty applies for as long as the beneficiary is 

enrolled in a Part D plan. 

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 Veteran’s Affairs Administration. In Pennsylvania, seniors 

are able to maintain creditable coverage through the PACE, PACENET, and PACE 

Plus Medicare programs. 

In addition, exceptions are made for low-income individuals. Certain categories of 

low-income populations, including Dual Eligibles (those eligible for Medicare and 

Medicaid), enrollees in the Medicare Savings programs, and Supplemental Security 

Income recipients, were automatically enrolled in plans, and therefore face no penalty. The MMA also extends low-income subsidies to individuals with incomes below 

150% 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 these 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 be the greater of: (1) the amount CMS determines is actuarially sound or 

(2) 1% 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 the Pittsburgh area, seniors had 

the option of selecting one from over 60 available plans. It was simply too much information to consume within too short of a time frame. 

On top of the new plan options, the initiation of the program on January 1, 2006 

led to a number of access issues for beneficiaries. Thousands of seniors were forced 

to wait days, in some cases weeks, to obtain vital prescriptions. It was clear to all 

outside observers that the Medicare Part D program was not ready for prime time. 

Considering the hasty initiation of the program, I introduced the REMEDY Act, 

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 an appropriate plan. The REMEDY Act provides much needed relief to millions of Medicare beneficiaries, particularly those with limited incomes. 

H.R. 1310 does the following: 

§ It delays implementation of the late enrollment penalty for the first two years, 

2006 and 2007, of the program. 

§ It directs the Secretary of Health and Human Services to devise a system in 

which to distribute rebates to any Medicare beneficiaries who may have paid a late 

enrollment penalty. 

§ It permanently eliminates the late enrollment penalty for low-income subsidy 

beneficiaries, who may otherwise find it difficult to pay for the increase in their 

monthly premium. I note and applaud the announcement of Centers for Medicare 

and Medicaid Services (CMS) in January to delay the late enrollment penalty for 


joloto on DSKB35BYQ1 with HEARING
19 

low-income enrollees for one year. My bill will codify this waiver and make it permanent. 

As of June 11, 2006, approximately 4.4 million Medicare beneficiaries did not 

have prescription drug coverage and thus may be subject to a late enrollment penalty. CMS has not released data about the specific number of Medicare beneficiaries 

who have started to pay the penalty in 2007. But in my district, the Pennsylvania 

Department of Aging estimates that 14,000 individuals are eligible for 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, for the opportunity to testify today in support 

of my bill. 

f 

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. 


joloto on DSKB35BYQ1 with HEARING
20 

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 narrowest 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 


joloto on DSKB35BYQ1 with HEARING
21 

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. 


joloto on DSKB35BYQ1 with HEARING
22 

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? 


joloto on DSKB35BYQ1 with HEARING
23 

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. 


joloto on DSKB35BYQ1 with HEARING
24 

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? 


joloto on DSKB35BYQ1 with HEARING
25 

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. 


joloto on DSKB35BYQ1 with HEARING
26 

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. 


joloto on DSKB35BYQ1 with HEARING
27 

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 sometime 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. 


joloto on DSKB35BYQ1 with HEARING
28 

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. 


joloto on DSKB35BYQ1 with HEARING
29 

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. 


joloto on DSKB35BYQ1 with HEARING
30 

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:] 

Prepared Statement of Beatrice Disman, Regional Commissioner, New York 

Region, Social Security Administration 

Mr. Chairman and Members of the Committee: 

On behalf of Commissioner Astrue, I thank you for inviting me to provide an update on the Social Security Administration’s (SSA’s) ongoing efforts to sign-up eligible Medicare beneficiaries for the low-income subsidy (LIS)—or ‘‘extra help’’ as it is 

commonly called, under the Medicare Prescription Drug Program. I am Bea Disman, 

and I have served for over a decade as Regional Commissioner of the New York Region. I have also spent the past 3 years as Chair of SSA’s Medicare Planning and 

Implementation Task Force. In this role I have seen the truly tireless and dedicated 

efforts of so many SSA employees, as they have reached out to those individuals 

who could benefit from ‘‘extra help.’’ I am pleased to provide you with an update 

of our story—exactly one year to the day after we last met to discuss this very important issue. 

Since we last spoke, SSA has continued its intensive efforts to locate low-income 

Medicare beneficiaries, and provide them with an opportunity to apply for ‘‘extra 

help’’ assistance. We have used targeted mailings, phone calls, computer data 

matches, community forums, partnerships with State agencies and non-profit organizations, public information fact sheets, word-of-mouth—in short, any and all 

means at our disposal—to reach those eligible to receive assistance with out-of-pocket costs associated with Medicare prescription drug coverage. Today’s testimony 

looks back at some of those efforts, but more importantly, it looks at how SSA’s outreach initiatives are moving forward. 

Background 

To begin, it may be helpful to recap Social Security’s role and responsibilities regarding the new Medicare Prescription Drug Program. This provides the context to 

further describe SSA’s activities in getting low-income people the ‘‘extra help’’ intended by Congress. 

SSA was given the responsibility by Congress to take ‘‘extra help’’ applications 

and to make eligibility determinations for individuals who were not automatically 

eligible, by virtue of their receipt of full Medicare and Medicaid, Supplemental Security Income (SSI), or Medicare Savings Programs (MSPs). In order to be eligible for 


joloto on DSKB35BYQ1 with HEARING
31 

‘‘extra help,’’ individuals must have incomes below 150 percent of the poverty level 

applicable to their corresponding household size. In 2007 this is $15,315 for an individual and $20,535 for a couple. Individuals with incomes between 135 percent and 

150 percent of poverty are eligible for a subsidy amount based on a sliding scale. 

The income limits adjust annually, based on the Federal Poverty Level (FPL). 

Individuals must also meet a resource test. The resource level is $11,710 for single individuals or $23,410 for couples. (These figures include the $1,500 credit given 

to individuals who will use their resources for funeral or burial expenses.) Those 

who have countable resources of less $6,120 for an individual and $9,190 for couples, receive the most cost-sharing assistance. The resource limits adjust annually 

based on the Consumer Price Index, or CPI. 

SSA was given these responsibilities because of its network of nearly 1,300 offices 

across the country, and because of its already existing role in administering some 

parts of the Medicare program. Over the past 70 years, SSA has gained a reputation 

for helping people in the communities where they live, and Congress realized that 

SSA’s presence ‘‘on the ground’’ would be vital in the launch of the Medicare ‘‘extra 

help’’ program. Also, the low-income subsidy was designed with many similarities 

to SSI, a means-tested assistance program for low-income aged, blind and disabled 

individuals, which SSA has administered for more than 30 years. 

Application Process Improvements 

When we last met, I described for you the extensive research and review that 

went into the creation of SSA’s application for ‘‘extra help.’’ Focus groups and cognitive testing experts, automation experts, advocate organizations, form design professionals, and Congressional staffs all contributed to this undertaking. The resulting application was the most extensively tested form SSA has ever produced. But 

you should also know that our efforts to improve the application—to provide an easy 

way for beneficiaries to apply for ‘‘extra help’’—are continuing. 

For example, we have added fields to the application that allow the applicant to 

enter the amount of his or her Social Security benefit. Of course SSA already knows 

this information, and the original application instructions stated that the applicant 

did not need to supply Social Security benefit amounts. But our analysis of applications received showed that applicants were trying to enter the information anyway, 

and this was frequently leading to inaccurate entries and inaccurate eligibility determinations. In addition, we revised the application to request the applicant’s date 

of birth, so that we can identify him or her if they entered the wrong Social Security 

number. In another example, we simplified the question about filing as a couple and 

changed the resource amounts to reflect the 2007 resource limits. 

In response to advocates and Congressional concerns, SSA is currently reviewing 

the paragraph at the end of the ‘‘extra help’’ application (sometimes referred to as 

the ‘‘penalty clause’’). Our review has been prompted in response to concerns some 

have raised that such language might inhibit individuals from filing. 

Another interesting note is the way Medicare beneficiaries are currently filing for 

‘‘extra help.’’ Since the beginning of Fiscal Year 2007, about 22 percent of new applications are Internet filings. This means that, as a percentage of applications received, the online ‘‘extra help’’ application has even exceeded the success of SSA’s 

online Application for Retirement benefits. The online application has been a real 

success story, receiving one of the highest scores ever given to a public or private 

sector organization by the American Customer Satisfaction Index. 

Outreach Efforts 

I would now like to summarize the efforts SSA has undertaken to inform beneficiaries about the ‘‘extra help’’ available for costs with prescription drugs. Efforts 

to educate the public about the new, ‘‘extra help’’ program began almost immediately after passage of MMA, and this outreach continues today. As I mentioned 

earlier, SSA has worked with CMS and other Federal agencies, community based 

organizations, advocacy groups, and State entities in order to spread the word about 

the available ‘‘extra help.’’ 

We have been in the communities—‘‘in senior citizen centers, pharmacies, public 

housing, churches—‘‘any place in which we thought senior citizens or the disabled 

were likely to be found. We also continue to work with States that have their own 

pharmaceutical programs, State Health Insurance Programs, Area Agencies on 

Aging, local housing authorities, community health clinics, prescription drug plans, 

and others to identify people with limited income and resources who may be eligible 

for the ‘‘extra help.’’ 

Throughout these efforts, SSA’s goal has been to reach every potentially eligible 

Medicare beneficiary multiple times, in a variety of ways: for example, by targeted 

mailings and events, and follow-up phone calls. And while we are confident we have 


joloto on DSKB35BYQ1 with HEARING
32 

taken appropriate steps to reach out to those who may be eligible for the ‘‘extra 

help,’’ our outreach efforts are continuing. Because there is no enrollment period for 

the ‘‘extra help,’’ a Medicare beneficiary can apply at any time. This means there 

is no inappropriate time to reach out to our lower-income beneficiaries, and there 

is no wrong time for these individuals to complete an application. 

As you know, many estimates have been made as to the size of the eligible population. But whether there are 300 or 3 million people, SSA’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, SSA will help you apply. 

SSA’s Initial Outreach Efforts 

To further explain how this outreach philosophy has translated into action, I 

would now like to describe some of the specific routes SSA has taken to reach our 

lower-income Medicare beneficiaries. 

As I described to you in last year’s testimony, during the initial start-up phase 

of the new Medicare prescription drug program, SSA mailed almost 19 million applications to Medicare beneficiaries who, based on systems data available to SSA, appeared to have incomes below 150 percent of the FPL. Our goal was to have as 

many potentially eligible lower-income Medicare beneficiaries as possible file for the 

‘‘extra help’’ before the Medicare prescription drug program started in January 

2006. 

I also described for you some of the many ways in which SSA followed-up with 

those individuals who did not return the applications sent in the initial mailing. 

• Through a vendor contract, we called 9.1 million people and mailed 5 million 

follow-up notices. SSA representatives provided one-on-one assistance to nearly 400,000 beneficiaries. 

• Through a separate analysis, we identified approximately 1.5 million disability beneficiaries who received an ‘‘extra help’’ application mailer, but did 

not file an application. We mailed a special follow-up notice to all of these 

beneficiaries, assuring them that filing for ‘‘extra help’’ would have no adverse 

effect on their disability benefits. 

• We personally called over 300,000 beneficiaries who did not respond to an 

‘‘extra help’’ application mailer, but had previously applied for and received 

the Medicare $600 drug discount card credit during 2004 or 2005. 

• We coordinated targeted advertising efforts with national organizations, such 

as AARP, and targeted outreach events with state organizations such as the 

Elderly Pharmaceutical Insurance Coverage program in New York. 

Ongoing Outreach 

SSA continues to use our standard Agency mailings to inform the public. For example, the cost of living adjustment notice sent in November 2006 to over 50 million 

Social Security beneficiaries, contained information about the new drug program 

and the availability of ‘‘extra help.’’ In additional efforts to reach specific communities, SSA has undertaken targeted mailings to beneficiaries with representative 

payees, beneficiaries who speak Spanish, Asian-American and African-American 

households, and beneficiaries age 79 and older who lived in zip codes with a high 

percentage of low income households. During the period of June through August, 

2006, 2.5 million ‘‘extra help’’ applications were mailed to these individuals. SSA has 

also made a special effort to reach and re-sign those ‘‘extra help’’ recipients who 

have lost ‘‘deemed’’ or automatically eligible status. As I previously described, some 

individuals received the subsidy automatically, by virtue of Medicaid, SSI or MSP 

eligibility. In some cases, however, these individuals lost eligibility to these other 

programs, and thus their deemed status, as of January 2007. Working with CMS, 

in September 2006, SSA mailed more than 600,000 applications with CMS notices 

to Medicare beneficiaries who would no longer be automatically eligible for ‘‘extra 

help.’’ To date, more than 247,000 have reapplied and 168,000 are now eligible. This 

is in addition to a number of individuals who have regained automatic eligibility 

through re-entitlement to certain State programs. Social Security is also personally 

calling 188,000 of these individuals who, according to our records, potentially have 

incomes below the Federal Poverty Level. In addition to the many specific outreach 

activities SSA has performed in the past year, the agency also provides educational 

outreach to Medicare attainers—those current Social Security beneficiaries who turn 

65 or reach the 25th month of their disability. If our records indicate an attainer 

may potentially be eligible for ‘‘extra help,’’ SSA sends an application. This means 

between 120,000–130,000 beneficiaries receive ‘‘extra help’’ applications every 

month. Similarly, many individuals call our 800 number or visit our field offices to 


joloto on DSKB35BYQ1 with HEARING
33 

conduct traditional Social Security business. We educate these individuals about the 

‘‘extra help,’’ and we will take the application if it is appropriate. 

Reaching Caregivers: A New Strategy 

On behalf of Commissioner Astrue, I am also pleased to announce today, a new 

strategy in our continuing efforts to inform the public about the ‘‘extra help’’ program. This outreach initiative, themed ‘‘Show Someone You Love How Much You 

Care,’’ is designed to inform relatives and caregivers—the sons, daughters, grandchildren and family friends—who count a Medicare beneficiary among the important 

people in their lives. By reaching these care providers, 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 that SSA has engaged 

as partners over these last three years, to ask their assistance in the new strategy. 

We plan to launch this new strategy around Mother’s Day. On Mother’s Day, we 

celebrate some of the most special people in our lives. This year, we are asking that 

people show someone they love how much they care, by learning more about the 

‘‘extra help’’ that is available with Medicare prescription drug costs. We are also 

asking them to take a further step—help these loved ones to apply. In the week immediately preceding Mother’s Day, SSA employees across the country will be visiting their local community centers, grocery stores, restaurants, and places of worship, to make information about the ‘‘extra help’’ available on or around the Mother’s Day weekend. SSA also plans to publish related articles in the local media. The 

outreach effort includes distribution of special pamphlets explaining ‘‘extra help,’’ 

entitled ‘‘This Mother’s Day, Show Someone You Love How Much You Care.’’ The 

campaign will continue throughout this year. There will be a second series of targeted events scheduled for Father’s Day. You should have received copies of these 

pamphlets within the past day or two, along with an announcement letter from 

Commissioner Astrue. We are excited about this new initiative, and its prospects of 

assisting low-income Medicare beneficiaries. 

Making a Connection with Medicare Savings Plans 

I would now like to turn to another topic of great importance to SSA and to this 

Committee—outreach to individuals potentially eligible for Medicare Savings Programs, or MSPs. 

In May 2007, as in prior years, SSA will be sending our annual notice to approximately 6 million beneficiaries who, based on SSA’s systems matching of data with 

Veterans Affairs, the Office of Personnel Management and the Railroad Retirement 

Board, could be potentially eligible for MSPs. These programs (Qualified Medicare 

Beneficiaries/QMB, Specified Low-Income Medicare Beneficiaries/SLMB, Qualifying 

Individuals/Q1, and Qualified Disabled and Working Individuals/QDWI) provide 

cost-sharing assistance or ‘‘wrap-around’’ coverage to low-income recipients of traditional Medicare. They are a vital safety net, and SSA is pleased to cooperate with 

CMS in this effort. The MSP letters are tailored to address the programs to which, 

based on the matched records, an individual may be eligible. Since the inception of 

the Prescription Drug component of Medicare, the letters have also addressed ‘‘extra 

help,’’ where appropriate. 

In addition to the notices we send to inform individuals about MSP assistance, 

SSA also shares our list of potential eligibles with State Medicaid agencies. Information such as income, along with names and addresses of these 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’ MSP outreach through the ‘‘buy-in’’ process—generally speaking, the purchase of Medicare Part B by a State on behalf of a low-income Medicaid recipient. In 32 States (and the District of Columbia) SSA has an 

agreement that our determination of SSI eligibility imparts Medicaid eligibility as 

well, and therefore MSP eligibility. And even in situations where SSA has no autoenrollment agreement with the State, we still generate an alert that the State can 

use in assessing MSP eligibility. 

Finally, we would also note that all SSA decision letters regarding ‘‘extra help’’ 

provide generic information about Medicare Savings Programs. Information on the 

‘‘extra help’’ decisions themselves are also transmitted to CMS. Thus CMS knows 

whether an ‘‘extra help’’ application is approved or disallowed. They also know 

whether the resource level is below $6,120 for an individual, or $9,190 for a couple, 

and the income as a percent of FPL. 

Current Status of Beneficiaries Filing for ‘‘Extra Help’’ 

From the beginning of the fiscal year (October 2006) through mid-April, almost 

850,000 beneficiaries have filed for ‘‘extra help’’ with SSA. About 200,000 of these 

filings were unnecessary, because either the applicants were automatically eligible 


joloto on DSKB35BYQ1 with HEARING
34 

or because they had filed more than one application. Based on these filings we have 

found about 350,000 individuals eligible for assistance. 

Generally, SSA continues to receive 30,000 applications for ‘‘extra help’’ every 

week. This continued level of interest from beneficiaries tells us our outreach campaign is working. 

While SSA has no direct role in assisting individuals in either selecting or enrolling in PDPs, we have also provided instructions to the field offices on how to make 

sure those with the new Medicare prescription drug coverage questions are directed 

to the resources they need. In some cases this means our employees will simply 

refer the questioner to 1–800–MEDICARE, or to the beneficiary’s PDP provider, but 

in other cases it means making a personal call to state coordinators, reprinting and 

faxing award notices, and even making emergency calls to CMS Regional Offices. 

SSA employees across the country are continuing to communicate information 

about this valuable benefit. Our job is not completed, and we continue to look for 

more ways to reach those eligible for the ‘‘extra help’’ program. 

Conclusion 

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 SSA will continue to do our very best 

in administering the ‘‘extra help’’ assistance, and in partnering with State and other 

Federal Government agencies in the promotion of Medicare Savings Plans. 

We look forward to our continued dialogue with organizations, advocacy groups, 

and of course, this Committee. 

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

f 

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. 


joloto on DSKB35BYQ1 with HEARING
35 

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 crisscross 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 promote access to critical 

health care services. 


joloto on DSKB35BYQ1 with HEARING
36 

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:] 


joloto on DSKB35BYQ1 with HEARING
37 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.008
38 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.009
39 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.010
40 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.011
41 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.012
42 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.013
43 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.014
44 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.015
45 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.016
46 

f 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.017
47 

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 a one-on-one basis. 


joloto on DSKB35BYQ1 with HEARING
48 

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-tohand—— 

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 reVerDate Sep 11 2014 16:28 Jun 24, 2016 Jkt 089561 PO 00000 Frm 00052 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\89561.XXX 89561

joloto on DSKB35BYQ1 with HEARING
49 

ceive 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 


joloto on DSKB35BYQ1 with HEARING
50 

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. 


joloto on DSKB35BYQ1 with HEARING
51 

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. 


joloto on DSKB35BYQ1 with HEARING
52 

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. 


joloto on DSKB35BYQ1 with HEARING
53 

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. 


joloto on DSKB35BYQ1 with HEARING
54 

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. 


joloto on DSKB35BYQ1 with HEARING
55 

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. 


joloto on DSKB35BYQ1 with HEARING
56 

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? 


joloto on DSKB35BYQ1 with HEARING
57 

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 


joloto on DSKB35BYQ1 with HEARING
58 

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? 


joloto on DSKB35BYQ1 with HEARING
59 

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 giveaway 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. 


joloto on DSKB35BYQ1 with HEARING
60 

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. 


joloto on DSKB35BYQ1 with HEARING
61 

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. 


joloto on DSKB35BYQ1 with HEARING
62 

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. 


joloto on DSKB35BYQ1 with HEARING
63 

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. 

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:] 


joloto on DSKB35BYQ1 with HEARING
64 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.018
65 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.019
66 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.020
67 

f 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.021
68 

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. 


joloto on DSKB35BYQ1 with HEARING
69 

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. 


joloto on DSKB35BYQ1 with HEARING
70 

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. 


joloto on DSKB35BYQ1 with HEARING
71 

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. 


joloto on DSKB35BYQ1 with HEARING
72 

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? 


joloto on DSKB35BYQ1 with HEARING
73 

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. 


joloto on DSKB35BYQ1 with HEARING
74 

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. 


joloto on DSKB35BYQ1 with HEARING
75 

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:] 

Prepared Statement of J. Ruth Kennedy, Medicaid Deputy Director, 

Louisiana Department of Health and Hospitals, Baton Rouge, Louisiana 

Chairman Stark, Ranking Member Camp and distinguished members of the 

Health Subcommittee: Good morning. My name is Ruth Kennedy and for the past 

seven years I have been a Deputy Medicaid Director for the Louisiana Department 

of Health & Hospitals. In that position, I am responsible for Medicaid and SCHIP 

eligibility and enrollment in our State. During those seven years, we have made a 

concerted effort to increase enrollment of eligible seniors and people with disabilities 

into our Medicare Savings Programs. Most recently, one of the immediate goals of 

Governor Kathleen Blanco’s 2004 Health Care Reform Plan included increasing participation of eligible but unenrolled persons in the Medicare Savings Programs 

(MSP). 

I want to thank the Committee for the invitation this morning to share some of 

the methods and strategies that have proven successful in substantially increasing 

enrollment in the Medicare Savings Programs in Louisiana. In the period from January 2000 to April 1st of this year we have seen enrollment in the Medicare Savings 

Programs increase by just under 43,000 individuals, which for us represents a 44% 

increase. The biggest percentage increases were in our Pure SLMB and QI–1 Programs: 161% and 401% respectively. I make mention of this because nationally, the 

SLMB and QI–1 have lower take up rates than QMB. 

Background 

Louisiana first began to focus on increasing enrollment in MSP in late 1999 in 

response to correspondence from CMS [at that time HCFA] which urged states to 

take pro-active steps to increase participation of eligible but unenrolled people into 

the Medicare Savings Program. 


joloto on DSKB35BYQ1 with HEARING
76 

1Summer, Laura Administrative Costs Associated With Enrollment and Renewal for 

the Medicare Savings Programs: A Case Study of Practices in Louisiana, 2004 http:// 

www.statesolutions.rutgers.edu/Reports/LAlCaseStudylv1.pdf 

For MSP qualifying seniors and people with disabilities, the current $93.50 increase in their monthly Social Security check represents as much as a 17% increase 

in ‘‘spendable’’ dollars. Now that MSP enrollees are also automatically eligible for 

Extra Help with out-of-pocket costs and immediate enrollment into a Medicare Prescription Drug Plan, the value of MSP participation is even greater. 

The increase in enrollment in Louisiana has resulted from a combination of administrative simplification and intensive, ongoing outreach. Outreach alone is of 

limited usefulness unless both the application and renewal processes are streamlined and simplified. 

Application Simplification 

Low literacy levels, poor eyesight, hearing impairments, memory loss and other 

health care problems are barriers to enrollment which we have identified and are 

working to mitigate. We designed a simplified Application Form specifically for the 

Medicare Savings Programs, eliminated the requirement for a face-to-face or telephone interview, relaxed verification requirements, and we use less restrictive methods when calculating countable resources. These are all options allowed the States 

by CMS. Information and application assistance is readily available through a widely publicized toll-free MSP hotline that is manned by knowledgeable Medicaid eligibility professionals. 

Focus on Retention 

The annual renewal process has been addressed as well, since we found in our 

State that many enrollees were having their cases closed not because they were no 

longer eligible for MSP, but solely because they did not return the required paperwork. We began conducting ex parte reviews where possible, i.e., using our inquiry 

rights to other systems such as Food Stamps to verify income and resources. When 

an ex parte renewal is not possible, caseworkers can complete the review of circumstances subject to change by telephone, without the need for a signed renewal 

form. These procedures have resulted in less than1⁄2 percent of our enrollees having 

their case closed for failure to return a renewal form. 

Beginning in July, we are further simplifying MSP renewals by adopting the technique used by the Social Security Administration to conduct renewals for Low Income Subsidy. We will mail letters advising enrollees of the income and resource 

information on our records and request that they contact us only if our information 

is incorrect or their income or resources has changed. Otherwise they need not do 

anything. A careful review of our administrative data revealed that our MSP cases 

are almost never closed at renewal because of increased income or resources so we 

believe this is responsible public policy. 

We know that keeping eligible people enrolled—or plugging the holes in the 

bucket—is an important key to increasing Medicare Savings Program participation. 

Reducing closures at renewal for purely procedural reasons and simplifying the renewal process have resulted in significant administrative savings for the Department as well. 1

Closures at renewal can result in undue hardship for this vulnerable population. 

Persons closed at renewal are often not aware that their case has been closed until 

they discover that the amount of the Social Security check directly deposited into 

their checking account is ∼$280 less than anticipated. The retroactive and current 

premiums due to SSA were automatically deducted. 

Importance of Outreach 

We have made substantial administrative changes. But the reality is without 

help, many people in our target population are unable to navigate even our ‘‘kinder, 

gentler’’ bureaucracy. The only way to reach them is through intensive outreach 

and face-to-face interaction—contact with them, but also with their sons and daughters, with their grandchildren, with their nieces and nephews, with caring friends 

and neighbors, and with sources of information they trust. 

Community Partners 

We have forged partnerships with hundreds of those sources of information: SHIP 

outreach workers, the Social Security Public Affairs Specialists in Louisiana, community organizations, medical providers, and local social service agencies. They are 

valuable partners for identifying and disseminating information to potential enrollees, many who are homebound or live in rural areas. These local partners have dayto-day contact with our target audience and have credibility and the trust of their 


joloto on DSKB35BYQ1 with HEARING
77 

2Sofaer, Shoshanna, Assessing the Louisiana State Solutions Project, May 2006 http:// 

www.statesolutions.rutgers.edu/Reports/Shoshanna%20Brief.pdf 

communities. We have found that the messenger is very important. Our targeted 

population responds well to a representative at the local Social Security Office, 

Council on Aging, Meals on Wheels, their doctor, pharmacist, or home health provider. Without question, the MSP partners we have engaged have been instrumental in helping raise awareness and increasing enrollment. 

Role of Medicaid Eligibility Employees 

Medicaid eligibility employees who work in the 45 local Medicaid eligibility offices 

throughout the state have spearheaded our MSP community outreach efforts, logging literally thousands of hours. These employees—caseworkers, supervisors, and 

managers—live in the cities, towns, and communities where they are conducting 

outreach. They understand the culture. They can identify those trusted sources of 

information in the community and recruit partners. They have the knowledge and 

experience to assist with application completion and answer questions about MSP. 

Our eligibility offices have recruited community partners, distributed and kept 

stocked MSP applications in ‘‘Take One’’ holders, given presentations about MSP, 

and conducted special direct mail initiatives. They have raised awareness of MSP 

and provided one-to-one assistance at hundreds of events and locations, with much 

of the activity taking place after normal working hours and on weekends. 

This past month for example—April of 2007—some of the settings in which our 

eligibility staff conducted MSP outreach were the Gusher Days Festival in Oil City, 

a Walgreens Pharmacy in New Iberia, the Etouffee Festival in Arnaudville, a community health center in Luling, the Delta Music Festival in Ferriday, a Family Life 

Conference in Hammond, heath fairs at places of worship in Baton Rouge and Monroe, and a senior citizen’s center in eastern New Orleans. 

Our initiative to empower and provide opportunities for eligibility staff to conduct 

outreach for the Medicare Savings Programs is the same model we had earlier used 

beginning in late 1998 to increase enrollment of children in our Medicaid and 

SCHIP Programs. Their performance has greatly exceeded our (high) expectations. 

Our employees have demonstrated a strong commitment to helping seniors and people with disabilities who have limited income and resources. They have proven to 

be creative, imaginative, and passionate about outreach and they believe that what 

they are doing is important and deserving of their time and effort. Staff engaged 

in outreach work tirelessly to maintain their regular workload while also engaging 

in MSP outreach efforts. 2

Funding MSP Outreach 

The outreach model we have employed is relatively low cost. But without monetary investment in outreach, we could not have achieved increases of this magnitude 

Medicare Savings Programs enrollment. In our case, funding for outreach as well 

as valuable technical assistance was provided by the Robert Wood Johnson Foundation through a three year State Solutions grant ($140,000 annually) and a subsequent, one year, ‘‘post-Katrina’’ grant. We were able to claim federal matching funds 

for Medicaid administration (50% FFP). 

With that funding we held annual conferences for staff involved in MSP outreach 

at which they shared promising practices, heard from national subject matter experts and networked with local MSP partners. We purchased promotional items, 

which we found to be essential for generating interest at our outreach events. We 

provided compensation to employees for travel and for work performed outside normal working hours and on weekends, we printed posters and flyers, we paid for 

radio commercials, and we paid for follow up mailing to individuals identified 

through the Social Security Administration’s ‘‘leads’’ file. 

I must acknowledge the Rutgers Center for State Health Policy which, in conjunction with the State Solutions grant, provided technical assistance, guidance, and 

support. They provided important expertise and additional resources such as opportunities to network with other States and organizations who are working to increase 

enrollment in MSP 

It is important to evaluate outreach activities to assure that we are getting ‘‘the 

biggest bang for the buck.’’ We closely monitor the number of phone calls requesting 

MSP information or an application and the actual number of new applications received as well as enrollment and retention trends in each geographic region of the 

State so that we can quickly and make adjustments as needed. 


joloto on DSKB35BYQ1 with HEARING
78 

Program Costs in Louisiana 

While the costs for outreach have been relatively modest, the same cannot be said 

for the impact of increased enrollment on the Medicaid Budget. A 44% increase in 

enrollment translates to a 44% increase in our budget for Medicare Buy-In, at the 

same time that Medicare Part B premiums have been sharply increasing. Unlike 

regular Medicaid budget cuts, in which reductions in payments to providers is an 

option, we do not have the latitude to reduce our state match for the ‘‘fixed’’ Medicare Part B premium. 

I previously alluded to the rapid growth in enrollment in our QI–1 program. In 

FFY 05, our QI–1 allotment was not sufficient to continue enrollment beyond 

March. We were unable to enroll additional eligible individuals for five months 

while CMS was working to get us a supplemental appropriation. 

Conclusion 

We have found effective outreach for the Medicare Savings Programs to be more 

challenging than outreach to enroll uninsured children. Our target population is 

more likely to view government-funded programs with fear and mistrust, and stigma is certainly a factor. 

Nevertheless, largely as result of Louisiana’s aggressive and sustained Medicare 

Savings Program outreach and administrative simplification initiative, 43,000 more 

Louisiana citizens with limited income and resources are now receiving much needed help with Medicare costs than received help in 1999. We had the infrastructure 

in place to actively participate in outreach for the Medicare Prescription Drug Program Low Income Subsidy and did so. Reducing the number of people eligible for, 

but not enrolled in MSP has reduced the number of people eligible for, but not enrolled in or receiving Extra Help with a Medicare Prescription Drug Plan. 

For all our success in connecting with and enrolling additional people into these 

programs, we have reason to believe that thousands of other people in Louisiana 

who would greatly benefit from enrollment in MSP are not yet enrolled. 

They still don’t realize that help through the Medicare Savings Programs is available. If they do, they’re not aware that we have simplified the application and requirements for enrollment. Their perception is that the application process is onerous and that it is highly unlikely that their application would be successful. We’ve 

all heard the axiom ‘‘perception is reality’’. We’ve changed the reality and we are 

working to change the erroneous perception—for the sake of needy Louisiana citizens who qualify for, but are not yet enrolled and receiving the benefits, of the 

Medicare Savings Programs. 

Thank you for the opportunity to share with your our experience. 

f 

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. 


joloto on DSKB35BYQ1 with HEARING
79 

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:] 


joloto on DSKB35BYQ1 with HEARING
80 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.022
81 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.023
82 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.024
83 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.025
84 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.026
85 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.027
86 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.028
87 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.029
88 

f 


joloto on DSKB35BYQ1 with HEARINGInsert 89561A.030
89 

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, 


joloto on DSKB35BYQ1 with HEARING
90 

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:] 

Prepared Statement of Patricia Nemore, Center for Medicare Advocacy 

Mr. Chairman, Representative Camp, distinguished Members of the Subcommittee. Thank you very much for this opportunity to testify about the Medicare 

Savings Programs (MSP) and the Part D low-income subsidy (LIS), programs that, 

together, provide extra assistance to low-income Medicare beneficiaries for some or 

all of their cost-sharing in Medicare Parts A, B, C and D. 

The Center for Medicare Advocacy has a long history of serving dually eligible 

Medicare beneficiaries in the state of Connecticut and nationally. From our daily 

connection both with beneficiaries directly and with their advocates around the 

country, we know firsthand about the frailty of this population and the challenges 

they face getting the health care they need. We know of the challenges of finding 

and enrolling them in programs that make a huge difference in their access to care. 

The Center is grateful to the Committee for its oversight of and legislative concern about these issues and to Mr. Doggett and Mr. Altmire for the important pieces 

of legislation they have introduced, H.R. 1536 and H.R. 1310, respectively, both of 

which we support. 

I would like to begin my testimony with a story. 


joloto on DSKB35BYQ1 with HEARING
91 

My husband turned 65 in the summer of 2005. He was reasonably healthy at the 

time (and still is). A few months prior to turning 65, he had retired and lost his 

employer-based health insurance. By filling out a very simple form, he and I were 

added to my employer’s insurance for which we make a monthly contribution that 

is deducted from my paycheck. Shortly before he turned 65, he received notice from 

the Social Security Administration of his impending Medicare eligibility with a simple form for him to complete, including a way to inform SSA if he did not want 

Medicare Part B. My husband’s switching to my insurance and then enrolling in 

Medicare required almost nothing of him; what was required could be done by mail 

and phone. 

Contrast his story with that of a 58 year-old disabled New Yorker with emphysema who we’ll call Mr. Gonzales. Mr. Gonzales receives $800/month in Social Security disability payments. After his 24-month waiting period to be eligible for Medicare, he receives the same packet of information that my husband received. The 

question about whether he wants Part B is a hard one for him to answer because 

it costs $93.50/month this year, nearly one eighth of his monthly income. Since he 

does speak and read English, unlike many low-income Medicare beneficiaries, he is 

able to read his Medicare & You Handbook and finds, near the front, a reference 

to help paying health care costs on pages 63–70. On page 63, he sees a reference 

to help paying premiums, discussed on page 67. On page 67, he sees that to get this 

help you have to have income less than $1,123 (so he qualifies on that score) and 

resources of $4,000 or less. He has a checking and savings account and a couple of 

small life insurance policies and thinks the accounts don’t add up to $4,000, so he 

might be okay. 

Mr. Gonzales follows the instruction to turn to page 90 to find out how to apply 

and there is directed to call 1–800–MEDICARE to get the number for his state Medicaid agency. When he calls the number, he is directed to call his local Department 

of Social Services. When he calls that number, none of the voice menu choices 

sounds like the right one for information about help paying Medicare premiums, nor 

does it tell him how to reach a live agent with his question, so he listens for where 

the closest office is. He starts the voice menu over again, because he hears one 

choice that tells him what documents to bring to apply, although again, it does not 

speak specifically about help paying Medicare premiums. 

Mr. Gonzales decides to take his chances and go to the office, which, fortunately 

for him, is only about 60 blocks away. He waits for two hours before seeing a caseworker. The caseworker he finally sees is not familiar with a program to help pay 

Medicare premiums, but, again, luckily for him, a caseworker nearby overhears 

them and tells his caseworker what to do. She asks what papers he has brought 

to document his name, date of birth, home address, other health insurance and income and resources (actually she is incorrect in asking him to document resources, 

but she never heard of the program before so didn’t know that). 

Mr. Gonzales realizes he has left some papers at home and asks how he can get 

them to her. She says he can fax them, but he doesn’t have a fax machine, or he 

can copy them and send them to her. He leaves the office; it is now late in the day 

and he is having trouble breathing. He will go to a copying place tomorrow, if he 

is feeling up to it. If, for some reason like illness or another emergency intervening, 

he fails to send the papers back to her, his case will be closed for failure to follow 

up. He is fortunate that he speaks and reads English because he was able to find 

the program to help him, something that millions of beneficiaries are not able to 

do. If Mr. Gonzales is found eligible for benefits, he will have to requalify each year 

by completing forms and documenting his income and resources again. 

Mr. Gonzales’ story is not nearly as complicated as those of other low-income 

beneficiaries, who might be sicker, less literate, not speak English, not have a telephone or in other ways be less able to find the program and take the steps needed 

to enroll in it, but nevertheless, it demonstrates the extreme demands placed on 

those attempting to qualify for necessary benefits and support, often at a time when 

they actually need health care. 

Mr. Chairman and distinguished members, I ask that we make our policy and implementation goals the creation of parity between wealthier Medicare beneficiaries 

and low-income beneficiaries in ease of enrollment in health insurance programs 

Right now, the burden is much heavier on those who are poorer and sicker and far 

less able to endure the rigors of complex processes. 

Most of the rest of my testimony will suggest ways to move toward that parity 

by expanding benefits and aligning eligibility rules of the programs, by improving 

identification of and outreach to beneficiaries, and by addressing enrollment challenges. I will also comment briefly on issues that arise for beneficiaries who are enrolled in these programs in using those benefits. 


joloto on DSKB35BYQ1 with HEARING
92 

1 Edwin Park and Robert Greenstein, ‘‘Low-Income and Minority Beneficiaries Do Not Rely 

Disproportionately On Medicare Advantage Plans: Industry Campaign to Protect Billions in 

Overpayments Rests on Distortions.’’ Center on Budget and Policy Priorities, April 12, 2007 at 

2. 2The QDWI program, enacted in 1989, is little used and is not part of the discussion in this 

testimony. 3 Report of the Study Panel on Medicare/Medicaid Dual Eligibles, ‘‘Improving the Medicare 

Savings Programs,’’ National Academy of Social Insurance June 2006. http://www.nasi.org/ 

usrldocImprovinglthelMedicarelSavingslPrograms.pdf (last visited April 29, 2007). 4 Congressional Budget Office, ‘‘A Detailed Description of CBO’s Cost Estimate for Medicare 

Prescription Drug Benefit.’’ July 2004 http://www.cbo.gov/showdoc.cfm?index=5668&sequence=0 

(last visited April 30, 2007). 

Medicaid 

But before I talk about MSP and LIS, I want to remind us all that the program 

that most comprehensively serves low-income Medicare beneficiaries is Medicaid. 

Medicaid was passed in 1965 as a companion to Medicare, in large part to act as 

a supplement to Medicare’s coverage for older people. More than 6 million Medicare 

beneficiaries get, through Medicaid, such services as long-term care, dental care, 

foot care, and eye care that are not available under Medicare. They get Medicare 

Part B premiums paid for them. Until 2006, they got prescription drugs from Medicaid. Now, their Medicaid status entitles them to the full Part D low-income subsidy. Medicaid is the single largest program of extra assistance to low-income Medicare beneficiaries, serving more people with more extensive benefits than, for example, Medicare Advantage plans.1 Its creation, early on, is a recognition that Congress has long been concerned about assuring access to care for this very vulnerable 

population. 

Low-Income Beneficiaries and Other Programs to Help Them 

Medicaid recipients and other low-income Medicare beneficiaries are frailer, more 

disabled, higher users of health services, have less education, and are more likely 

to be minorities, more likely to be females, more likely to live alone or in an institution than better off beneficiaries. Over the past two decades, beginning in 1986, 

Congress has responded to their health care needs by creating programs to increase 

their access to care. These are the programs we know today as the ‘‘Medicare Savings Programs’’ (Qualified Medicare Beneficiary or QMB, Qualified Disabled and 

Working Individual or QDWI,2 Specified Low-Income Medicare Beneficiary or 

SLMB, Qualified Individual or QI) and the Part D Low-Income Subsidy or LIS. 

Medicare Savings Programs 

The Medicare Savings Programs are operated through state Medicaid programs. 

The benefits are Medicaid benefits, paid for with federal and state dollars, using 

each state’s Medicaid matching rate for federal financial participation. In determining eligibility for benefits, states must use at least the federal standards for 

measuring income and resources, but are allowed to be more generous. States differ 

in the ways they choose to be more generous, if at all. 

The salutary effects of Medicaid and Medicare Savings Programs on low-income 

beneficiaries were noted by the National Academy of Social Insurance (NASI) in its 

June 2006 report ‘‘Improving the Medicare Savings Program.’’ 3 NASI cites the 

Medicare Payment Advisory Commission’s (MedPAC) finding that while 23% of 

Medicare-only beneficiaries report that they delay seeking medical care because of 

costs, only 8% of those with Medicaid so report. Other research cited by NASI finds 

that QMB enrollees, for whom Medicaid assumes responsibility for all Medicare 

cost-sharing, are half as likely as non-enrollees to avoid visiting a doctor because 

of concern about cost. (NASI 2006) 

Despite the identified health benefits associated with these programs, participation rates for MSPs have been abysmal (33% for QMB-only, 13% for SLMB-only, according to the Congressional Budget Office 4). Barriers to MSP enrollment, which 

have been documented in countless studies and reports over the past nearly two 

decades, include health, literacy, language and transportation deficits of the target 

population; lack of awareness of the programs on the parts of potential beneficiaries, 

community-based organizations and agency workers; and the complexity of eligibility rules and enrollment processes, including requirements to report and document assets and, in some cases, requirements, such as Mr. Gonzales experienced, 

for face-to-face interviews with eligibility workers. 

Differences between the Part D Low-Income Subsidy and Medicare Savings Programs 

Part D’s fully federal low-income subsidy and its implementation were modeled 

on MSPs, with slight, but nonetheless significant, differences. These differences, or 


joloto on DSKB35BYQ1 with HEARING
93 

5For a detailed discussion of these differences, see Patricia B. Nemore, Jacqueline A. Bender 

and Wey-Wey Kwok, ‘‘Toward Making Medicare Work for Low-Income Beneficiaries: A Baseline 

Comparison of the Part D Low-Income Subsidy and Medicare Savings Programs Eligibility and 

Enrollment Rules.’’ Kaiser Family Foundation May 2006. 6 ‘‘Medicare: Prescription Drug Coverage Among Medicare Beneficiaries,’’ Kaiser Family Foundation June 2006. Source: HHS, June 14, 2006. www.kff.org/medicare/upload/7453.pdf (last 

visited April 28, 2007). 7Dahlia K. Remler and Sherry A. Giled, ‘‘What Other Programs Can Teach Us: Increasing 

Participation in Health Insurance Programs,’’ The Commonwealth Fund, May 2003. 8See National Council on Aging, ‘‘Cost-Effective Strategies for Finding and Enrolling Low-Income Medicare Beneficiaries in the Limited Income Subsidy (LIS) And Other Key Public BeneContinued 

non-alignments, make it difficult to assure that low-income Medicare beneficiaries 

get all the benefits that will best help them gain access to the health care they need. 

Differences include: 

• LIS applications can be taken at both the state Medicaid agency and at the 

Social Security Administration; MSP applications are taken only at the state 

Medicaid office. • LIS applications can be submitted on-line; this is true only in a few states 

for MSPs. • LIS applicants can certify to the truth of the statements in their applications, 

without having to provide documentation with the application; this is true 

only in some states for MSPs. • LIS application process does not require a face-to-face interview; a few states 

do for MSPs. • LIS income and resource counting rules are uniform throughout the country; 

MSP rules vary by state. • LIS resource levels are higher than those of most states’ MSPs and the income level for the partial LIS subsidy is higher than that of MSP in all but 

two states. • LIS does not count non-liquid assets such as vehicles and equipment; MSPs 

vary by state. • LIS does not seek to recover benefits from the estates of deceased beneficiaries; in some states, MSP benefits are recovered. • LIS is effective the first day of the month in which an individual expresses 

an interest in applying; the MSP QMB benefit is effective only the first day 

of the month after a beneficiary’s eligibility has been determined; SLMB and 

QI can be effective up to three months prior to the month of application, if 

the beneficiary was eligible in those months. • LIS measures income against the poverty level for the actual size of the applicant’s family; MSPs in most states use a measure of one or two person families only.5

It was hoped and perhaps expected by policy makers and advocates that the 

streamlined enrollment process and higher income and resource eligibility standards 

of the LIS would help overcome some of the barriers that have plagued MSP enrollment over the years. Yet enrollment numbers tell us something different. More than 

3 million of the estimated 13.2 million thought to be eligible for the low-income subsidy have not applied for the benefit; indeed only 14% of those CMS estimates are 

eligible for the benefit have enrolled through the processes created for applying for 

LIS. 

By contrast, nearly 8.5 million people, or 80% of those who were receiving LIS in 

June 2006 received it because they are deemed eligible by virtue of their enrollment 

in full Medicaid, a Medicare Savings Program, or the federal income benefit, Supplemental Security Income (SSI) and did not have to take any action themselves to get 

it. 6

This ‘‘automatic’’ enrollment, through deeming by virtue of eligibility for another 

benefit, corresponds more closely to my husband’s experience of signing up for Medicare Parts A and B than it does to Mr. Gonzales’ experience of trying to get MSP 

benefits in New York. In fact, we know that Medicare Parts A and B have among 

the highest participation of any benefit programs (99% and 95.5% respectively, according to one source 7); eligibility for Part A is automatic for most beneficiaries; for 

Part B, beneficiaries must opt out if they do not wish to participate. 

This knowledge suggests that while we might take many steps toward improving 

participation rates, the ones that will be most effective are those that put the least 

burden on the beneficiary, just as signing up for Medicare placed little burden on 

my husband.8 This, in turn, suggests a stronger federal role in MSP and expanded 

federal screening opportunities for LIS, which I will discuss further. 


joloto on DSKB35BYQ1 with HEARING
94 

fits’’ for discussion of creative state strategies to reach across programs to identify and enroll 

beneficiaries in low-income programs. Submitted as Appendix to Testimony of Howard Bedlin 

before U.S. Senate Special Committee on Aging, January 31, 2007. Copies are available through 

pnemore@medicareadvocacy.org. 9For discussions of the effects of the asset test on Medicare Savings Programs and on the 

LIS, see NASI, supra note 2, Thomas Rice, PhD and Katherine A. Desmond, M.S. ‘‘Low-Income 

Subsidies for the Medicare Prescription Drug Benefit: The Impact of the Asset Test,’’ prepared 

for the Henry J. Kaiser Family Foundation, April 2005; Laura Summer and Lee Thompson, 

‘‘How Asset Tests Block Low-Income Medicare Beneficiaries from Needed Benefits,’’ The Commonwealth Fund, May 2004; Laura Summer and Robert Friedland, ‘‘The Role of the Asset Test 

in Targeting Benefits for Medicare Beneficiaries,’’ Commonwealth Fund, October 2002; Marilyn 

Moon, Robert Friedland and Lee Shiry, ‘‘Medicare Beneficiaries and Their Assets: Implications 

for Low-Income Programs,’’ Henry J. Kaiser Family Foundation, June 2002. 

First, I would like to talk about program expansions and modifications that will 

promote ease of enrollment. 

Expanding Program Benefits 

Make the Qualified Individual program (135% FPL) permanent and align 

MSPs with LIS income levels. 

The QI program, originally scheduled to sunset in 2002, has been extended for 

short periods of time over the past five years. Each time it is scheduled to end, 

states and beneficiaries suffer great turmoil with the uncertainty of its existence. 

Congress, in setting the full LIS benefit at 135% FPL, established that level as a 

minimum for full benefits. MSPs should be amended to reflect that development in 

Congressional thinking. 

Several approaches have been discussed among advocates and policy makers to 

achieve this. One is to roll the QI program into the SLMB program, so that QMB 

would go to 100% FPL and SLMB would go to 135% FPL. The 135% aligns them 

with the LIS full subsidy; the partial subsidy would remain at 150%, with no corresponding MSP. 

A variation on increasing SLMB to 135% FPL, suggested by NASI in its 2006 report, is to increase QMB to 135% FPL so that those who receive the full subsidy 

for LIS under Part D would also get full cost-sharing assistance for Parts A, B and 

C. This approach is the most logical one, again reflecting Congress recognition that 

people with this amount of income need full benefit assistance, not merely help with 

their Part B premiums, as SLMB provides. Under this approach, QMB and full LIS 

would be aligned vis a vis income; SLMB might be expanded to 150% FPL to align 

with the partial LIS. 

Make QMB benefits retroactive to three months before application. 

This is a relatively small change that could be very significant for beneficiaries. 

Currently, QMB is the only Medicaid program that does not provide retroactive coverage to three months prior to application if the beneficiary was eligible during 

those months. In fact, QMB coverage is available only beginning the month after 

eligibility has been determined. The significance of this is that many beneficiaries 

become aware of programs at the point of need (see NASI study), i.e. when they are 

using health benefits. They will need the benefit to pay for the services they are 

receiving; if it cannot be granted with retroactive coverage, it is less valuable to 

them. 

Expand and align, or eliminate the assets test. 

For years, advocates and researchers have identified assets tests as a barrier to 

benefits for several reasons.9 To meet the test itself, beneficiaries must engage in 

time consuming and sometimes complex documentation of the value of various 

things they own, from bank accounts to vehicles to other property, other than their 

home. This process results in administrative costs to agencies processing applications and can result in beneficiaries being denied, not for being over assets but for 

failure to complete the process, such as might have happened to Mr. Gonzales if he 

didn’t get his papers back to the caseworker. Moreover, some potential beneficiaries 

are unwilling to divulge their assets to anyone and will forego benefits rather than 

having to reveal the value of what they own. 

As part of a program (such as MSP) whose income eligibility increases each year 

with new poverty guidelines, the MSP asset test (like those in other parts of Medicaid) is especially unfair because it is not indexed. Thus, while income limits for 

100% FPL have nearly doubled since 1988 when the QMB program became mandatory ($5,770 in 1988 to $10,210 in 2007 for one person), the asset level has remained 

the same over that 20 year period. Once again, Congress has finally recognized the 


joloto on DSKB35BYQ1 with HEARING
95 

10Moon, supra note 9. 11Summer and Friedland, supra note 9. 12Social Security Administration, ‘‘LIS Denial Studies,’’ 12/11/06. 13See ChipCentral chart on SCHIP eligibility at http://www.chipcentral.org/lcatdisplpage. 

cfm?LID=121 (last visited April 28, 2007). See also Donna Cohen Ross and Caryn Marks, ‘‘Resuming the Path to Health Coverage for Children and Parents: A 50 State Update on Eligibility 

Rules, Enrollment and Renewal Procedures, and Cost-Sharing Practices in Medicaid and SCHIP 

in 2006,’’ The Kaiser Commission on Medicaid and the Uninsured, January 2007 at http:// 

www.kff.org/medicaid/upload/7608.pdf (last visited April 28, 2007). 14 AZ, AL, DE, ME, MS, VT. In addition, MN has raised its asset limit to $10,000. 15 By basic MSP, I mean MSP based on federal rules, rather than the varying more liberal 

rules used by the states. Such a screen and enroll by SSA would capture many MSPs; those 

found ineligible through this process could be referred to their states for further consideration. 

unfairness of an unindexed asset level; the LIS level changes each year according 

to the Consumer Price Index. 

The asset test excludes many low-income beneficiaries. In 2002, researchers identified that 40% of all Medicare beneficiaries, not just those with low-incomes, had 

assets less than $12,000.10 Other research, reported the same year, identified that 

only 48% of those who met the income requirements in effect that year also met 

the asset requirements.11 Modest assets exclude many people from program benefits: SSA found that about 40% of those who did not qualify for LIS in 2006 were 

over assets, but the average total amount of assets of those disqualified was only 

about $25,000.12 Most State programs for pregnant women and children do not consider assets at all in determining eligibility for help with medical care.13 Only six 

states have eliminated the asset test for MSPs.14

The most streamlined way to proceed would be to eliminate the asset test for both 

programs. This approach, coupled with increasing QMB or SLMB to 135% of FPL 

would bring the two programs into closest alignment and make cross-deeming easy 

and logical. Mr. Doggett’s bill proposes to increase the assets test to $27,500 for the 

partial subsidy. This level, indexed, would capture many of those denied eligibility 

in 2006 due to being over assets. The bill includes changes to counting assets, described earlier, to eliminate consideration of life insurance and of retirement accounts. Such modifications will be important if the asset test is not eliminated. Any 

asset test, however, retains the barriers of administrative complexity and beneficiary reluctance to divulge information. I know Mr. Doggett is aware of those limitations. 

Closer alignment would, in turn, make screening and enrolling at either a Medicaid office or a Social Security office more efficient and effective. 

Screening, Enrolling, and Deeming 

Screen and Enroll. Mr. Doggett’s legislation, H.R. 1536, includes an important 

provision to expand screening: a requirement that CMS inform all new Medicare 

beneficiaries of the Part D LIS and give them an opportunity to be screened for the 

benefit, including through the use of IRS data about income and assets. Mr. Doggett 

also proposes to have SSA screen all LIS applicants for MSP eligibility. The next 

step is to determine a streamlined way to enroll them. 

Screen (and enroll when eligible) all SSI applicants. Even under current law and 

program rules, the Social Security Administration could screen for LIS and basic 

MSP15 all applicants (or at least those 65 and older) for SSI who are found ineligible for that benefit. While SSA already does this screening for those who are Medicare beneficiaries, some applicants may not have Medicare because they didn’t 

‘‘earn’’ it through quarters of coverage and they cannot afford the Part B premium. 

If they were found eligible for MSP, they could then get Medicare and be eligible 

for Part D and deemed eligible for LIS. According to NASI, SSA already screens for 

MSP eligibility, but it does not enroll beneficiaries in those programs. It refers them 

to their state Medicaid agency; advocates report that requiring this entire second 

process makes it unlikely that beneficiaries will follow up. SSA’s experience, as reported by NASI, confirms this view. In addition to requiring screening for unsuccessful SSI applicants, the law could be amended to provide for automatic QMB eligibility for all SSI recipients. 

Cross-deem. Under current law and implementation, all MSP beneficiaries are 

deemed eligible for LIS without having to file an application; the same is not true 

for LIS enrollees to receive MSP. Even without the proposed expansions described 

above, Congress could allow for cross-deeming that would improve enrollment in 

both programs by assuring that whichever ‘‘door’’ to eligibility beneficiaries entered, 

if found eligible for one program, they would also receive the benefits of the other. 

Avoid adverse consequences. Any process that deems or auto-enrolls beneficiaries 

into a public program must include the assurance that the beneficiary will be proVerDate Sep 11 2014 16:28 Jun 24, 2016 Jkt 089561 PO 00000 Frm 00099 Fmt 6633 Sfmt 6621 I:\WAYS\OUT\89561.XXX 89561

joloto on DSKB35BYQ1 with HEARING
96 

16The plight of medically needy Medicaid recipients is particularly complex and difficult with 

respect to Part D and the LIS. The medically needy must show their state that they have accrued certain medical bills before they are entitled to Medicaid. Once they have accrued their 

‘‘spend down’’ amount, Medicaid will pay the rest of their health care costs for a certain period 

of time, usually between one and six months. A medically needy person who met spend down 

at any time in 2005 was deemed eligible for LIS for all of 2006. But if they had met spend down 

in 2005 with high prescription drug bills, they did not have those bills for 2006 because of LIS. 

So they may have lost Medicaid in 2006 and thus not have been deemed for LIS for 2007. If 

they do not know to apply for LIS, or if they do not qualify, they will again have high drug 

bills in 2007, requalify for Medicaid and likely then be deemed eligible for LIS for 2008 (at least, 

if they are on the Medicaid rolls in the months that CMS looks at them to determine who will 

be deemed eligible for LIS. This roller coaster eligibility for Medicaid and LIS would be substantially mitigated, if not fully resolved, if the amount Medicare pays for the LIS counted toward 

their medically needy spend down. 17Section 1144 of the Social Security Act directs SSA to identify Medicare beneficiaries potentially eligible for MSPs and LIS and to communicate that information to those beneficiaries and 

to the state in which they reside. The information upon which SSA makes such determinations 

does not include non-federal sources of income, nor does it include any estimate of resources. 

tected from losing other public benefits as a result of the program. With respect to 

MSPs, this would require amending the law to ensure that MSP benefits are not 

subject to Medicaid estate recovery requirements, as they currently are at the option 

of the state. With respect to LIS, a change in the law might assure that so-called 

medically needy Medicaid recipients would not cycle on and off Medicaid and the 

low-income subsidy from year to year.16

Other Steps to Improve Program Participation 

Additional steps to improve enrollment and continued participation might be categorized as: 

• Identifying/reaching out to beneficiaries and providing help with applications, 

and • Simplifying enrollment and redeterminations. 

Identify, Reach Out, and Help Beneficiaries 

Advocates believe that potential beneficiaries could most accurately be identified 

through IRS data; Mr. Doggett’s legislation proposes a one-time review of IRS data 

for current Medicare beneficiaries to improve identification of low-income beneficiaries, with a prospective use of the data, for new beneficiaries, only with their 

permission. IRS data would more precisely target potential beneficiaries who are, 

under current law, identified by SSA only by reference to their sources of federal 

income (from Social Security, Railroad Retirement, Civil Service and Veterans).17

While it is important to notify beneficiaries of their entitlement to benefits that 

can help them, experience tells us that a letter informing individuals of a benefit 

and how to apply for it, without more, has limited success. To the extent that beneficiaries must continue to be faced with the challenges of navigating complex eligibility rules and requirements, federal funds must be provided either directly to the 

entities that are the ‘‘trusted’’ source for specific hard to reach populations, or to 

states to provide grants to such entities, so that those entities can help potential 

eligibles apply for benefits. Congress, SSA and CMS should explore the possibilities 

of providing private, non-profit beneficiary-oriented ‘‘trusted sources’’ with specific 

beneficiary identifying information, by zip code to promote enrollments. 

Simplify Enrollment and Redeterminations 

Application 

• In-kind support and maintenance. The LIS application asks for information 

about help the applicant gets from other family members—what SSA calls In 

Kind Support and Maintenance (ISM). The question is confusing and advocates report from experience that clients often don’t understand what is being 

asked of them and give wrong answers that may disqualify them. Moreover, 

the consideration of ISM in determining eligibility provides a disincentive for 

families to help their members. More than a third of the states have eliminated this inquiry from their MSP eligibility considerations. SSA could probably do the same under existing law through the Medicare Act of 2003’s directive to it to create a simple application process. • Value of life insurance. Similarly, SSA asks applicants to report the cash surrender value of life insurance, an amount that is not known from the face 

value of the policy. Advocates believe this question poses a stumbling block, 

slowing down the application completion while the beneficiary tries to figure 

out how to find out what is asked of her or him. Moreover, research shows 


joloto on DSKB35BYQ1 with HEARING
97 

18Laura Summer and Lee Thompson, supra note 9. 

that about one-third of people with incomes at the poverty level would be disqualified because they have a life insurance policy above the allowed amount 

of $1,500.18 Some states have eliminated this requirement for MSPs; others 

allow a higher amount of life insurance. SSA could probably eliminate this 

requirement for LIS under existing authority; it has already exercised discretion to modify the SSI rules to which LIS is linked by not counting non-liquid 

resources. Mr. Doggett’s bill would eliminate consideration of life insurance 

for LIS; it would also eliminate consideration of retirement accounts in determining eligibility. This provision creates parity between those whose retirement benefits are through a company pension program (value not counted for 

LIS) and those whose benefits are primarily from an Individual Retirement 

Account or a 401(k) type account (value counted for LIS). While states are 

free to eliminate consideration of both of these resources, they are not required to do so. Better aligning MSP and LIS would require legislation addressed to this issue for both programs. 

• Attestation under penalty of perjury. While SSA’s LIS application does not require documentation of the information provided, its attestation clause is 

overly precise and frightening. It suggests to applicants that if they make an 

honest mistake, or forget to include some requested information, they can go 

to prison. This language should be softened. 

• Authorization of information sharing between SSA and states. Currently, SSA 

plans to send brief identifying information about LIS applicants to states to 

allow them to screen for MSP eligibility. But the information to be provided 

is not precise enough for the state to determine eligibility without finding the 

potential beneficiary. SSA’s LIS application could include a check off box by 

which the applicant authorizes SSA to share details of the application with 

the state so the applicant can be screened for other benefits. 

Eliminate Estate Recovery for MSP Benefits 

Nearly half the states require recovery of MSP benefits from the estates of deceased beneficiaries; federal law authorizes but does not require this. Estate recovery has long been identified as a barrier to enrollment for MSPs. Its elimination 

would promote greater interest in the benefits and make various automatic enrollment opportunities more salient. As noted above, it is essential to make this change 

if beneficiaries are automatically enrolled in MSP programs through other connections. 

Redeterminations 

The law requires the Commissioner of SSA to re-determine eligibility for the subsidy at least once after initial determination and after that, as he determines necessary. Advocates encourage programs to use processes that require the least 

amount of response from a beneficiary. SSA sent beneficiaries letters asking them 

if their circumstances had changed and if not, they were not required to do anything 

more. Once the initial redetermination is completed, SSA might consider, as it has 

authority to do, requiring nothing more of beneficiaries than that they report 

changes in circumstances. 

Additional paths exist for requalifying for LIS can be confusing, especially for 

those whose circumstances fluctuate over the course of a year. Those who were 

deemed eligible for LIS—that is, those who are also enrolled in Medicaid, a Medicare Savings Program, or SSI—were re-deemed for 2007 if they were on the rolls 

in one of these programs in July of 2006. If they had been eligible earlier in the 

year, but not in July, they were informed they would not be deemed again and sent 

an application to apply for LIS through SSA. If they became eligible through Medicaid, MSP or SSI later in the year, they were once again deemed. So much moving 

in and out of deemed status, and having applications pending results in errors in 

plans’ and pharmacies’ knowledge of the correct cost-sharing to apply to beneficiaries. This, in turn, results in beneficiaries being unable to get drugs because 

they cannot afford the non-LIS co-pays charged. 

When a Medicaid beneficiary loses eligibility for Medicaid benefits, states have an 

obligation under Medicaid law to determine if that person is eligible under another 

category of the state’s program. For example, someone losing Medicaid eligibility 

might, nonetheless, still be eligible for a Medicare Savings Program, since these income and resource limits are higher than Medicaid in most states. If states routinely undertook these new determinations of eligibility for other Medicaid benefits 

before terminating people from the program, fewer LIS recipients would find themVerDate Sep 11 2014 16:28 Jun 24, 2016 Jkt 089561 PO 00000 Frm 00101 Fmt 6633 Sfmt 6621 I:\WAYS\OUT\89561.XXX 89561

joloto on DSKB35BYQ1 with HEARING
98 

19DHHS, Health Care Financing Administration, Medicaid Letter Number: 00–09, Subject: 

Medicaid Obligations to Pay Medicare Cost-sharing Expenses for Qualified Medicare Beneficiaries in Medicare Health Maintenance Organizations or Competitive Medical Plans or Medicare Plus Choice Organizations—INFORMATION. August 2, 2000. Available from pnemore@ 

medicareadvocacy.org. 

selves in the limbo of not knowing about their LIS status. Similarly, even for those 

individuals no longer eligible for any benefits under the state Medicaid program, the 

state or the Social Security Administration (SSA) could undertake independently to 

determine their eligibility for the LIS, the income and resource limits for which are 

higher than those of most states’ Medicaid programs. 

CMS could remind states of their obligation to screen for eligibility for other Medicaid programs when a recipient loses Medicaid in one category and monitor their 

compliance. Congress could amend the law, if necessary, to require states to undertake independent determinations of LIS eligibility when a beneficiary loses benefits 

under the state Medicaid program. 

Making the Benefit Better for Those who are Enrolled 

While I know the Committee’s focus for this hearing is on opportunities to increase enrollment and expand eligibility, it is impossible for me not to talk about 

ways to improve the benefits themselves, both so that they are perceived to be valuable and so that they are valuable. Three areas warrant particular attention: 

• Failure of LIS co-pay information to be available at the pharmacy 

• Lack of clarity about whether and how states pay cost-sharing for QMBs in 

Medicare Advantage plans and 

• Lack of clarity about Medicare providers’ obligation to serve QMBs without 

charging them cost-sharing or balance billing. 

LIS Fails To Be Available at the Pharmacy Counter 

Too often low-income beneficiaries with full LIS arrive at the pharmacy to discover that the pharmacist does not have access to their correct co-pay level. Some 

of these beneficiaries take 20 medications, or have co-pays for one prescription of 

over $500. They often leave without the medication(s). The lucky ones find advocates who will work the system for them and get the problem corrected. Even ‘‘corrected’’ problems are sometimes only corrected for the transaction at hand; the same 

problem occurs when the beneficiary seeks to fill another script. 

The failure of LIS eligibility and co-pay level to be available at the pharmacy is 

among the most common complaints we hear both directly from beneficiaries and 

from advocates around the country. It happens in part because of the lack of real 

time information exchange among all parties to a Part D transaction for low-income 

beneficiaries: states, CMS, SSA, the Part D plan and independent contractors who 

track LIS information. It also results from plans’ failure to follow CMS policies 

which direct them to use the best available information to determine proper costsharing amounts. 

There Is a Lack of Clarity About Whether and How States Pay Cost-Sharing 

for QMBs in Medicare Advantage Plans 

CMS policy directs that states pay copayments for QMBs in Medicare Advantage 

plans.19 But states do not necessarily have systems to fully identify all the benefits 

in the plan in which a QMB is enrolled, nor do they all have systems for paying 

either the plan or the plan’s providers any copayments required under the plan. 

Correcting this lack of clarity and oversight for QMBs in MA plans will improve 

the benefit for all such individuals. It will also mitigate the damage done by marketing scams where agents of health plans go door-to-door at senior housing facilities to solicit enrollment in MA plans, enroll beneficiaries with diminished capacity 

or limited English proficiency, or enroll beneficiaries in an MA–PD when they wanted to enroll in a PDP. Under such circumstances, low-income beneficiaries end up 

in plans they did not intend to choose. Moreover, we know that, while MA plans 

purport to provide better and more benefits than original Medicare, their relative 

value depends in large measure on what services are used. We know of plans, for 

example, that have $90/day co-pays starting at day 4 of a skilled nursing facility 

benefit; under original Medicare, by contrast, days 1–20 have no cost-sharing at all. 

Some plans charge 25–30% coinsurance on Part B-covered drugs, which are often 

expensive. Such a coinsurance would be unaffordable to someone with $850/month 

income, as a QMB would have. Cost-sharing assistance would be critical to making 

the benefit work. CMS must assure that states have systems to identify QMBs in 

MA plans and to pay their cost-sharing. 


joloto on DSKB35BYQ1 with HEARING
99 

20State Medicaid Manual, Part 3 Eligibility Section 3490.14 B at http://www.cms.hhs.gov/ 

Manuals/PBM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder= 

ascending&itemID=CMS021927& intNumPerPage=10 (last visited April 23, 2007). 21 Report to Congress, State Payment Limitations for Medicare Cost-Sharing, Tommy G. 

Thompson, Secretary of Health and Human Services 2003, transmitted by letter of May 20, 2003 

to Speaker of the House of Representatives, J. Dennis Hastert. 

There Is a Lack of Clarity About Medicare Providers’ Obligation To Serve 

QMBs Without Charging Them Cost-Sharing Or Balance Billing. 

Medicare does not permit providers to pick and choose for which Medicare beneficiaries they will bill Medicare and for which they will bill privately. If they take 

care of a patient with Medicare, they must bill Medicare and can bill the beneficiary 

only the remainder up to the Medicare allowed amount. For a person with QMB, 

the beneficiary’s portion is paid by the state, or in some cases, not at all. It is not 

the responsibility of the person with QMB. CMS policy, however, seems to permit 

providers to decide that they will serve a person with QMB as a private pay patient 

and not bill Medicare at all.20

This policy, together with a provision of law that permits states to forego paying 

the person with QMB’s share of cost-sharing if the state’s Medicaid payment for the 

same service is less than what Medicare has paid has resulted in people with QMB 

being denied access to health care providers, according to a federally-mandated 

study released in 2003.21 Perhaps Congress could direct CMS to correct its policy 

of allowing providers to bill people with QMB as private patients; such action would 

promote greater access to health care providers for people with QMB and make the 

benefit more valuable. 

Conclusion 

In summary, we recommend that Congress expand the benefits, make the enrollment processes easier, with greater emphasis on deeming and other nearly automatic methods of enrollment and promote improved implementation of both programs, so that low-income beneficiaries can actually use the benefits once they are 

enrolled. 

I thank the members of this Subcommittee for an opportunity to speak on behalf 

of the Center for Medicare Advocacy and the thousands of beneficiaries we represent. I look forward to working with you further on these important matters. 

May 3, 2007 

Appendix 

Medicare Savings Programs (MSPs) 

Basic Subsidy Eligibility: 

• Qualified Medicare Beneficiary (QMB). Income at or below 100% federal poverty level (FPL) ($10,210/year in 2007); resources at or below $4,000/individual or $6,000/couple. 

• Specified Low-Income Medicare Beneficiary (SLMB). Income at or below 120% 

FPL ($12,252/year in 2007); resources as QMB. 

• Qualified Individuals (QI). Income at or below 135% FPL ($13,784/year in 

2007); resources as QMB. 

Indexing: Income levels change each year when federal poverty levels are announced between January and March; states must use the new levels by July 1. 

Asset levels are not indexed. 

Income/Resource Counting Rules: Start with rules for Supplemental Security Income program, but states, under a statutory provision known as 1902(r)(2), can use 

more liberal rules. 

Enrollment Path: The State Medicaid Agency. 

Payment: Federal and state dollars. MSP benefit is medical assistance, eligible for 

the state’s matching rate for federal financial participation (FFP). FFP for administrative costs is 50%. 


joloto on DSKB35BYQ1 with HEARING
100 

2007 Medicare Savings Program Groups 

Category Year 

Enacted 

Income 

Limit Resource Limit Medicaid Pays Entitlement 

Qualified Medicare 1988 100% 200% of SSI limit Part B premium; Yes 

Beneficiaries (QMBs) poverty ($4,000/individual, Part A premium, if 

$6,000/couple) any; all deductibles 

and coinsurance 

Specified Low-Income 1990 120% of 200% of SSI limit Part B premium; Yes 

Medicare Beneficiaries poverty ($4,000/individual, only 

(SLMBs) $6,000/couple) 

Qualifying Individuals 1997 135% of 200% of SSI limit Part B premium; No 

(QIs) poverty ($4,000/individual, only $6,000/couple) 

Chart Source: ‘‘Report of the Study Panel on Medicare/Medicaid Dual Eligibles: Improving the Medicare Savings Programs,’’ National Academy of Social Insurance, June 2006 

Medicare Part D Low-Income Subsidies (LIS). 

Basic Subsidy Eligibility: Full subsidies for beneficiaries with incomes at or below 

135% of federal poverty levels (FPL) ($13,784/year in 2007); resources up to $7,620/ 

individual and $12,190/couple in 2007. Partial subsidies for those with incomes at 

or below 150% of FPL ($15,315/year in 2007); resources of not more than $11,710/ 

individual or $23,410/couple in 2007. 

Indexing: Income levels based on federal poverty levels announced between January and March; increases retroactive to January. Asset levels adjusted prior to January, based on the Consumer Price Index. 

Income/Resource Counting Rules: Generally, those of Supplemental Security Income (SSI) program. 

Enrollment Paths: 

• Deemed status. For those who receive benefits of full Medicaid (dual eligibles), Medicare Savings Programs (QMB, SLMB, QI), or SSI. 

• SSA door. By application, through a local SSA office, through the SSA tollfree number, or through the SSA website at www.socialsecurity.gov. 

• Medicaid agency door. By application at the state Medicaid agency. If a beneficiary applies for LIS with the state, the state must also screen for MSP and 

other Medicaid benefits. 

Payment: Benefit is all federal dollars. When states enroll beneficiaries, the states 

are paid at the Medicaid administrative match rate of 50%. 


joloto on DSKB35BYQ1 with HEARING
101 

2007 Low-Income Subsidy Groups and Costs 

Out-ofPocket 

Costs 

Standard 

Benefit 

Group 1 Group 2 Group 3 Group 4 

Dual Eligibles MSP Income ≤ 135% Income ≤ 150% (QMB, SLMB, FPL FPL 

QI) Resources Resource SSI w/o 

Medicaid Below Below 

$7,620/$12,190 $11,710/$23,410 

Premium Varies by plan $0 $0 $0 Sliding scale: 

($27.35 

national $0 up to 

average in ‘‘benchmark’’ 

2007) 

(Based on income) 

Deductible $265 per year $0 $0 $0 $53 

Cost Up to $3850 Co-pays: $2.15/$5.35 co- $2.15/$5.35 co- 15% coinsurance 

Sharing* out-of-pocket pay pay $0 if .

institutionalized . $1/$3.10e ≤ 100% FPL . $2.15/$5.35>100% FPL 

Catastrophic.Greater of 5% $0 $0 $0 $2.15/$5.35 co-pay 

or $2.15/$5.35 

Coverage co-pay 

* Individuals in the four LIS groups do not have the ‘‘Donut Hole’’ gap in coverage. 

f 

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 8 grown children and 54 great 

grand’s and 18 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, 


joloto on DSKB35BYQ1 with HEARING
102 

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:] 

Prepared Statement of Emelia Santiago Herrera, Moore Consulting Group, 

Inc., Orlando, Florida 

Thank you Chairman Stark, Ranking Member Camp and Subcommittee Members. 

My name is Emelia Santiago Herrera and I am from Orlando, Florida. I am an 

81 year-old mother to 8 children, a grandmother to 54 children and a great-grandmother to 18 children! 

I’ve had 5 heart attacks and 3 strokes, so I have health problems and need assistance. I am a low-income Medicare beneficiary and receive low-income benefits. I am 

enrolled in a Medicare Advantage plan with prescription drug coverage and receive 

the full Part D low-income subsidy. 

I received information about Evercare and other Medicare Advantage plans in my 

‘‘Medicare & You’’ Handbook. My friend told me to ‘‘Go with Evercare, they treat 

you with dignity and respect!’’ I called to see about enrolling in a plan and an 

Evercare representative came to my house to discuss my different options and go 

over everything with me. I then decided to listen to my friend’s advice and enroll 

in an Evercare plan. I have not regretted it, I love Evercare and appreciate all the 

benefits I receive and depend on. 

My Evercare Plan provides me with disease management, preventative care and 

nutritional assistance. Evercare is available to take me to the doctor 10 times a 

year, they give me diabetic shoes that would normally cost $50 per inch, and a foot 

doctor comes to my house to clip my toe nails to avoid complications with diabetes. 

Evercare goes grocery shopping for me, and to help manage my diabetes, I have 14 

meals delivered to my house every month. Someone from Evercare even comes to 

my house to clean twice a week! 

To top it all off, someone from Evercare comes and checks on me every three 

months to make sure I am being treated well by the Evercare representatives. 

Since I am low-income, all of the services I receive are just a blessing. I used to 

pay a $9 co-pay for my prescription drugs but now I don’t pay anything at all because of the extra help I receive. Even though I am a low-income senior, they treat 

me like a queen and I don’t know what I would do without them and all the benefits 

of this plan! It is for all of these reasons: disease management, preventative care, 

nutritional assistance and especially the no co-pay, I don’t have to live in an assisted living home. 

f 


joloto on DSKB35BYQ1 with HEARING
103 

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. 


joloto on DSKB35BYQ1 with HEARING
104 

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. 


joloto on DSKB35BYQ1 with HEARING
105 

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. 


joloto on DSKB35BYQ1 with HEARING
106 

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. 


joloto on DSKB35BYQ1 with HEARING
107 

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 be 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 


joloto on DSKB35BYQ1 with HEARING
108 

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. 


joloto on DSKB35BYQ1 with HEARING
109 

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.] 

[Submissions for the record follow:] 


joloto on DSKB35BYQ1 with HEARING
110 

1www.accesstobenefits.org. 

2www.benefitscheckup.org. 

3Statement of Michael Leavitt, Secretary of U.S. Department of Health & Human Services, 

May 2006. 4http://www.accesstobenefits.org/library/pdf/TheNextSteps.pdf. 

Statement of the National Council on Aging 

The National Council on Aging (NCOA) is the nation’s first organization formed 

to represent America’s seniors and those who serve them. Founded in 1950, NCOA’s 

mission is to improve the lives of older Americans. Our programs help the nation’s 

seniors improve their health, find jobs and job training, discover meaningful opportunities to contribute to society, enhance their capacity to live at home, and access 

public and private benefit programs. Our members include senior centers, area 

agencies on aging, faith-based service agencies, senior housing facilities, employment services, and consumer organizations. NCOA also includes a network of more 

than 15,000 organizations and leaders from service organizations, academia, business and labor who support our mission and work. 

NCOA chairs the Access to Benefits Coalition (ABC),1 comprised of national and 

community-based organizations dedicated to ensuring that Medicare beneficiaries 

with limited means know about and make the best use of resources available to access their needed prescription drugs and reduce their prescription drug costs. Established in 2004, the Access to Benefits Coalition has involved hundreds of community-based nonprofits through 55 local coalitions in 34 states and the District of Columbia, in educating and enrolling tens of thousands of beneficiaries in the Medicare Part D Low-Income Subsidy (LIS) and other prescription savings programs. 

ABC and its network of local organizations use powerful web-based tools such as 

NCOA’s BenefitsCheckUp® decision support tool 2 to help beneficiaries—as well as 

family caregivers and organizations who wish to assist them—to understand, apply 

for, and enroll in public and private prescription savings programs. 

BenefitsCheckUp® also helps determine if individuals qualify for the LIS, Medicare 

Savings Programs (MSPs), and other prescription savings programs with application 

forms available on the site, or enabling users to apply online for some of the benefits. 

NCOA is committed to finding and enrolling low-income Medicare beneficiaries in 

the available needs-based benefits programs for which they are eligible. We are 

pleased to submit this statement to the Subcommittee to highlight the need to simplify and streamline both the LIS and MSP. The statement also includes discussion 

of cost-effective strategies for finding and enrolling qualified eligibles in needs-based 

benefits programs. 

The Medicare Part D Low-Income Subsidy (LIS) and the Medicare Savings 

Programs (MSPs) 

The LIS and MSP programs provide substantial financial assistance to low-income 

Medicare beneficiaries both in accessing their needed prescription drugs and paying 

their Medicare premiums and cost-sharing. Although this assistance is available, enrollment rates in both programs remain unacceptably low. Some of the reasons for 

the low enrollment rates include confusing and difficult applications and eligible 

people not knowing the programs exist. Removing these barriers to enrollment is 

critical to increasing enrollment rates and providing low-income Medicare beneficiaries with the assistance they need. 

The Low-Income Subsidy 

It has been estimated by the U.S. Department of Health and Human Services that 

at least 75 percent of the Medicare beneficiaries still without any prescription drug 

coverage are eligible for the Low-Income Subsidy.3 NCOA estimates that only between 35 and 42 percent of Medicare beneficiaries who needed to voluntarily file an 

application with SSA in 2005 and 2006 to receive LIS have successfully done so (2.2 

million out of 5.2 or 6.2 million). The remaining 58 to 65 percent are not receiving 

the assistance for which they are eligible. It is important that efforts to find these 

people continue as the remaining LIS eligibles stand to gain the most from the prescription drug benefit and are least likely to have had prescription drug coverage 

before Part D began. 

To find the remaining LIS eligibles, certain changes need to be made to the Part 

D LIS program. NCOA and the Access to Benefits Coalition (ABC) released a report 

entitled The Next Steps: Strategies to Improve the Medicare Part D Low-Income Subsidy 4 in January 2007. The report outlined legislative, administrative and reguVerDate Sep 11 2014 16:28 Jun 24, 2016 Jkt 089561 PO 00000 Frm 00114 Fmt 6633 Sfmt 6621 I:\WAYS\OUT\89561.XXX 89561

joloto on DSKB35BYQ1 with HEARING
111 

latory changes that should be made to the LIS program to improve access for lowincome beneficiaries. The most important legislative recommendations include: 

• Eliminate the asset eligibility test. The asset test is the single-most significant barrier to the LIS for low-income seniors and people with disabilities. 

The asset test penalizes retirees who did the right thing by creating a modest 

nest egg to provide some security in their old age. People who manage to save 

a modest sum for retirement and still have very limited incomes should be 

encouraged and rewarded, not denied the extra help that they need. Of the 

LIS applications filed, the Social Security Administration (SSA) reports 41 

percent of denials were because the asset limits were exceeded. Eliminating 

the asset test would provide coverage through the ‘‘donut hole’’ for 1.8 million 

low-income beneficiaries in greatest need of help. 

• Fund the National Center on Senior Benefits Outreach and Enrollment and support organizations that use a person-centered approach 

to outreach, which has been shown to be one of the most efficient 

ways to find and enroll LIS eligibles. Finding and enrolling seniors and 

people with disabilities with limited resources in needs-based benefits programs has been a significant challenge for many years. The Older Americans 

Act (OAA) includes an authorization for the National Center on Senior Benefits Outreach and Enrollment that will use cost-effective, person centered approaches to reach the remaining LIS eligible beneficiaries. We recommend 

that $4 million be provided to support the work of the National Center to create Benefits Enrollment Centers that will: maintain web-based decision support tools; develop and maintain an information clearinghouse on best practices; and provide training and technical assistance. 

• Permit beneficiaries to apply for LIS and enroll in a plan at any time 

without penalty. We are grateful to the Centers for Medicare & Medicaid 

Services (CMS) for extending the Special Enrollment Period (SEP) and 

waiving the Late-Enrollment Penalty (LEP) for LIS eligibles through 2007. 

However, we urge Congress to make these protections permanent. Finding 

the remaining LIS eligibles will take time, as the experience in other needsbased benefits programs indicates. Under Medicare Part B, low-income beneficiaries eligible for Medicare Savings Programs can enroll any time and are 

exempt from penalties. The Part D rules should be made to be consistent with 

the Part B rules. Remove the LIS application questions on the cash 

surrender value of life insurance policies, and the value of in-kind 

support and maintenance (ISM). Many beneficiaries do not have this information and paperwork readily available. Insurance policies often are no 

longer held by the company they were originally purchased from, making it 

difficult to track down the company currently holding the policy. Beneficiaries 

also often plan for their families to use the life insurance benefit to pay for 

their burial expenses. Questions on ISM should also not be included because 

the amount is very difficult for applicants to estimate, due to its fluctuating 

nature and if people had assistance with their prescription drug costs they 

often would not have to rely on ISM. 

• Do not count funds in retirement savings plans such as 401(k) accounts as assets. Forcing people to cash in their 401(k) plans to become eligible for LIS penalizes seniors for doing the right thing by saving for retirement. Defined benefit pensions are not counted as an asset when determining 

LIS eligibility. For most of those without a defined benefit pension plan, the 

resources in their 401(k) are their only retirement savings. It makes no sense 

to discriminate against those who rely on their 401(k) plan. Periodic distributions from 401(k) accounts may constitute the only income people have to supplement their Social Security benefits. 

• Index the copayments for people between 100 and 150 percent of the 

Federal Poverty Level to the Consumer Price Index (CPI), not Part 

D drug cost increases. LIS-eligible people with incomes below 100 percent 

of the FPL have their prescription drug copayments increased each year according to the CPI. This roughly corresponds with beneficiaries Social Security cost-of-living adjustment (COLA) reflecting beneficiaries’ ability to pay. 

However, for LIS-eligible beneficiaries with incomes between 100 and 150 

percent of poverty, their co-payments are indexed to increases in Part D prescription drug costs, which rise at twice the rate of beneficiaries COLAs. 

Therefore, copayments become increasingly unaffordable and the value of the 

benefit for people between 100 and 150 percent of the FPL diminishes significantly over time. 


joloto on DSKB35BYQ1 with HEARING
112 

• Require the Internal Revenue Service (IRS) to provide SSA with taxfiling data to better target outreach efforts, while recognizing privacy 

concerns. Strategic partnerships among federal agencies, such as SSA, CMS, 

and IRS, will allow for targeted outreach directly to the people who are most 

likely eligible for LIS. CMS and SSA should have access to income and resource data contained in IRS files, thereby allowing them to more accurately 

identify potential LIS eligibles. This information would allow these agencies 

to target their outreach and enrollment efforts and would result in increased 

enrollment in the LIS program. Such data sharing has been permitted for the 

Medicare-approved drug discount card Transitional Assistance (TA) program 

and for administering Part B income related premiums. • Do not count prescription drug LIS assistance when determining benefits under other benefits programs. The effect of the LIS is compromised 

when reductions are made in other needs-based assistance, due to receipt of 

the LIS benefit. Congress should pass legislation to ensure that benefits 

under other needs-based programs, such as food stamps, Section 8 housing, 

and the Medicaid Medically Needy program, are not lost or reduced on account of receiving LIS benefits. Low-income beneficiaries should not be forced 

to choose between their housing or food needs and receiving help to pay for 

their prescription drugs. The Medicare Modernization Act (MMA) included 

this type of provision for the $600 TA under the Medicare-approved drug discount cards. 

• Have SSA screen LIS applicants for participation in the Medicare 

Savings Programs (MSPs). State Medicaid offices are required to screen for 

MSPs when a person applies for the LIS. However, most LIS applications are 

not filed at state Medicaid offices, but instead are processed by SSA. SSA 

should also be required to screen for MSP eligibility at the time of the LIS 

application. Participation in any of the MSPs automatically qualifies a person 

to participate in the full LIS. Since SSA already is collecting income and asset 

information for the LIS application, it would be relatively easy to screen for 

MSP eligibility at the same time. A study by the Access to Benefits Coalition 

found that 71 percent of the people who were found eligible for LIS also 

screened eligible for one of the MSPs. There is precedent for this as SSA already enrolls Medicare beneficiaries who receive Supplemental Security Income (SSI) in Medicaid in 32 states and the District of Columbia. 

The Medicare Savings Programs 

MSP is a joint Federal and State program that provides needed financial assistance to Medicare beneficiaries with their premiums and cost-sharing. There are four 

MSP programs: the Qualified Medicare Beneficiary program (QMB) pays Medicare 

premiums and cost sharing for people under 100% of the Federal Poverty Level 

(FPL); the Specified Low-Income Medicare Beneficiary program (SLMB) pays Part 

B premiums for people between 100 and 120% of FPL; the Qualifying Individual 

program (QI) pays Part B premiums for people between 120 and 135% of FPL, and 

the Qualified Disabled and Working Individual program (QDWI) pays Part A premiums for people with Medicare who are under age 65 and disabled, whose incomes 

are at or below 200% FPL and who no longer qualify for premium-free Medicare 

Part A only because they returned to work. Additionally, people eligible for QMB, 

SLMB or QI are automatically eligible for the LIS. Although MSPs provide much 

needed assistance, enrollment rates in the program are low. Only 33 percent of people eligible for QMB and 13 percent eligible for SLMB are enrolled. 

QMB and SLMB are entitlement programs jointly financed with both Federal and 

State money. This means that anyone who meets the qualifications can enroll in the 

program. QI, however, is not an entitlement program and is entirely financed by a 

grant from the Federal Government to the states. Because QI is not an entitlement 

program, people who are otherwise eligible may not be able to receive the benefit 

if the money available to the states through the Federal grant is used up. Additionally without Congressional action, the QI program is set to expire at the end of Fiscal Year 2007. 

Changes to simplify the MSP application and align the program with the LIS 

would increase the number of people enrolled in the program. Some of the recommended changes to the MSP program include: 

• Merge the QI program with the SLMB program to make QI permanent, and 

provide funding to the states for SLMB at the increased SCHIP rate. 

• Eliminate the asset test for MSP eligibility. If this cannot be done, we support 

increasing and aligning both the MSP and LIS asset tests to be more reflective of people with limited incomes who have managed to save a modest 


joloto on DSKB35BYQ1 with HEARING
113 

5http://www.accesstobenefits.org/library/pdf/PathwaysToSuccess.pdf 

amount of money for retirement. More closely align MSP and LIS programs 

(see earlier LIS recommendations on life insurance, in-kind support and 

maintenance, 401(k)) by gradually increasing income eligibility to 150 percent 

of the Federal Poverty Level. Also deeming should take place between both 

programs—those eligible for LIS should automatically be eligible for MSP. • Do not require face-to-face interviews for MSP eligibility, as it deters people 

from seeking assistance under the program. In addition, the MSP application 

should be available both in multiple languages and online in all states to encourage potential eligible beneficiaries to apply. • State Health Insurance Assistance Programs (SHIPs) should be given $1 per 

Medicare beneficiary to conduct outreach and education. In addition, first 

year funding of $4 million should be provided for the National Center on Senior Benefits Outreach and Enrollment authorized under the OAA. Funding 

should be targeted to MSP and LIS eligibles. Eliminate estate recovery for the 

MSP program in all states that have not already done so on their own. It does 

not amount to a significant amount of money for the states, it is administratively expensive, and it serves as a barrier to MSP enrollment for people who 

need the assistance offered under the program. • The SSA Commissioner should include information on MSP for those people 

who are likely eligible when the letters for newly eligible Medicare Parts A 

and B beneficiaries are sent. One of the reasons MSP enrollment numbers remain low is that most people do not know the programs exist. In addition to 

sending letters, other outreach efforts need to be made to increase awareness 

of the program. • IRS data provided to SSA for the indexing of Part B premiums should be used 

by SSA to screen potential eligibles for participation in MSPs and LIS. • We support three months of retroactive eligibility for people found eligible for 

QMB, as it is for both the SLMB and QI programs. • NCOA supports extending the LIS rule for determining family size to the 

MSP program. This would allow those with larger families to have more resources, making it consistent with their larger family responsibility. Many 

states currently do not take into account family members in addition to the 

spouse. 

Simplifying and aligning the LIS and MSP programs will encourage low-income 

Medicare beneficiaries to enroll in the programs as people eligible for one of the programs are likely eligible for the other. 

Cost Effective Strategies fo Enrolling Beneficiaries in Needs-Based Benefits 

Over the past three years, NCOA has been testing a variety of strategies for increasing enrollment in the LIS and other key needs-based public benefits. Various 

pilot projects have been funded primarily by The Commonwealth Fund, The Atlantic 

Philanthropies, CMS, and Kaiser Permanente. 

Over the past year, four evidence-based strategies have emerged that are particularly cost-effective for finding and enrolling low-income beneficiaries in available 

Medicare programs for low-income beneficiaries: 

1. Use comprehensive, person-centered approaches to outreach and enrollment (rather than focusing solely on a single benefit). 

People who are eligible for one means-tested public benefit are highly likely to 

also be eligible for, but not receiving other key public benefits. Many people who 

are applying for LIS are also eligible for other public benefits and vice versa. 

A major benchmarking study by The Bridgespan Group and NCOA examining 

more than 30 different single-benefit outreach and enrollment projects shows that, 

consistently, about 55 percent of the total costs per enrollment are related to identifying qualified individuals and persuading them to apply and only 45 percent of the 

costs relate to actual assistance with applications.5

Most federal agencies are limited by statute and/or practice from conducting outreach for more than a few benefits (e.g., USDA conducts Food Stamps outreach; SSA 

conducts LIS and SSI outreach; CMS conducts Medicare Part D outreach). As a result, the government is incurring the same costs of identification and persuasion 

over and over again. Much more could/should be done to increase the cost-effectiveness of government-sponsored outreach and enrollment efforts by encouraging/requiring screening for multiple benefits. 

2. Invest in the aging network and trusted, non-profit communitybased organizations that can create broad-based networks to effiVerDate Sep 11 2014 16:28 Jun 24, 2016 Jkt 089561 PO 00000 Frm 00117 Fmt 6633 Sfmt 6621 I:\WAYS\OUT\89561.XXX 89561

joloto on DSKB35BYQ1 with HEARING
114 

ciently connect people who are likely eligible for needs-based benefits to enrollment specialists who will help them apply. 

The ‘‘aging network’’ and other community-based non-profit organizations are 

well-suited to find and enroll low-income Medicare beneficiaries because they: are 

client-focused and person-centered; have trusting relationships with many beneficiaries; can create community-wide referral systems; and are able to leverage funding from multiple sources. 

The most cost-effective, community-based approach seems to be to create referral 

networks in which key organizations (such as drug stores, health plans, health centers, social service agencies, etc.) efficiently refer people seeking assistance and who 

are likely eligible to specialty enrollment centers. Ideally, these referrals should be 

‘‘warm transfers’’ (i.e., the ‘‘real-time’’ transfer of a caller who has been identified 

in some way as having a specific need) to a helpline dedicated to assisting them 

with the applications. 

Warm transfers to LIS enrollment centers result in the highest numbers of actual 

applications and are, on average, almost five times more cost-effective than direct 

mail and three times more cost-effective than outbound calls. In every community, 

there is a need for some targeted funding, particularly to focus on enrollment assistance (helping people to fill out the application forms once they have been identified). 

3. Promote the widespread use of person-centered, online screening 

and enrollment services (such as the BenefitsCheckUp) that enable 

consumers and organizations to screen for multiple benefits and directly file LIS applications; 

Online screening and enrollment services have the potential to help two different 

groups of low-income Medicare beneficiaries: consumers who can successfully use 

the Internet to get benefits for themselves or family members; and consumers who 

need the assistance of intermediary organizations to learn about and enroll in benefits. 

There are many advantages to online screening and enrollment tools, including: 

they can be easily accessed by both consumers and intermediary organizations and 

they can simultaneously screen for and facilitate enrollment in multiple benefits. 

Online filing for LIS significantly reduces processing costs for SSA. 

The BenefitsCheckUp® program, which is supported by foundations and corporations, served 232,000 clients in 2006 and its consumer edition (serving people and/ 

or their caregivers directly accessing the site) is currently producing enrollments in 

major public benefits at a cost $15 per benefit. If the online service was sponsored 

and/or promoted by government, it could reach and serve many more people and 

would likely achieve enrollments for $7—$10 per major benefit. Online tools also increase the efficiency and effectiveness of community-based organizations. Enrollment centers that assist consumers by filing online for LIS (either directly to SSA 

or through BenefitsCheckUp®) are more cost-effective than organizations filling out 

application forms and mailing them in. Online tools make person-centered screening 

(for multiple benefits) and application filing much easier to do. 

4. Encourage states to work across departments and use cross-matched 

state lists of people already enrolled in other public benefits to identify individuals eligible for and not receiving LIS and MSP. 

State benefit lists are a valuable resource that should be utilized to maximize enrollment in LIS and other benefits. The potential of this approach is being demonstrated in Pennsylvania. For the past three years, the State Department on Aging 

has been contracting with Benefits Data Trust to locate and apply individuals for 

the PACE/PACENET (Pharmaceutical Assistance Contract for the Elderly) program 

as well as the State of Pennsylvania Property Tax and Rent Rebate Program 

(PTRR) and MSP. This partnership exemplifies how this strategy can work to successfully locate, contact and enroll individuals into benefits they are eligible to receive. 

By cross-matching a list of 300,000 PACE enrollees with a list of 250,000 Property 

Tax and Rent Rebate program enrollees (list came through Department on Aging 

from Department of Revenue), the State identified 100,000 Property Tax and Rent 

Rebate program enrollees that were likely eligible for and not receiving PACE. By 

cross-matching the 250,000 Property Tax and Rent Rebate program enrollees 

against the list of 300,000 individuals receiving PACE/PACENET, the State identified 90,000 PACE/PACENET enrollees who were likely eligible for and not receiving 

Property Tax and Rent Rebate. By cross-matching the 300,000 PACE file with the 

Department of Public Welfare (state Medicaid office) file, the State identified 

100,000 PACE enrollees who were likely eligible for and not receiving MSP benefits). 


joloto on DSKB35BYQ1 with HEARING
115 

Using state lists of people enrolled in other public benefits has resulted in higher 

percentages of people who apply for and, ultimately receive, other benefits, as compared to lists that have less accurate income and contact information (i.e., people 

‘‘believed to be’’ eligible). Response rates and application conversion rates are higher 

when outreach efforts are able to use pre-existing benefit lists. Accuracy of both the 

financial and contact information provided by the Property Tax/Rent Rebate program has resulted in response rates for benefits application that are 250% greater 

than those resulting from efforts using purchased commercial lists. From an economic perspective, this means the cost of getting people into the benefits is also two 

and a half times less when using a well-targeted list. In other words, for the same 

fixed cost, more people are being helped at a much lower cost when efforts are much 

more targeted. Furthermore, the residual effect is that people who were in just one 

public benefit program in the beginning potentially end up being enrolled into three 

programs. 

The National Center on Senior Benefits Outreach and Enrollment 

A more focused, coordinated effort that utilizes person-centered assistance, webbased decision-support tools, and sophisticated lists of likely eligibles is needed to 

find and enroll low-income beneficiaries. Drawing directly on these strategies, the 

recently reauthorized Older Americans Act now provides a clear path to solving the 

problem by harnessing the potential of the aging network, new technology, and best 

practices based on lessons learned. The OAA includes new authorization for a National Center on Senior Benefits Outreach and Enrollment that will: 

• maintain and update web based decision support and enrollment tools and integrated person-centered systems; 

• utilize cost-effective strategies to find those with greatest economic need; 

• support efforts for community-based organizations and coalitions to serve as 

benefit enrollment centers; 

• develop and maintain an information clearinghouse on best practices; and 

• provide training and technical assistance regarding the most effective outreach, screening, enrollment and follow-up strategies. 

Now that the Center is authorized, initial funding of $4 million is needed to: 

• Work with trusted, experienced community-based and state organizations to 

support 25 Benefits Enrollment Centers (BECs) across the country with funding at $100,000 per Center. [$2.5 million] 

• Conduct pilot projects on list strategies, call centers, and other innovative 

strategies to test the most cost-effective outreach and enrollment methods. 

[$500,000] 

• Maintain and update web-based decision support and enrollment tools and integrated, person-centered systems that are available to BECs, the entire 

aging network and directly to consumers. [$500,000] 

• Train and provide technical assistance to the BECs and to the rest of the 

aging network, administer the pilot projects and begin to develop an information clearinghouse on cost effective best practices. [$500,000] 

Conclusion 

Congress created the MSP and LIS programs to provide needed assistance to lowincome Medicare beneficiaries in paying for their health and prescription drug costs. 

Unfortunately, enrollment in these programs has historically been low. To increase 

enrollment, needed changes should be made to the programs, including simplifying 

and aligning them, to increase access for Medicare beneficiaries with limited incomes. Cost-effective best practices should be used in outreach and enrollment efforts for needs-based benefits. 

Thank you for the opportunity to submit this statement on behalf of the National 

Council on Aging. If you have any questions please contact Howard Bedlin, NCOA’s 

vice-president for Public Policy & Advocacy at (202) 479–6685 or howard.bedlin@ 

ncoa.org. 

f 


joloto on DSKB35BYQ1 with HEARING
116 

Statement of Senior Citizens League 

On behalf of the approximately 1.2 million members of The Senior Citizens 

League (TSCL), a proud affiliate of The Retired Enlisted Association (TREA), thank 

you for the opportunity to submit a statement regarding low-income programs available to eligible Medicare beneficiaries. TSCL consists of active senior citizens, many 

of whom are low income, concerned about the protection of their Social Security, 

Medicare, and veteran or military retiree benefits. 

Some estimates suggest that as many as two-thirds of those eligible for certain 

low-income programs do not participate—often because they are not aware that such 

programs exist or believe they will not qualify based on out-of-date information. Frequently, our members contact our office with concerns over having to choose between purchasing prescription medications and paying bills. In some cases, these individuals are eligible for low-income programs but were not aware of the programs’ 

existence. 

MEDICARE SAVINGS PROGRAM (MSP) 

With three separate programs for Medicare Part B assistance, the first task seems 

to be determining which one applies for an individual. For individuals with an annual income level of $10,452 ($871 per month), or $13,932 ($1,161 per month) for 

couples, the Qualified Medicare Beneficiary (QMB) program exists. Asset levels are 

set at $4,000 for individuals and $6,000 for a couple. Persons in the QMB program 

have their Part B premiums, deductibles, and all Medicare cost sharing paid by 

their state Medicaid program. According to a May 2004 report by The Commonwealth Fund, it is estimated that 4 million seniors are eligible, based on income 

alone, for this program. 

Specified Low-Income Medicare Beneficiaries (SLMB) are persons whose annual 

income is at or below 120% of the federal poverty level, or $12,492 ($1,041 per 

month) for an individual, and $16,668 ($1,389 per month) for a couple. SLMB are 

subject to the same asset limits as QMB. State Medicaid programs pay SLMB’s 

Medicare Part B premiums. 

The third MSP grouping is Qualifying Individuals (QI). Individuals with an annual income between 120% and 135% of the federal poverty level fall into this category. To qualify, individuals must have an annual income of no more than $14,028 

($1,169 per month), or couples must have an annual income of no more than 

$18,720 ($1,560 per month). Asset levels remain the same for this group as for the 

SLMB and QMB. The Federal Government, and not the state, pays Medicare Part 

B premiums for persons designated QI. 

The Federal Government sets the income limits for eligibility, application procedures and asset limits. Although income limits are adjusted annually, asset limits, 

which were set in 1989, have not been indexed since then, according to The Commonwealth Fund, May 2004 issue (‘‘How Asset Tests Block Low-Income Medicare 

Beneficiaries from Needed Benefits’’). The asset limits are burdensome, outdated, 

and intimidating. Personal disclosure of one’s incomes and assets can also be a 

major hurdle for many elderly individuals. When asked about the cash value of inkind contributions and the cash value of life insurance policies, applicants either do 

not know the value or are embarrassed to report such assistance. Counting the ‘‘inkind’’ value of meals and support supplied through the generosity of others penalizes the neediest of seniors, and disregards the contributions of those who kindly 

supply the most basic of needs. In some instances, applicants do not disclose requested information for fear of incarceration, which is mentioned on the application. 

Asset limits vary by state. It should also be noted there are a few states that have 

eliminated or adjusted asset levels for the QMB and SLMB. States also have the 

option of using less restrictive measures for income and asset levels when determining Medicaid eligibility. In these instances, an individual who does not meet federal asset levels may be eligible for the MSP assistance. 

In the vast majority of cases, low-income seniors are not aware that programs 

exist to assist with premiums. Indeed, just learning the income limits to prepare 

this statement for the record proved a difficult challenge. When this statement was 

prepared, there was no link to Medicare Savings Programs posted on the homepage 

of www.medicare.gov. Information pulled up by use of the website search engine 

was more than one year old and the income limits out-of-date. By using the search 

engine for the ‘Frequently Asked Questions,’ only one answer even mentioned MSPs, 

and it directed us to our state Medicaid office, with no income information. The 

website for the Centers for Medicare and Medicaid Services (CMS) is not designed 

for seniors or easy to use by the general public. It also failed to readily supply current income information. In fact, in order to prepare this statement, we relied on 

income information from other Medicare advocates, the Medicare Rights Center. 


joloto on DSKB35BYQ1 with HEARING
117 

Improved outreach is obviously needed and could be simply supplied starting with 

links to information about the program on the homepage of Medicare.gov. In addition, adequate funding must continue for seniors’ counseling provided by Area Agency on Aging offices; local organizations that already reach out to low income individuals; and state insurance (Medicaid) offices. In recent years, the need for these services has been rapidly growing, but funding has not kept pace. 

LOW INCOME SUBSIDY (LIS) PROGRAM FOR PRESCRIPTION DRUGS 

For persons enrolled in a Medicare Part D prescription drug plan, depending on 

income and asset levels, financial assistance, known as ‘Extra Help,’ is available. 

Enrolling in Extra Help, the Federal Government’s low income subsidy (LIS), is simpler than MSPs. For instance, applications can be submitted on-line, at the state 

Medicaid agency office, through a local Social Security Administration (SSA) office, 

or by deemed status (dual eligible). Persons enrolled in a MSP and who receive SSI, 

or ‘‘Dual Eligibles,’’ are automatically enrolled in a LIS. Of the 9 million seniors enrolled in a LIS, approximately 6 million were enlisted automatically, thus they were 

considered ‘‘dual eligibles.’’ Seniors not automatically enrolled into a LIS must meet 

the following criteria: annual income is below $15,315 ($1,276 per month) single or 

$20,535 ($1,711 per month) for a couple, with assets (bank accounts, stocks, bonds, 

etc.) of less than $11, 710 (single) or $23,410 (couple). Assets do not include house 

or car values. 

According to a report by the Medicare Rights Center, the SSA found that 57% of 

seniors who applied for extra help were denied due to their financial assets, even 

though they met the income levels. Although the income and asset levels are more 

reasonable with LIS eligibility than with MSP, a senior should not be penalized because he or she has planned for the future and saved to help pay for unexpected 

expenses associated with older age. TSCL supports eliminating, or at the very least 

updating and indexing, asset tests, especially for MSP eligibility. 

Similar to the MSP application, the LIS application is also complex and lengthy, 

which is discouraging to many seniors. Threats of imprisonment, questions surrounding the cash value of life insurance policies, in-kind support, and bank accounts are intimidating. Some estimates suggest there are as many as 5 million seniors eligible for Extra Help who have not yet enrolled. TSCL believes this staggering 

number to be the result of long and confusing applications, asset testing, and a lack 

of awareness that Extra Help is even available. The SSA reports a person enrolled 

in Extra Help could save, on average, $3,700 annually. This is a huge amount for 

someone on a limited income. 

SOLUTIONS 

The first step in increasing enrollment numbers for both the MSP and the LIS 

is to make the information more readily available and increase outreach. By ensuring the funding for non-federal entities such as state Medicaid offices and local SSA 

offices, more seniors can be made aware of these programs. Additional federal 

grants are needed to ensure there are trained Medicare benefits counselors to help 

seniors apply for financial assistance. 

TSCL believes that the asset test should be completely eliminated. Basing an individual’s eligibility on annual income is sufficient. Seniors should not be penalized 

for saving and planning for the future. However, if complete elimination of the asset 

test is not feasible, then, at the very least, increased asset test limits are necessary. 

Another option could be to automatically enroll an MSP beneficiary into the LIS, 

and vice versa. With federal funding supporting both programs, the government 

should consider setting uniform standards (including simplified applications) for 

Medicaid offices to follow when determining the eligibility of seniors for the low income programs. This would help clear up confusion as to what resources are counted 

for which program and what resources do not need to be disclosed. With federal 

agencies working together with the same end result in mind, more eligible seniors 

would benefit. 

In addition, the government already screens Medicare beneficiaries for ‘‘income related’’ Part B premiums. TSCL believes many more seniors would be enrolled in low 

income programs if Medicare beneficiaries were allowed to permit the Internal Revenue Service (IRS) to share low income information with both the SSA and CMS. 

Several pieces of legislation are being, or already have been, introduced that offer 

possible solutions. For example, Rep. Lloyd Doggett (TX–25) introduced H.R. 1536, 

the Prescription Coverage Now Act, earlier this year. TSCL fully supports this legislation that increases asset test limits from $11,710 to $27,500 for individuals and 

from $23,410 to $55,000 for couples. Rep. Doggett’s bill also makes the application 

less intimidating by eliminating questions that ask for cash values of life insurance 

and in-kind assistance received. Additionally, H.R. 1536 would authorize the Social 


joloto on DSKB35BYQ1 with HEARING
118 

Security Administration limited use of IRS data, which is already used to determine 

Part B eligibility. Finally, the bill also calls for coordination between low income 

programs in Part B and Part D. TSCL encourages Congress to approve this vital 

legislation. 

TSCL applauds Congress for addressing the low enrollment numbers in Medicare 

assistance programs. With increased outreach, elimination of asset test limits, and 

a less intimidating application process, more individuals will be made aware of 

these programs designed to assist with rising healthcare costs. The end result will 

undoubtedly be increased enrollment and better financial stability for seniors in the 

lowest income brackets. 

Thank you. 

Æ 


joloto on DSKB35BYQ1 with HEARING