Make Low-income Assistance More Accessible
Medicare deductibles, premiums, co-payments and coinsurance can become a costly burden, especially for people living on a fixed income. For some, Part D premiums and drug costs can be unaffordable, especially when they are in the doughnut hole and must pay the full cost of their medicines.
Medicare Savings Programs (MSPs) are designed to help those with limited incomes afford their out-of-pocket medical costs. And Extra Help, also known as the Low Income Subsidy, is meant to help them cover their premiums and copayments under the Part D drug benefit.
After 15 years, however, only about 50 percent of eligible individuals are enrolled in Medicare Savings Programs, and over 4 million who qualify for Extra Help remain un-enrolled. Millions of others do not receive the help they need because a modest nest egg or financial assistance from a family member disqualifies them.
Bureaucratic obstacles make the application process difficult, and eligibility criteria exclude many people who need help. 
Although they are both designed to help the poorest people with Medicare, MSPs and Extra Help have different eligibility criteria and different application procedures.
Applications for Medicare Savings Programs are processed through state Medicaid offices, while those for Extra Help are handled by the Social Security Administration. This means that millions of people who apply for and receive Extra Help are never even assessed for MSPs.
Extra Help and, in most states, MSPs have asset tests that disqualify low-income people if they have even modest savings for an emergency. Asset tests also needlessly complicate the application process.
Ms. M, an 82-year-old Manhattan resident, has an annual income of $8,363 from Social Security. She is eligible for the Qualified Medicare Beneficiary (QMB) program, a Medicare Savings Program that will help pay for her Medicare costs.
To apply, Ms. M gathered her documents and took a bus to the Medicaid office. She arrived with her completed application in hand, placed it in the designated basket and took a seat.
As time passed, Ms. M. grew increasingly anxious. Finally, hours later, a receptionist rummaged through a pile a papers, only to claim that Ms. M. had never submitted the application. Despite her careful preparation and long wait, Ms. M, perspiring and hands shaking, was told to fill out another application.
Ms. M nearly gave up, overwhelmed by the stress of the application process. In fact, many others in her situation do not complete the application, and consequently do not receive the help to which they are entitled.
People with Medicare should not be denied medical care or medicine because they cannot afford them. With the additional assistance MSPs provide for Medicare premiums and copays, individuals with limited incomes are less likely to delay seeing a doctor or seeking treatment. And Extra Help provides financial assistance so people can get the medications they need to stay healthy—without Extra Help, the high cost of medications can be an insurmountable barrier for many living on a fixed income.
Every day, the Medicare Rights Center works at the state and federal levels to improve access to MSPs and Extra Help:
In New York, we successfully worked to eliminate the asset test for MSPs.
At the national level, we are working to:
- eliminate the asset test for both programs;
- streamline the application procedures for both programs so that people can apply either to the Social Security Administration or their state Medicaid office and be assessed for both.
As part of an advocacy coalition, we pushed Congress to include reforms of low-income programs in the Medicare Improvements for Patients and Providers Act, which will become effective in 2010.
This new law more than doubles the asset levels allowed for MSPs, aligning them with the criteria used for Extra Help. The value of a life insurance policy and help from friends and family will no longer be used to disqualify people who need Extra Help to cover their prescription drug costs. The law also requires the Social Security Administration and state Medicaid departments to cooperate in outreach and enrollment efforts for MSPs and Extra Help.
As a concerned citizen, you can act for change in Congress. Take action now!
Read about the most recent developments on this topic in Asclepios or learn more in any of the materials below.
Letter of Support for Senator Bingaman's Bill, May 18, 2009
Letter to House about Medicare Savings Programs and the Low-Income Subsidy, May 28, 2009
New York Eliminates Asset Test for Medicare Programs for Low-Income New Yorkers, April 2, 2020
Expanding Eligibility for Medicare Savings Programs: The Case for New York State, December 2007
Part D 2007: Addressing Access Problems for Low-Income People with Medicare, November 2006
Improving the Part D Low-Income Subsidy: Comments and Recommendations to Social Security, May 2005
The Medicare Low Income Drug Subsidy: Strategies to Maximize Participation, January 2005