Introduction of the Medicare Savings Program Improvement Act of 2009

Floor Speech

INTRODUCTION OF THE MEDICARE SAVINGS PROGRAM IMPROVEMENT ACT OF 2009 -- (Extensions of Remarks - June 04, 2009)

* Mr. BECERRA. Madam Speaker, I rise today to introduce the Medicare Savings Program Improvement Act of 2009 with my colleague Congressman Lloyd Doggett (D-TX). Senator Bingaman (D-NM) is introducing similar legislation in the Senate. This legislation makes long overdue improvements to the Medicare Savings Program by providing additional assistance to modest income seniors for their health care out-of pocket expenses.

* Numerous advocacy groups have endorsed the bill, including AARP, Families USA, Consumers Union, the Center for Medicare Advocacy, the Medicare Rights Center, the National Committee to Preserve Social Security and Medicare, the National Council on Aging, and the National Senior Citizens Law Center.

* Currently, the Medicare Savings Program provides needed financial assistance for more than 6.2 million of the sickest and most vulnerable Medicare beneficiaries. The program has three major categories of beneficiaries: Qualified Medicare Beneficiaries (QMBs), Specified Low-Income Medicare Beneficiaries (SLMBs) and Qualified Individuals (QI). These categories provide varying amounts of benefits to Medicare beneficiaries whose annual incomes are less than 135 percent of the federal poverty level (annual incomes of $14,623 for an individual and $19,670 for couples in 2009) and annual resources are no more than $4,000 for individuals and $6,000 for couples.

* Unfortunately, the Medicare Savings Program does not reach many eligible beneficiaries because the benefit rules are very restrictive and confusing, and it is difficult to apply for the program. The Congressional Budget Office estimated that only 33 percent of eligible QMBs and 13 percent of eligible SLMBs actually are enrolled in the program. This enrollment rate is much lower than other federal benefit programs. For instance, 75 percent of eligible beneficiaries receive the Earned Income Tax Credit, 66 to 73 percent of eligible recipients enroll in the Supplemental Security Income program and 66 to 70 percent of eligible beneficiaries enroll in Medicaid.

* The National Academy of Social Insurance found that many potential beneficiaries do not apply for these benefits because they incorrectly assume that they have too many resources. And for many more modest-income Medicare beneficiaries, the extremely low asset test of the Medicare Savings Program disqualifies them from receiving these important benefits. A 2002 Commonwealth Fund study found that only 48 percent of those who met the income requirements for the Medicare Savings Program in effect that year also met the asset requirements.

* This inability to access the Medicare Savings Program benefit has real consequences for these seniors and individuals with disabilities. MedPAC has cited a study finding that QMB qualifying nonenrollees were twice as likely to avoid visiting a physician because of cost than QMB enrollees. As a result, QMB qualifying nonenrollees are more likely to access hospital emergency rooms than QMB enrollees.

* Both the National Academy of Social Insurance and the Henry J. Kaiser Family Foundation in separate studies cite similar reasons for the low enrollment in the Medicare Savings Program. They include: enrollment in Medicaid offices (welfare stigma), asset reporting, lack of awareness (79 percent of unenrolled eligible beneficiaries never heard of the program), hard-to-reach population (eligible individuals are older, poorer, sicker and often cannot read or speak English), and a burdensome application process (two-thirds of enrollees need help with the application).

* Recognizing the shortcomings of the current program, Congress did make modest, but important modifications in the rules of the program last year. As part of ``The Medicare Improvements for Patients and Providers Act'' (P.L. 110-275), Congress allowed seniors to begin their application process in Social Security offices, modestly increased asset limits and eliminated a provision that allowed states to recover assets upon a beneficiary's death. These provisions did simplify the application process, make more individuals aware of the program and increase outreach to hard-to-reach individuals. However, much more needs to be done.

* Even with these changes, the Medicare Savings Program's current design still makes it difficult for eligible seniors to enroll for the benefits and its eligibility requirements are significantly stricter than the Medicare low-income drug subsidy program. Recognizing these issues in 2008, MedPAC recommended that Congress raise the Medicare income and asset criteria to conform to the low-income drug subsidy and standardize program requirements so that the Social Security Administration could screen low-income drug subsidy applicants for federal Medicare Savings Program eligibility.

* In response, the Medicare Savings Program Improvement Act of 2009 proposes to accomplish three goals. First, the bill aligns the Medicare Savings Program with the low-income drug subsidy program by reducing it to two beneficiary categories and standardizing the definition of income and assets for both programs.

* Second, it would expand access by increasing the income eligibility limits for Qualified Medicare Beneficiaries up to 150 percent (an annual income level of $16,245 for individuals and $21,855 for families in 2009) and Specified Low-Income Beneficiaries up to 200 percent (an annual income of up to $21,660 for individuals and up to $29,140 in 2009) of the federal poverty level. And annual resource limits would be raised to $27,000 for individuals and $55,000 for families. Representative DOGGETT has introduced legislation that changes resource and income limits for the Medicare low-income drug subsidy program to the same levels as this bill.

* Finally, the bill continues to simplify the application process. For instance, the legislation makes it easier for non-native English speaking Medicare beneficiaries to access enrollment materials.

* Improving the Medicare Savings Program will create increased access to health benefits for our sickest and poorest seniors and the disabled. I urge my colleagues to support this bill and ensure that low-income Medicare beneficiaries are able to fully access the important health benefits provided by Medicare.

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