By Directing Attorney of Health Jennifer Goldberg and Borchard Fellow Catherine Bourque
Sandy had a good job as a registered nurse, and a middle class standard of living. She lost her husband and her ability to work her physically demanding job around the same time, leaving her with no income. Because of her job as a nurse, she receives just enough Social Security to be disqualified from means-based assistance like Medicaid and subsidized housing. As a result she spends a large percentage of her monthly income on rent, leaving little money to cover food or her Medicare copayments and premiums.
“Once you start going to the doctor, it’s a copay: $25/$30 to see the doctor, $25/$30 to get your lab tests, to get your xrays or any other specialized form of care that you need. You have the coverage, but you do not have the money to make the copays. For a lot of seniors, what happens is their health care stops right there.” – Sandy (watch the video here)
On September 21, Senator Wyden introduced new legislation aimed at providing critical reforms and greatly improving Medicare services and coverage for low-income seniors and persons with disabilities. The Medicare Affordability and Enrollment Act of 2016 was introduced with a companion bill in the House (S. 3371 and H.R. 6109 respectively) and would improve access to Medicare by expanding coverage under Medicare Savings Programs, lowering or limiting out-of-pocket costs for all Medicare beneficiaries, and improving the enrollment process.
We applaud this new proposal, and are particularly excited about key provisions of the legislation that expand eligibility for the Medicare Savings Programs through changes to the income and asset eligibility tests. Medicare Savings Programs provide important premium and co-payment relief for certain low-income Medicare beneficiaries, but the program needs an update.
Many low-income consumers are eligible for Medicare but are not among the 10 million “dual eligibles” with incomes and assets low enough to qualify for their state Medicaid program. Without some assistance, they cannot afford their Medicare premiums, copays or deductibles. Medicare Part B premiums can be a significant monthly expense, and copays for Part B services (such as doctors’ visits and outpatient procedures) are 20% of the cost of the service, which can be very steep for a low-income senior. The Medicare Savings Programs, designed to help this group, offer significant relief but currently do not reach enough people.
The proposed legislation would expand eligibility for the Qualified Medicare Beneficiary (QMB) program, which pays Part B premiums and any co-pays, coinsurance, or deductibles. How would eligibility change? Beneficiaries with incomes up to 135% of the federal poverty level ($1357 per month for an individual, or $1823 per month for a married couple), would qualify. This is up from the current standard of 100% of the federal poverty level. The legislation also increases eligibility for the Specified Low Income Beneficiary (SLMB) program, which covers premiums but not co-insurance and other out-of-pocket costs. For the SLMB program, those with incomes up to 150% of the federal poverty level ($1,485 per month for an individual, or $2,003 per month for couple) would qualify. This is up from the current standard of 120% of the federal poverty level.
Changes in how Americans save for retirement have made updating the asset test important as well. As the retirement landscape has shifted from defined benefit to defined contribution plans, low-income older adults must be permitted to retain the assets they need to maintain themselves in their homes and communities. The legislation proposes revamping the outdated asset limit test for eligibility for Medicare Savings Programs. The legislation aligns the asset limit test with the current Medicaid spousal impoverishment allowance test, which is adjusted annually for cost of living and inflation. Currently, in many states, low-income seniors who have retirement savings as low as $7,500 are not eligible for the Medicare Savings Programs. The proposals in the legislation are more reflective of the actual need of seniors living in the community.
The legislation also proposes several other important changes and improvements to Medicare. Unlike most private healthcare insurance plans, there is currently no limit on Medicare out-of-pocket costs, which means even a single hospitalization can turn into a catastrophic medical expense. The legislation caps out-of-pocket costs at $5,500 for 2018 to be adjusted yearly based on the consumer price index. It also eliminates the 24-month waiting period for persons with disabilities to become eligible for Medicare, enabling them to get Medicare coverage when they need it, not far down the road. The legislation cuts out-of-pocket coinsurance payments by half for any beneficiaries with income between 135% and 200% of the Federal Poverty Level and assets below the spousal impoverishment resource allowance standard. And it permanently extends funding for Medicare beneficiary education and outreach, providing much-needed resources to State Health Insurance Programs (SHIPs) and others.
The Medicare Affordability and Enrollment Act of 2016 is an exciting opportunity to truly improve access to healthcare for thousands of seniors who currently put off going to the doctor, to the detriment of their health and the efficacy of the American health system. Justice in Aging fully supports and encourages improvements to the Medicare Savings Programs such as both Senator Wyden’s bill and the companion bill in the House. (You can find our support letter for the Senate version here and our support letter for the House version here.)
The Senate legislation is co-sponsored by Debbie Stabenow, (D-MI), and Michael Bennet, (D-CO), Bill Nelson, (D-FL), and Sherrod Brown, (D-OH). The House bill was introduced by Frank Pallone, Jr. (D-NJ), Sander Levin (D-MI), Gene Green (D-TX), and Jim McDermott (D-WA). For further information about all the provisions in the Medicare Affordability and Enrollment Act of 2016, a section by section breakdown of the Senate bill is available here, on the Senate Finance Committee website (the House bill is identical). The full text of the legislation is also available here.