Bill Amends Asset Test, Application Process that Currently Bars Many Seniors from Coverage

WASHINGTON, D.C. - U.S. Senator Herb Kohl, Chairman of the Senate Special Committee on Aging, has signed on as cosponsor of the Part D Equity for Low-Income Seniors Act of 2007, a bill introduced today that would do away with some of the burdensome requirements that prevent many of America's needy seniors from qualifying for Medicare Part D's low-income subsidy (LIS). The bill, sponsored by Senator Jeff Bingaman (D-NM), encompasses many of the recommendations borne from a hearing Chairman Kohl held on LIS this past January, such as raising the asset test, creating an expedited application process for pre-screened beneficiaries, and allowing the Social Security Administration (SSA) to target qualified seniors based on the tax returns they file with the Internal Revenue Service (IRS).

"More than 3 million seniors who were projected to be eligible for Medicare Part D's low-income subsidy are not receiving it. This extra help for low-income seniors can mean the difference between affording medicine or paying rent," said Kohl. "This bill addresses the serious challenges that are preventing low-income seniors from getting the assistance in prescription drug coverage they need."

Seniors with incomes less than roughly $15,000 a year and assets less than roughly $11,500 are currently eligible for Medicare's LIS. These seniors can benefit from low or no co-payments, deductibles, and premiums, and they are covered in the "donut hole"a gap in the program's coverage of drug costs between $2,251 and $5,100. Many lawmakers and organizations cited the low-income benefit as a major selling point when the Medicare Prescription Drug law was passed in 2003.

However, since the inception of Medicare Part D in 2006, many low-income seniors have not been able to take advantage of the LIS program. The Department of Health and Human Services (HHS) estimated that in 2006 only 2 million, or 35 percent, of the 5.7 million people who were projected by the federal government to be eligible received the LIS benefit. Senior advocates have pointed to the program's complex application process and shifts in drug plan participation in the LIS as challenges many seniors face in accessing the benefit.

Specifically, the bill would allow the IRS to transfer tax filing information to the SSA for the purpose of better targeting senior beneficiaries who might be eligible for the LIS; create an expedited LIS application process for pre-screened beneficiaries; raise the asset test limits to $27,500 for an individual and $55,000 for a couple, capturing about half of individuals and two-thirds of couples who have been denied LIS because of excess resources; prohibit the reporting of retirement account balances, life-insurance policies, and in-kind contributions when determining a beneficiary's resource levels; and prohibit LIS benefits from being counted as resources for the purposes of determining eligibility for other federal programs.

With the administration's recent announcement that they will terminate Wisconsin's SeniorCare program, this legislation is all the more crucial for Wisconsin seniors. Because SeniorCare boasts such a convenient application process and requires no asset test, many are worried that Wisconsin seniors who were eligible for prescription drug coverage under SeniorCare may not be eligible for comparable coverage under Medicare Part D. This bill would help ease the transition to Medicare Part D for those low-income seniors in Wisconsin.

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