WASHINGTON U.S. Senator Herb Kohl (D-WI), Chairman of the Special Committee on Aging, today held a hearing to examine the challenges that many seniors are facing with the Medicare Prescription Drug programs low-income subsidy (LIS). There are more than 3 million low-income seniors who may be eligible for the benefit, but are not receiving it.

Last year got off to a rocky start as many low-income seniors were denied the drugs they needed at the pharmacy, Kohl said. While some of those problems were resolved, serious issues remain that are preventing low-income seniors from getting the low-income subsidy.

Seniors with incomes less than roughly $15,000 a year and assets less than roughly $11,500 are eligible for Medicares 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 programs 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.

But many low-income seniors have not been able to take advantage of the 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 needed to apply for LIS, received the benefit. Senior advocates have pointed to the programs complex application process and shifts in drug plan participation in the LIS as challenges many seniors face in accessing the benefit.

Seniors faced many of these problems last year, and they should have been solved by now, Kohl said. Its time for CMS to put together a comprehensive plan and report back to this Committee on how they will fix these problems.

Larry Kocot, Senior Advisor to the Administrator of the Centers for Medicare and Medicaid (CMS) and Beatrice Disman, New York Regional Commissioner of the Social Security Administration (SSA) were on hand at todays hearing to discuss what their agencies have done to address the challenges seniors have faced with the LIS implementation.

Both CMS and SSA play important roles in this process: CMS has overall responsibility for implementing the Medicare drug benefit, while SSA is responsible for processing the LIS applications and determining eligibility. In November of 2006, the HHS Inspector General found that neither CMS nor SSA had good income data to identify eligible seniors.

As we enter the second year of the Medicare drug benefit, we have an obligation to make sure it is working for all seniors, but particularly for our poorest seniors who need help the most, Kohl said. We are not there today. The recommendations from todays witnesses can lead to real solutions, and I hope the Administration is willing to work with us to implement them.

At the hearing, Kohl noted that he is crafting a bill to help SSA better target low-income seniors. He also urged CMS and lawmakers to simplify the application process and revaluate the asset test, which many advocates believe is too restrictive and further complicates the LIS application.