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AARP Supports New Legislation to Provide People with Limited Incomes Extra Help with Medicare Prescription Drug Costs


Contact: AARP Media Relations, 202-434-2560,

Today, AARP endorsed the Part D Equity for Low-Income Seniors Act, introduced by U.S. Senators Jeff Bingaman (D-NM) and Gordon Smith (R-OR), that would help people with limited incomes on Medicare get the prescription drugs they need. This bill is the companion to a similar House measure introduced last month by Representative Lloyd Doggett (D-TX) that AARP also supports.

Currently, the Medicare drug program provides greatly reduced co-payments, low or no premiums, and full drug coverage to people with limited incomes. This program is known as the Low-Income Subsidy, or LIS. Unfortunately, millions of older Americans who need this help cannot qualify because of a strict asset test; between 3 and 5 million eligible people are still not getting the extra assistance they deserve. This bill would raise the asset limit, streamline the application process and allow more people to qualify for the benefit.

“One of the Medicare drug benefit’s most important features is the extra help it provides to people with limited incomes. The Senators’ bipartisan legislation is a solid step toward AARP’s goal of eliminating the asset test. We should encourage people to save for retirement, not penalize those who do with an asset test. Both its strict limits and convoluted application process are keeping millions of people who most need the extra help that Part D provides from getting it,” said David Sloane, AARP Senior Managing Director for Government Relations and Advocacy.

The current limits for the asset test in Medicare’s drug plan are far too low – $11,710 for individuals, $23,410 for couples. The Bingaman-Smith legislation would help by raising these unreasonably low thresholds to $27,500 for individuals and $55,000 for couples. It also would provide additional help in easing the asset test burden by:

  • Streamlining the LIS application process and deleting confusing questions about the cash value of life insurance and whether someone gets occasional help from family or charities with living expenses like groceries;
  • Keeping LIS copays affordable by pegging annual increases to the general inflation rate, rather than the much higher Part D inflation rate; and
  • Authorizing the IRS to confidentially share income data with Social Security (as is done now to determine income-related Part B premiums) so they can target outreach to beneficiaries who meet the LIS income criteria.

Along with the asset test bill, Senators Bingaman and Smith also introduced three other bills aimed at improving the Medicare drug benefit, which AARP also supports:

  • The Medicare Part D Outreach and Enrollment Enhancement Act, would eliminate the late enrollment penalty for people with LIS and increase funding for State Health Insurance Programs, which provide the one-on-one counseling that is most helpful in getting people enrolled in LIS.
  • Home and Community Services Equity Act¸ which would eliminate co-pays for Medicaid beneficiaries who get long term care services in state Home and Community Based Service (HCBS) programs, as is done now for Medicaid beneficiaries receiving these services in nursing homes.
  • The Low-income True Out-Of Pocket (TrOOP) Expense under Part D Assistance Act, which would let payments by safety net programs such as federally qualified health clinics, AIDS drug assistance programs, the Indian Health Service and drug company Patient Assistance Programs (PAP) count toward the out-of-pocket costs that fill the Part D “doughnut hole” coverage gap.

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