FOR IMMEDIATE RELEASE
January 15, 2010
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Jordan McNerney or David Allen
202-434-2560
New AARP Report: Raising Medicare Asset Limits Would Help Over a Million Older Adults
Changes Proposed in Health Reform Could Make Care More Affordable for Low-Income Medicare Beneficiaries
WASHINGTON—A newly released report, conducted by independent researcher Mark Merlis and commissioned by the AARP Public Policy Institute, examines the effect of resource (or asset) testing on four federal programs for low-income families, finding that higher resource limits would increase the number of people eligible for the Medicare Savings Programs (MSP) and the Medicare Part D Low Income Subsidy (LIS).
According to the report, under current rules (which went into effect January 1, 2010), asset tests exclude 30 percent of income-eligible older adults from the MSP program alone. The report finds that by raising asset limits, as proposed by the House health care reform legislation, to $17,000 for an individual and $34,000 for a couple, more than a million very low-income Medicare beneficiaries would become eligible for assistance with Medicare costs under MSP.
MSP helps pay out-of-pocket costs for people with Medicare who have limited resources. The Medicare LIS pays some or all of participants’ prescription drug coverage premiums, and reduces required cost-sharing.
“Low-income Americans should never be punished for doing the right thing and saving for their retirement,” said AARP Executive Vice President John Rother. “We strongly support the House provision that would raise the asset test threshold without jeopardizing beneficiaries’ economic security, and will work with Congress to make this part of final health reform legislation.”
To qualify for some federal programs for low-income individuals and families, applicants must not only have countable income below specified limits but must also meet resource tests—limits on savings and other assets. Requirements that applicants exhaust most of their assets before receiving help prevent young people from building savings for a secure retirement and leave older people without savings to cushion against even a minor unexpected event.
In addition to MSP and LIS, Merlis also examines the impact of asset tests in the Supplemental Security Income (SSI) and Food Stamp (SNAP) programs.
The report can be viewed at http://www.aarp.org/research/ppi/econ-sec/low-income/articles/2010-01-resource-tests.html.
AARP is a nonprofit, nonpartisan membership organization that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole. AARP does not endorse candidates for public office or make contributions to either political campaigns or candidates. We produce AARP The Magazine, the definitive voice for 50+ Americans and the world's largest-circulation magazine with over 35.5 million readers; AARP Bulletin, the go-to news source for AARP's nearly 40 million members and Americans 50+; AARP Segunda Juventud, the only bilingual U.S. publication dedicated exclusively to the 50+ Hispanic community; and our website, AARP.org. AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. We have staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.
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