Press Center: News Releases
AARP Supports New Legislation to Provide People with Limited Incomes Extra Help with Medicare Prescription Drug Costs
News Release
March 15, 2007
Today, AARP supported legislation introduced by Representative Lloyd Doggett (D-TX) that would help people with limited incomes on Medicare get the prescription drugs they need.
Currently, the Medicare drug program provides greatly reduced co-payments, low or no premiums, and full drug coverage to people with limited incomes. Unfortunately, millions of older Americans who need this help cannot qualify because of a strict asset test; approximately 5 million eligible people are still not getting the extra assistance they deserve. This bill would raise the asset limit and streamline the process and allow more people to qualify for the benefit.
AARP joined Rep. Doggett and other groups at a press conference on Capitol Hill today. The letter to Representative Doggett follows:
Dear Representative Doggett:
AARP is pleased to endorse the Prescription Coverage Now Act of 2007, which would improve the Medicare Part D asset test so more low-income older persons get needed help with their prescription drug costs.
AARP supported the creation of the Part D drug benefit, and the extra help provided to people with limited incomes that have the most trouble paying for needed medications is one of its most important features. However, the asset test that limits the amount of savings that people can have in order to receive this low-income subsidy (LIS) is proving to be a serious barrier.
Your 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.
Even those who did not oppose an asset test agree that current limits -- $11,710 for individuals, $23,410 for couples – are far too low. Your 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:
- Waiving the late enrollment penalty for people who receive the LIS;
- Streamlining the LIS application by 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;
- 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; and
- Requiring Social Security to screen LIS applicants for state Medicare Savings Programs (MSP), which help pay Medicare premiums and copays. MSPs also provide an additional avenue for entry into LIS for some people in states that have more generous MSP eligibility rules, since people enrolled in MSPs are automatically enrolled in LIS.
Older Americans and their families are counting on Congress to do everything possible to build on the success of the MMA and make prescription drugs more affordable and accessible to beneficiaries. We thank you for your leadership, and we look forward to working with you and your colleagues on both sides of the aisle toward that end.
Sincerely,
David P. Sloane
Senior Managing Director
Government Relations & Advocacy