[House Hearing, 110 Congress]
[From the U.S. Government Printing Office]


 
                   MEDICARE SAVINGS PROGRAMS AND LOW
                   INCOME SUBSIDY: KEEPING MEDICARE'S
                   PROMISE FOR SENIORS AND PEOPLE WITH
                              DISABILITIES

=======================================================================

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 15, 2007

                               __________

                           Serial No. 110-45


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov


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                    COMMITTEE ON ENERGY AND COMMERCE

    JOHN D. DINGELL, Michigan,       JOE BARTON, Texas
             Chairman                    Ranking Member
HENRY A. WAXMAN, California          RALPH M. HALL, Texas
EDWARD J. MARKEY, Massachusetts      J. DENNIS HASTERT, Illinois
RICK BOUCHER, Virginia               FRED UPTON, Michigan
EDOLPHUS TOWNS, New York             CLIFF STEARNS, Florida
FRANK PALLONE, Jr., New Jersey       NATHAN DEAL, Georgia
BART GORDON, Tennessee               ED WHITFIELD, Kentucky
BOBBY L. RUSH, Illinois              BARBARA CUBIN, Wyoming
ANNA G. ESHOO, California            JOHN SHIMKUS, Illinois
BART STUPAK, Michigan                HEATHER WILSON, New Mexico
ELIOT L. ENGEL, New York             JOHN B. SHADEGG, Arizona
ALBERT R. WYNN, Maryland             CHARLES W. ``CHIP'' PICKERING, 
GENE GREEN, Texas                        Mississippi
DIANA DeGETTE, Colorado              VITO FOSSELLA, New York
    Vice Chairman                    STEVE BUYER, Indiana
LOIS CAPPS, California               GEORGE RADANOVICH, California
MIKE DOYLE, Pennsylvania             JOSEPH R. PITTS, Pennsylvania
JANE HARMAN, California              MARY BONO, California
TOM ALLEN, Maine                     GREG WALDEN, Oregon
JAN SCHAKOWSKY, Illinois             LEE TERRY, Nebraska
HILDA L. SOLIS, California           MIKE FERGUSON, New Jersey
CHARLES A. GONZALEZ, Texas           MIKE ROGERS, Michigan
JAY INSLEE, Washington               SUE WILKINS MYRICK, North Carolina
TAMMY BALDWIN, Wisconsin             JOHN SULLIVAN, Oklahoma
MIKE ROSS, Arkansas                  TIM MURPHY, Pennsylvania
DARLENE HOOLEY, Oregon               MICHAEL C. BURGESS, Texas
ANTHONY D. WEINER, New York          MARSHA BLACKBURN, Tennessee        
JIM MATHESON, Utah                   
G.K. BUTTERFIELD, North Carolina     
CHARLIE MELANCON, Louisiana          
JOHN BARROW, Georgia                 
BARON P. HILL, Indiana               
_________________________________________________________________

                           Professional Staff

 Dennis B. Fitzgibbons, Chief of 
               Staff
Gregg A. Rothschild, Chief Counsel
   Sharon E. Davis, Chief Clerk
   Bud Albright, Minority Staff 
             Director

                                  (ii)
                         Subcommittee on Health

                FRANK PALLONE, Jr., New Jersey, Chairman
HENRY A. WAXMAN, California          NATHAN DEAL, Georgia,
EDOLPHUS TOWNS, New York                 Ranking Member
BART GORDON, Tennessee               RALPH M. HALL, Texas
ANNA G. ESHOO, California            BARBARA CUBIN, Wyoming
GENE GREEN, Texas                    HEATHER WILSON, New Mexico
    Vice Chairman                    JOHN B. SHADEGG, Arizona
DIANA DeGETTE, Colorado              STEVE BUYER, Indiana
LOIS CAPPS, California               JOSEPH R. PITTS, Pennsylvania
TOM ALLEN, Maine                     MIKE FERGUSON, New Jersey
TAMMY BALDWIN, Wisconsin             MIKE ROGERS, Michigan
ELIOT L. ENGEL, New York             SUE WILKINS MYRICK, North Carolina
JAN SCHAKOWSKY, Illinois             JOHN SULLIVAN, Oklahoma
HILDA L. SOLIS, California           TIM MURPHY, Pennsylvania
MIKE ROSS, Arkansas                  MICHAEL C. BURGESS, Texas
DARLENE HOOLEY, Oregon               MARSHA BLACKBURN, Tennessee
ANTHONY D. WEINER, New York          JOE BARTON, Texas (ex officio)
JIM MATHESON, Utah
JOHN D. DINGELL, Michigan (ex 
    officio)
  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     1
 Hon. Nathan Deal, a Representative in Congress from the State of 
  Georgia, opening statement.....................................     2
Hon. Heather Wilson, a Representative in Congress from the State 
  of New Mexico, opening statement...............................     3
Hon. Gene Green, a Representative in Congress from the State of 
  Texas, opening statement.......................................     5
Hon. Marsha Blackburn, a Representative in Congress from the 
  State of Tennessee, opening statement..........................     6
Hon. Hilda L. Solis, a Representative in Congress from the State 
  of California, opening statement...............................     7
    Prepared statement...........................................     8
Hon. John B. Shadegg, a Representative in Congress from the State 
  of Arizona, opening statement..................................     8
Hon. Tammy Baldwin, a Representative in Congress from the State 
  of Wisconsin, opening statement................................     9
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, prepared statement................................    11
Hon. Edoulphus Towns, a Representative in Congress from the State 
  of New York, prepared statement................................    13

                               Witnesses

Monica Sanchez, deputy director, Medicare Rights Center, 
  Washington, DC.................................................    15
    Prepared statement...........................................    18
John Coburn, director, Make Medicare Work Coalition, Health & 
  Disability Advocates, Chicago, IL..............................    28
    Prepared statement...........................................    30
Lilla Sassar, beneficiary, Syacauga, AL..........................    47
    Prepared statement...........................................    47
Gail Clarkson, chief executive officer, the Medilodge Group, 
  Bloomfield Hills, MI, on behalf of the American Health Care 
  Association (AHCA).............................................    48
    Prepared statement...........................................    50
N. Joyce Payne, member, Board of Directors, AARP, Washington, DC.    64
    Prepared statement...........................................    66


                   MEDICARE SAVINGS PROGRAMS AND LOW
                   INCOME SUBSIDY: KEEPING MEDICARE'S
                     PROMISE FOR SENIORS AND PEOPLE
                           WITH DISABILITIES.

                              ----------                              


                         TUESDAY, MAY 15, 2007

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 2:05 p.m. , in 
room 2123, Rayburn House Office Building, Hon. Frank Pallone, 
Jr., (chairman) presiding.
    Present: Representatives Green, Allen, Baldwin, Solis, 
Matheson, Deal, Wilson, Shadegg, Murphy, Burgess, Blackburn and 
Barton.
    Staff present: Yvette Fontenot, Brin Frazier, Amy Hall, 
Christie Houlihan, Purvee Kempf, Bridgett Taylor, Robert Clark, 
Chad Grant, Melissa Bartlett, Ryan Long, and Nandan 
Kenkeremath.

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Pallone. The hearing is called to order. Today we are 
having a hearing on Medicare savings plan and low income 
subsidy, keeping Medicare's promise for seniors and people with 
disabilities. And I will recognize myself initially for an 
opening statement.
    The focus of today's hearing is on the Medicare savings 
programs which consist of the Qualified Medicare Beneficiary or 
QMB Program, the Specified Low-income Beneficiary or SLIMB 
Program and the Qualified Individual or QI Program. We will 
also be hearing about the newest financial assistance program 
available to Medicare beneficiaries, the low-income subsidy 
that was included as part of the new Medicare Part D benefit.
    These financial assistance programs are a vital part of 
Medicare because they help ensure that millions of low-income 
beneficiaries are able to access the health benefits that they 
are entitled to. Many of the Medicare beneficiaries who qualify 
for these programs are our most vulnerable. They are more 
frail, more disabled, have greater health care needs that are 
often more expensive, and they are also more likely to be 
female, live alone and more likely to be racial minorities.
    Ensuring the success of the MSP and LIS Programs means 
ensuring access to health care services to those who need it 
most. Without the Medicare savings programs and low-income 
subsidy, millions of low-income beneficiaries would be faced 
with the inability to afford the premiums, deductibles and 
cost-sharing requirements they are responsible for.
    According to the Kaiser Family Foundation, in 2005, over 
half of the people with Medicare lived on less than $20,000 a 
year. Most of their income came directly from their monthly 
Social Security checks. And while I applaud the work that has 
already been done to enroll millions of Americans in these 
critical programs, there is clear evidence that we are not 
doing enough to ensure that everyone who is eligible for these 
benefits is receiving them.
    According to the Congressional Budget Office, participation 
rates for QMB and SLIMB Programs are 33 and 13 percent, 
respectively. That is pretty awful. Furthermore, there could be 
up to 5 million Medicare beneficiaries who are eligible for the 
low-income subsidy under the prescription drug benefit but are 
not enrolled. According to the Kaiser Family Foundation, more 
than 2.3 million of those beneficiaries meet the necessary 
income requirements to qualify for the low-income subsidy but 
are deemed ineligible due to the asset test.
    Now we can and should be doing more to improve 
participation rates in these programs and ensure these 
beneficiaries have access to the health benefits they need and 
deserve. Today we will hear from a number of witnesses about 
ways we can improve these programs, such as adjusting the asset 
test under the Medicare Part D LIS Program so it is not so 
burdensome. We will also hear about the importance of improving 
outreach efforts, streamlining the application process and 
increasing income eligibility limits under the MSP Programs.
    For the past 6 years, President Bush and the previous 
Republican-led Congress have shelled out continuous subsidies 
worth billions of dollars to the prescription drug and 
insurance industries in an attempt to privatize the Medicare 
system. Between Medicare Part D and Medicare Advantage, they 
have made out like bandits in my opinion--these programs have 
been at the expense of the American taxpayer and the Medicare 
beneficiaries themselves. We have talked previously about 
Medicare Advantage and the different payment schedule. The time 
has now come to refocus our attention and target our resources 
more effectively so we can provide the most help to our most 
vulnerable citizens.
    I am looking forward to hearing from the witnesses today 
about these programs and how they are working and how we might 
be able to improve them. I appreciate your being here today, 
and I now recognize our ranking member, Mr. Deal. Before I do, 
let me mention that we do expect to have votes, so it may be 
that we can't finish with our opening statements or may have to 
interrupt the panel because I think the votes are expected 
within the next half hour or so, but we will proceed until we 
hear the bell. So, at this time, I will recognize the ranking 
member, Mr. Deal.

  OPENING STATEMENT OF HON. NATHAN DEAL, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF GEORGIA

    Mr. Deal. Thank you. When I came to Congress in 1993, the 
Medicare Part D monthly premium was $36.60.
    Premiums are set similarly today and are adjusted each year 
in an effort to ensure that Part D premiums compose 25 percent 
of the program's cost. But today, at $93.50 a Medicare 
beneficiary pays almost two and a half times what they paid in 
1993. What has changed since I came to office is the overall 
cost of health care services and in turn the price of the Part 
D program.
    As I am sure everyone in the room is aware, premiums will 
continue to go up each year unless Congress acts to reform the 
health care sector to stabilize the sky-rocketing cost of 
health care services. This hearing focuses on a few programs 
designed to ensure low-income Medicare beneficiaries have 
assistance with their Medicare premiums and cost sharing.
    The Medicare Savings Programs and the Low-income Subsidy 
Program target the near poverty senior population by paying for 
all or part of what is typically the beneficiary's 
responsibility in Medicare. With the rising cost of health 
care, these programs have a role to play to ensure our poorest 
seniors continue to have access to their physicians and 
medications.
    Some of our witnesses today will testify that more could be 
done to enroll seniors in these programs, and I certainly look 
forward to their testimony. However Mr. Chairman I believe more 
could be done to reform the health care industry to stabilize 
premiums for all beneficiaries.
    Additionally, addressing underlying health care costs would 
assist those beneficiaries who may not qualify for a program 
which pays for their deductibles and co-insurance. I do not 
believe the answer to rising premiums and the cost of care is 
simply for the taxpayer to bear this burden by shifting more 
people into the Medicare rolls.
    It is certainly important for the committee to evaluate the 
effectiveness of our existing programs. But it is time for us 
to broaden our focus and evaluate health care reforms which 
address rising costs for patients with and without Medicare.
    Hopefully this would ensure that, in another 14 years, the 
Congress can continue to fulfill its obligation to our seniors 
without forcing them to pay a premium two and a half times what 
they pay today or increasing the burden on already strained 
State and Federal budgets.
    Thank you. I yield back.
    Mr. Pallone. Thank you, Mr. Deal.
    Next we have the gentlewoman from New Mexico.

 OPENING STATEMENT OF HON. HEATHER WILSON, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF NEW MEXICO

    Mrs. Wilson. Thank you, Mr. Chairman. I very much 
appreciate your holding this hearing today.
    In New Mexico, there are about 65,000 people who are 
enrolled in the Medicare prescription drug benefit and in the 
low-income subsidy that we have there. They get their medicines 
for little or no premium and no copay and without the gap in 
coverage. That is about 23 percent of the Medicare population 
in New Mexico, so we have very high participation in the low-
income subsidy program. And it is saving folks a lot of money, 
about $3,300 a year.
    About 95 percent of the seniors in my congressional 
district now have drug coverage either through Medicare Part D, 
a former employer or from the Veterans' Administration, which 
is one of the highest enrollment rates of any congressional 
district in the country. Still there are many more seniors who 
are probably eligible for the low-income subsidy but are not 
enrolled. I want to commend, particularly in New Mexico, the 
Social Security Administration for their efforts to find 
eligible seniors and to help them enroll, particularly a 
wonderful case worker named Eva Lujan who is the liaison with 
the local Social Security office who has done a wonderful job 
in finding seniors who might be eligible. And she has been 
tremendously patient in hundreds of different forms in helping 
seniors get enrolled through traveling offices and working with 
our office and others.
    For some people, the asset test has really prevented them 
from enrolling. And I think this is one of the things we do 
need to look at. In 2007, the asset test of about $11,000 for 
individuals and $23,000 for a couple really may be too low to 
expect people to be able to liquefy those assets and somehow 
spend them on medicine. So we may want to look at increasing 
those limits.
    I think we also need to simplify the application process so 
that seniors can make their way through the paperwork if they 
are actually eligible.
    I introduced legislation earlier this year that would make, 
I think, several important improvements to the Medicare Part D 
drug benefit. And I strongly support the benefit, and we really 
have made tremendous progress in helping people to be able to 
pay for their drugs and using competition in the marketplace to 
keep the premiums low for everyone. That said, there are always 
things that can be improved.
    My legislation would allow States to use Medicare funds to 
pay co-payments on behalf of dual-eligible seniors, would also 
allow the Medicare Part D program to cover benzodiazepines, 
which has been a particular class of drug which was written out 
in the law and probably shouldn't be. It is used commonly for 
seniors to relieve anxiety and treating insomnia and seizure 
disorders, and I think we need to add that back in.
    Medicare savings programs are also saving about 27,000 low-
income seniors in New Mexico on Part D premiums and 
deductibles. I support those programs strongly as well. I look 
forward to seeing how we can make these programs work better, 
particularly how we can improve the communication between 
agencies in the Federal Government, Medicare and Social 
Security so that the Social Security folks know who is 
registered in what program in a fairly tight turn around 
because I think the way it is set up now we have often got 
agencies who are not communicating, who are not sharing 
information about eligibility of benefits, and enrollment and 
it makes it much more confusing for seniors and their families. 
And if we can even improve that part and make it harder to 
apply, I think we would deal with a lot of the problems that 
are driving the low enrollment rates as we haven't.
    Thank you, Mr. Chairman, I appreciate very much your 
holding this hearing.
    Mr. Pallone. Thank you.
    I recognize our vice chair, the gentleman from Texas.

   OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Green. Thank you, Mr. Chairman, for holding this 
hearing on the Medicare savings programs and low-income subsidy 
available for seniors participating in Part D prescription drug 
benefit.
    These programs provide low-income seniors with much-needed 
financial assistance with their premiums or other cost-sharing 
obligations under Medicare. We have a fairly long history of 
Medicare savings programs in the groups of beneficiaries they 
seek to assist, specifically the qualified Medicare 
beneficiaries, the specified low-income Medicare beneficiaries 
and qualifying individuals. Despite the fact that this 
assistance has long been available to low-income seniors, 
enrollment levels unfortunately remain low. Premium and cost-
sharing assistance for qualified Medicare beneficiaries have 
been available for nearly 20 years, yet only one-third of 
beneficiaries eligible for this assistance take advantage of 
it. Even worse, only 13 percent of the specified low-income 
Medicare beneficiaries take advantage of the Part D premium 
assistance available to them.
    We all thought the enactment of Part D benefit and the 
availability of a low-income subsidy would help increase 
enrollment levels in other Medicare savings programs. 
Enrollment levels are higher for low-income subsidy, with about 
two-thirds of eligible Medicare beneficiaries taking advantage 
of the subsidy. Yet we haven't seen a corresponding increase in 
enrollment in Medicare savings programs.
    A big problem is the fact that most beneficiaries seek the 
extra help for Part D through the Social Security 
Administration which neither screens beneficiaries for 
eligibility for Medicare savings programs nor refers them to 
their State Medicaid Program for screening.
    We need to streamline this process to make sure that folks 
are taking advantage of all the extra help available to them. 
In my area of Houston, we have undertaken an education and 
outreach enrollment campaign to help low-income Medicare 
beneficiaries maximize their Medicare benefits. This effort has 
been coordinated through Gateway to Care, a local community 
access collaborative that was started with Federal dollars 
through the community access program which this committee 
worked to create.
    Gateway to Care was one of the nine community organizations 
across the country to receive a $100,000 grant as part of my 
Medicare Matters initiative in the National Council on Aging, 
the Access to Benefits Coalition and AstraZeneca to develop 
innovative approaches to identify and reach out to low-income 
people. In Houston, Harris County, Texas, we know there are 
roughly 60,000 Medicare beneficiaries who qualify for these 
programs but are not involved. Houston, Harris County, have 
close knit communities and Gateway to Care is utilizing 
community health workers who have intimate knowledge of our 
medically underserved and are trusted with these communities to 
reach out to beneficiaries.
    Gateway to Care is also utilizing our area's 211 system 
ensuring that inquiries directed toward knowledgeable folks in 
our community to assist our low-income seniors. The community 
approach is critical to any outreach and enrollment, and I 
think My Medicare Matters demonstration will teach us a lot 
about what works and about what can be improved.
    Mr. Chairman, again, I thank you for calling the hearing 
and our witnesses today, and I yield back my time.
    Mr. Pallone. Thank you.
    I recognize the gentlewoman from Tennessee.

OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF TENNESSEE

    Mrs. Blackburn. Thank you, Mr. Chairman, I thank you for 
the hearing today.
    And I want to say welcome to all of our witnesses. It is 
important to recognize that programs such as the Medicare 
Savings Program and Part D low-income subsidy were created to 
address the needs of a specific population, and they have 
provided great benefit to those low-income individuals who 
might otherwise go without their medication. And as we have 
seen with programs like Medicare Advantage, the Government has 
been successful in providing access to quality care for low-
income individuals.
    Today, instead of discussing how CMS is progressing with 
the administration on these programs, we are listening to a 
discussion on further expansion of entitlement programs. This 
is exactly what happened in my home State of Tennessee with the 
TennCare Program, Tennessee's State-wide nearly universal 
health care service run by the State.
    In 1994, Tennessee implemented managed care in its Medicare 
Program and used savings anticipated from the switch to expand 
insurance coverage to the uninsured, uninsurable adults and 
children. The State basically allowed carte blanche enrollment 
to anyone. And those people could never get out of the system, 
even when they decided they wanted to get out of that system.
    Since then, Tennessee has faced financial peril in numerous 
unsuccessful attempts to reign in the State's runaway health 
care system. State spending accelerated from $2.5 billion in 
1995 to $8 billion in 2004 for TennCare alone.
    To date, TennCare has consumed over one-third of our 
State's budget.
    Combined State and Federal funding could not sustain 
TennCare's rising costs, and the program effectively lowered 
the quality of health care available to all Tennesseans. If 
Tennessee can't even pay for the program it has, how is the 
Federal Government going to pay for the unsustainable expansion 
of current entitlement programs down the road?
    I can tell you exactly what continued expansion in Medicare 
and Medicaid will do to our Nation using TennCare as a model. 
Since TennCare's inception, Tennessee's doctors and hospitals 
charged that the $8 billion program was underfunded by the 
State and Federal governments, forcing providers to bear 
disproportionately higher costs. Rampant fraud and abuse have 
plagued the problem. Hospitals have gone out of business, and 
the poor cannot find providers to take care of them.
    Mr. Chairman, I know what runaway health costs and a broken 
health care delivery system look like. Health care and TennCare 
are clear evidence that Government managed health care programs 
allow for serious mismanagement, cost overruns and inadequate 
service. We have to be very diligent in the oversight. Rather 
than encouraging expansion of inefficient, ineffective 
Government bureaucracy in every day health care, I hope we will 
promote economic growth in the health care marketplace through 
the private sector, an area that has proven time and again to 
foster competition, reduce cost and provide choices and options 
for our consumers. I thank you, Mr. Chairman, for the hearing. 
And I yield the balance of my time.
    Mr. Pallone. Thank you.
    Mr. Matheson.
    Mr. Matheson. Mr. Chairman, I appreciate you calling the 
hearing. I look forward to hearing from this panel, and I am 
not going to make any more opening statement than that. I yield 
back.
    Mr. Pallone. Thank you.
    Mr. Burgess.
    Mr. Burgess. Thank you, Mr. Chairman. I will reserve time 
for questions.
    Mr. Pallone. Ms. Solis.

 OPENING STATEMENT OF HON. HILDA L. SOLIS, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Solis. Thank you, Mr. Chairman. I do want to make a 
comment. I want to thank you for having this hearing and to 
welcome our witnesses that are here today. It is very important 
that we have the discussion on Medicare savings plans and low-
income subsidies for our seniors. I represent a very diverse 
district, highly low-income, heavily Hispanic and large Asian 
population, so of course, you can imagine the kind of problems 
that they confront. They deal with problems such as language 
access, not being able to access current programs that are 
available and also inadequate numbers of staff, adequate staff 
available at these key sites where people can gain information 
and trust.
    And one of the things I am working on this year, Mr. 
Chairman, is a piece of legislation to look at how we can 
provide support to community workers, community organizers that 
can help us go out and reach these seniors, particularly in the 
hard-pressed areas where we could help navigate them through 
the system to apply where appropriate for these programs and to 
better understand what options they have. Of course, premiums 
will vary over various programs, and I think that the more 
tools and information that we give our community in their 
language that is legitimate in terms of linguistic and 
culturally competent services, we know in the long run we can 
save a lot of money.
    So I am promoting that, and I look forward to listening to 
the testimony from you, and I will submit the remainder of my 
statement. Thank you, Mr. Chairman I yield back.
    [The prepared statement follows:]

Prepared Statement of Hon. Hilda L. Solis, a Representative in Congress 
                      from the State of California

    Mr. Chairman, thank you for holding this hearing today to 
discuss the importance of Medicare Savings Plans and Low Income 
Subsidies for our seniors and disabled individuals. Seniors 
were promised that after a lifetime of working and paying into 
Medicare, they would have access to health care coverage during 
their retirement years, regardless of their geographic 
location, their age, or their income.
    Today, more than 44 million seniors and people with 
permanent disabilities depend on Medicare to meet their health 
needs. However, health care costs have skyrocketed, and Part B 
premiums and other out-of-pocket expenses are quickly becoming 
unaffordable. For instance, Part B premiums are $93.50 this 
year, which is over $1,100 per year. In addition, the Part A 
deductible is almost $1,000.
    The 2003 Medicare Current Beneficiary Survey found that 
Medicare beneficiaries in poor or fair health had $2,980 in out 
of pocket spending, in addition to another $661 in premiums. 
This is particularly troublesome given the importance of access 
to quality, affordable health care in minority communities 
which often encounter greater burdens of disease. They 
consequently have greater need for medical services but are 
less likely to afford them.
    Low-income Medicare beneficiaries are disproportionately 
people of color who need help with paying for Medicare's cost-
sharing, including premiums, deductibles, and coinsurance. 
Although Latinos make up only 6 percent of all Medicare 
beneficiaries, more than 14 percent are low income seniors. 
This is why the Medicare Savings Programs and Low Income 
Subsidy Program are critical for our vulnerable populations.
    We need to make sure that people are getting the financial 
help they need. We must change the Low Income Subsidy's asset 
requirement so that seniors still have incentives to save for 
retirement We must also work to help the 3 million people who 
do not have drug coverage but are eligible for the subsidy.
    Appropriate outreach to inform hard to reach seniors about 
these programs is essential. Having timely access to health 
services and prescription drug coverage can be a matter of life 
or death.
    I thank the witnesses for coming today, and I look forward 
to hearing their recommendations about how we can reduce 
barriers to enrollment for these programs.
    I yield back the balance of my time.
                              ----------                              

    Mr. Pallone. Thank you.
    The gentleman from Arizona.

OPENING STATEMENT OF HON. JOHN B. SHADEGG, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF ARIZONA

    Mr. Shadegg. Thank you, Mr. Chairman, and thank you for 
holding this hearing. When the Congress contemplated the Part D 
in the Medicare Modernization Act, I was firmly of the belief 
that there was a population in America which desperately needed 
help. Those for whom people were making a decision or they were 
forced to make a decision between paying their rent or 
purchasing their drugs; those who were forced between buying 
food for their table or purchasing their medications. And I 
think we all know sadly many of these people would make the 
necessary choices of paying for their rents or purchasing their 
food rather than buying the drugs they need. That, of course, 
is counterproductive and damages their health.
    So I think it is important that we look at how the program 
is operating. And I commend you for holding this hearing, and I 
also welcome our witnesses.
    I have a concern as the evidence has mounted that 
enrollment continues to be a problem. It has been an issue in 
many Government programs. We see it as an issue in the SCHIP 
where we just continue to have a difficult time encouraging 
people or getting people to enroll.
    And anecdotally, I know that in my own State of Arizona, 
when the SCHIP was enacted, time and again, we ran into this 
problem where people said, I would just as soon not enroll. I 
know I can go here and get care. I know I can go there and get 
care. And I don't want to go through the paperwork burden of 
enrolling.
    So it seems to me it is incumbent upon us to look at ways 
to try to make sure that people are getting the benefits they 
are seeking and to get enrolled in these programs.
    In that respect, I would like to make a comment, Mr. 
Chairman, about an initiative I have been pushing since I 
entered Congress, and that is trying to make the change from 
life before Medicare to life after Medicare less dramatic.
    In that respect, I have introduced in Congress now for the 
past 10 years legislation that would give a tax credit, and 
specifically a refundable tax credit, to Americans to get 
health care and to purchase their drugs. It is important to 
understand that a refundable tax credit is a tax credit where 
the Government simply hands you cash and that what this program 
would look at is that the Government would say to anyone, if 
you will go out and buy a health insurance plan, and it could 
be a plan that has at least a certain minimum drug coverage, we 
will allow you either to reduce the amount of taxes you pay, 
but in this instance, for the poor--the audience we are talking 
about for this hearing--it will say, we will pay and we will 
actually give you the cash to go buy that plan. It seems to me 
that one of the difficulties in getting people to enroll in a 
Government plan is that they find it confusing and they find it 
difficult and they don't enjoy it or they resist the 
bureaucracy of enrolling in such a program.
    If in fact the poor in America, those that we are talking 
about, those who are in need of assistance to buy their 
everyday drugs, those forced into the decision of making a 
decision between paying the rent and buying the groceries and 
buying the drugs they need, if they were to know ahead of time 
that even before they became Medicare eligible they were 
getting a refundable tax credit, that is cash to purchase the 
drug benefit they needed and the Medicare health care or health 
care plan they needed and then, once they become Medicare 
eligible, the same thing were true, I believe we might overcome 
many of the enrollment problems.
    And I believe that that type of a system which provides 
payment directly for their health care plan or, in this 
instance their drug program, would be a step forward and might 
help us overcome the enrollment issue we face. So I look 
forward to hearing the testimony. I do have a conflicting 
hearing which I might have to step out from time to time, but I 
thank you, Mr. Chairman, for holding this hearing.
    Mr. Pallone. Thank you. The gentlewoman from Wisconsin.

 OPENING STATEMENT OF HON. TAMMY BALDWIN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF WISCONSIN

    Ms. Baldwin. Thank you, Mr. Chairman, and thank you to the 
witnesses who join us today. I appreciate the fact that we are 
highlighting these important programs, whether we are talking 
about the Medicare savings programs or the Part D low-income 
subsidy, they all serve an important purpose which is to ensure 
that low-income seniors have some help in paying for their 
premiums, deductibles and copayments or more simply these 
programs make sure that low-income seniors can access health 
care.
    These programs are vitally important, and I look forward to 
hearing about ways to improve these programs and more 
specifically to improve coordination between these programs.
    I am particularly interested in hearing more from our 
witnesses regarding the asset test part of the Part D low-
income subsidy. This asset test penalizes those seniors who 
have saved a little bit of money in the bank for a rainy day. 
This might not be something that my generation and those 
younger are so good at. But our seniors, the Greatest 
Generation, they know the value of a penny saved. And I have 
heard from many seniors in Wisconsin who applied for the Part D 
low-income subsidy and were then denied because of their modest 
possessions. Maybe it is a small house that they have owned for 
the last 40 years or a small savings account, but these are not 
seniors with millions of dollars in the bank by any means.
    We shouldn't be telling our seniors that, in order to get 
help paying their Medicare costs, they have to give up all of 
their modest financial security. This isn't right. And I look 
forward to the committee addressing this issue.
    Additionally, I think that we should be making it as easy 
as possible for all of our seniors to enroll in these programs. 
Burdensome paperwork and lengthy application processes will 
only deter those who may need the help the most from seeking it 
in the first place. So thank you to the witnesses for their 
willingness to join our discussion today. I look forward to 
hearing your suggestions on how we can improve these programs 
to make sure they help even more seniors in affording their 
health care. Thank you, Mr. Chairman.
    Mr. Pallone. Thank you. The gentleman from Pennsylvania.
    Mr. Murphy. I am going to reserve mine for the record. I am 
looking forward to hearing the testimony, Mr. Chairman.
    Mr. Pallone. Mr. Allen just came in.
    Mr. Allen.
    Mr. Allen. Mr. Chairman, I will waive my opening statement.
    Mr. Pallone. OK, thank you. I think we are completed with 
the opening statements by the members and any other statements 
for the record may be included at this time.
    [The prepared statements of Messrs. Dingell and Towns 
follow:]

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    Mr. Pallone. We will now turn to our witnesses.
    And first of all, welcome to all of you. Thank you for 
being here today and let me do a little introduction of each of 
you. Starting on the left, or my left, is Ms. Monica Sanchez, 
who is deputy director of the Medicare Rights Center here in 
Washington. Mr. John Coburn, who is director for the Make 
Medicare Work Coalition, health and disabilities advocates, and 
he is from Chicago, Illinois. And then we have Ms. Lilla 
Sassar, who is a beneficiary, and she is from Alabama. And then 
we have Gail Clarkson, who is the chief executive officer of 
the Medilodge Group. And she is from Bloomfield Hills, 
Michigan. She is testifying on behalf of the American Health 
Care Association. And last, is Dr. N. Joyce Payne, who is a 
member of the Board of Directors of AARP, and she is based here 
in Washington, DC.
     Let me say that we will have 5-minute opening statements, 
and they become part of the hearing record. And you may, at the 
discretion of the committee, submit additional statements or 
comments in writing for inclusion in the record, and I will 
start with Ms. Sanchez.
    Thank you.

 STATEMENT OF MONICA SANCHEZ, DEPUTY DIRECTOR, MEDICARE RIGHTS 
                     CENTER, WASHINGTON, DC

    Ms. Sanchez. Chairman Pallone, Ranking Member Deal, members 
of this committee, thank you for this opportunity to testify on 
the Medicare Savings Program and Extra Help.
    The Medicare Rights Center is the largest independent 
source of health care information and assistance for people 
with Medicare in the United States. We know, from the 
experience of the people we serve, that the assistance 
available through Extra Help and the Medicare Savings Program 
enables poor Americans to obtain the medical care they need and 
the medicines they are prescribed. Access to these programs can 
mean a healthy life instead of one of illness and premature 
death.
    People who are eligible for Medicare Savings Program are 
more likely to be African American or Latino. They are more 
likely to be an older female living alone and in poor health. 
The good news is that those who are eligible and enrolled are 
more likely to see a doctor and other health care provider and, 
as a result, they have improved health.
    Just last week, an MRC counselor at the One Stop Senior 
Center on West 90th Street in New York met Altagracia Lopez. 
Ms. Lopez is 72 years old. Born in the Dominican Republic, she 
has lived in the U.S. for 40 years, working in a factory, 
stitching together children's clothes. She gets by on $343 a 
month, $100 in food stamps and lives in public housing.
    When Ms. Lopez had original Medicare and Medicaid, her 
doctor visits were free. But she was still paying the Part B 
premium because she was not enrolled in an MSP. Things got 
worse when she was tricked into enrolling in a Medicare HMO 
which charged her up to $25 for doctor visits. The plan lost 
its record of Ms. Lopez's eligibility for Extra Help which she 
had because she is enrolled in Medicaid. Instead of co-payments 
of a few dollars under Extra Help, she was asked to pay $127 
for a medicine to prevent blood clots and $42 for her diabetes 
medicine.
    We were able to convince her HMO that it is required to 
charge Ms. Lopez the $1 and $3 Extra Help co-payments so she 
was able to get the medicine she needs--to also get the 
medicine she needs to control her high blood pressure. We also 
enrolled Ms. Lopez in the Qualified Medicare Beneficiary 
Program, QMB, and helped her dis-enroll from the HMO. As a 
result, she will no longer have the Part B premium deducted 
from her monthly Social Security check and does not have any 
out-of-pocket costs when she goes to her doctor.
    Ms. Lopez's story illustrates a common problem, persistent 
breakdowns in data exchanges between State Medicaid offices, 
the Centers for Medicaid and Medicare Services, the Social 
Security Administration and the companies providing the Part D 
benefit. These result in low-income people with Medicare who 
should be receiving Extra Help instead facing deductibles and 
co-payments that they cannot afford.
    Ms. Lopez's story also shows the complicated interaction 
between Medicaid, Medicare Savings Program and Extra Help and 
how even individuals who are enrolled in some assistance 
programs are often not getting all the help that they should 
be.
    Another of our clients is Ms. H, a widow who lives in 
Manhattan, New York. She is 74 years old and a typical example 
of someone whose assets disqualify her for Extra Help. She 
receives $400 a month from Social Security and works part-time 
to earn an additional $500 to make ends meet. Because she has 
$12,000 in assets, just $292 over the limit, she is not 
eligible for Extra Help. But because she lives in New York 
State, which has eliminated the asset test for the QI Program, 
we were able to get her enrolled in Extra Help through this 
back door.
    For every person we enroll in MSPs or Extra Help, there are 
millions more who do not know the help is available or who do 
not know how to apply for it. Nationally, there are still 
between 3.4 and 4.7 million people who qualify for this program 
but are not enrolled. According to CMS estimates, there are 
nearly 22,000 such people in the counties that make up New 
Jersey's sixth district and over 16,000 in the 15 counties of 
Georgia's ninth district. The same story can be told district 
by district.
    How do we fix this situation?
    First, Congress should remove the asset test from both the 
MSP and Extra Help Programs and allow people to qualify based 
solely on income criteria. Legislation introduced by 
Representative Lloyd Doggett, Democrat of Texas, takes a small 
but meaningful step in the right direction by raising the 
maximum allowable assets for Extra Help and takes some 
important steps towards simplifying the Extra Help application.
    Second, as Congress moves to improve the Extra Help 
Program, it should also take steps to bring the Federal 
eligibility criteria for MSPs in line with these new, more 
reasonable standards for Extra Help. Individuals enrolled in 
MSP are ``deemed'' eligible for Extra Help. If criteria were 
aligned, then deeming could go both ways. With two-way deeming, 
people with Medicare would actually receive the help that 
Congress promised them.
    Third, Congress must make sure CMS exercises its oversight 
responsibilities to ensure the plans are not overcharging their 
low-income enrollees. It also has to make sure the agencies fix 
these data exchange problems. The alignment of eligibility 
criteria between MSPs and Extra Help will simplify and 
streamline these programs and contribute to the solution.
    Thank you.
    [The prepared statement of Ms. Sanchez follows:]

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    Mr. Pallone. Thank you very much.
     Mr. Coburn.

    STATEMENT OF JOHN COBURN, DIRECTOR, MAKE MEDICARE WORK 
     COALITION, HEALTH & DISABILITY ADVOCATES, CHICAGO, IL

    Mr. Coburn. Chairman Pallone, Ranking Member Deal and 
distinguished members of the committee, thank you for giving me 
the opportunity to talk to you today about these two important 
programs and their impact on people with disabilities.
    My name is John Coburn, and I am a senior attorney for 
Health & Disability Advocates and I am the director of the 
Illinois-based Make Medicare Work Coalition. My agency, our 
coalition and its partners have assisted hundreds of thousands 
of beneficiaries in Illinois and other parts of the country 
with Medicare Part D enrollment and advocacy over the last year 
and a half. While we assist and advocate for all Medicare 
beneficiaries, I want to focus my testimony on Medicare 
beneficiaries with disabilities under the age of 65.
    There are approximately 7 million younger individuals with 
disabilities enrolled in Medicare, representing approximately 
16 percent of the Medicare population. Most of these 
individuals qualify for Medicare because of current or former 
eligibility for Social Security Disability Insurance SSDI and 
completion of the required 24-month waiting period. For these 
younger beneficiaries with disabilities, the Medicare Savings 
Program and low-income subsidy program are very important.
    The average SSDI check is $950 a month. If the average SSDI 
beneficiary was forced to pay all of the Medicare cost sharing, 
Medicare would simply be unaffordable. With the assistance of 
these programs, many individuals are able to access proper and 
necessary care under Medicare.
    In my limited time before you, I want to focus on one very 
important issue to Medicare beneficiaries with disabilities and 
that is employment's impact on continuing eligibility for this 
program. I did not get a chance to read Ms. Sanchez's testimony 
before, but she did mention, I think, in both of her examples 
the individuals were working. So this is a big issue, 
particularly in the younger disability community.
    Individuals with disabilities want to live securely and 
safely in their communities. Employment within the community is 
a key component of integration into the broader communities in 
which people live. A 2004 National Organization on Disability/
Harris Survey, according to that survey, states that only 35 
percent of people with disabilities reported being employed, 
yet 72 percent of individuals with disabilities surveyed wanted 
to work.
    Over the years, Congress, the Social Security 
Administration and the Centers for Medicare and Medicaid 
Services have worked to create and implement programs and 
policies that remove barriers to employment of working-age 
Medicare beneficiaries. The hallmark legislation for this was 
the Ticket to Work and Work Incentives Improvement Act of 1999, 
which included provisions that extended Medicare eligibility 
for people who return to work.
    Through this and other legislation and regulations, the 
Social Security cash programs and Medicaid fell in line and 
created an atmosphere where working was rewarded and a path 
towards greater self-sufficiency was possible. Unfortunately, 
our Medicare Savings Program and our low-income subsidy program 
which came along later don't fall in line with this process. 
And since Medicare Part D has started, the low-income subsidy 
has erected a new barrier, wherein people don't want to go back 
to work for fear of losing their low-income subsidy.
    Increases in earned income, even slight, can disqualify 
people from eligibility for these two programs. We put people 
in a catch-22. Stay at home, do nothing and keep affordable 
insurance or go to work and lose the affordable part of that 
insurance that allowed you to work to begin with.
    And what choice do we leave for individuals with HIV, 
multiple sclerosis and mental illness? Ms. B is an individual 
in Ohio who is currently receiving $850 in SSDI income, QMB 
assistance and the Low-Income Subsidy. Ms. B lives with a 
mental illness, and she wanted to go back to work. She actually 
went out and found full-time employment. She then discussed her 
situation with advocates and discovered that if she were to 
take that employment, she would lose her QMB assistance and her 
Low-Income Subsidy, thereby making it nearly impossible for her 
to afford the health care that was provided to her that got her 
to the point where she can work to begin with.
    There are Medicaid buy-in programs in 32 of our States. 
Many of the members live in States where those programs exist, 
but there are many others who don't, including Georgia, 
Florida, Ohio and North Carolina. In those States, people can 
purchase Medicaid; and it gives them the dual-eligible status 
where they can get the Low-Income Subsidy. In those other 
States, that is not possible.
    But it doesn't have to be this way. In the SSI, 
Supplemental Security Income, Medicaid world, we allow people 
through something called 1619(B) to go back to work and keep 
their Medicaid with no spend-down until they reach a State 
threshold. The SSDI beneficiaries with the Low-Income Subsidy 
and the Medicare Savings Program do not have this option. I 
hope that eventually the programs will align, and the SSDI 
beneficiaries will be encouraged and go back to work and keep 
their affordable health care.
    Thank you.
    [The prepared statement of Mr. Coburn follows:]

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    Mr. Pallone. Thanks a lot. We will hear from Ms. Sassar. 
Thank you for being here today.

      STATEMENT OF LILLA SASSAR, BENEFICIARY, SYACAUGA, AL

    Ms. Sassar. I am so grateful that I have an opportunity to 
tell my story. It is very short, but it has impact, and you can 
understand it real well.
    I am Lilla Sassar, as you all know, from Syacauga, Alabama. 
I am 83 years old, and I am enrolled in HealthSpring Medicare 
Advantage Plan. It is the best thing I have ever had since I 
have been on Social Security.
    I am on a very limited income, and I do get assistance from 
the State. My Social Security premium is paid by the State of 
Alabama.
    Now that I am enrolled with HealthSpring, I can afford to 
put food on the table and buy my medicines, too, and go to the 
doctors when I need to. I go to the doctor, and I won't have to 
worry about my deductibles, about my Blue Cross/Blue Shield and 
about my medication. I won't pay because I have no co-payment. 
It is so terrible to have to worry about these things.
    I also get to exercise through my HealthSpring membership 
at a local hospital. I get to stay in shape and see my friends 
with the Silver Sneakers.
    HealthSpring even has a van pick me up and take me to the 
doctor if I have to go to a doctor. This is good because I have 
a hard time getting to the doctor. If they didn't offer this 
benefit--it sure cuts down on expensive gas. They bring me back 
home, too.
    I wish everyone could have a program like HealthSpring. 
People like me that don't have a lot of money can still see the 
doctor and get medicines and don't have to worry. This program 
that I am on would help a lot of people, and I am so glad I had 
an opportunity to have a little input for others, not just for 
myself but for others, too. They need to get on HealthSpring.
    Thank you for listening to me.
    [The prepared statement of Ms. Sassar follows:]

                       Statement of Lilla Sasser

     I am an 83 year old woman enrolled in HealthSpring 
Medicare Advantage Plan
     I am on a very limited income and used to get 
assistance from the State.
     Now that I am enrolled with HealthSpring, I can 
afford to put food on the table and buy my medicines and go to 
the doctor when I need to.
     I get to go to the doctor and not worry about how 
I will pay because I have a $0 copayment.
     I also get to exercise through my HealthSpring 
membership at the local YMCA or other facilities. I get to stay 
in shape and see my friends.
     HealthSpring even has a van pick me up and take me 
to the doctor and pick up my medicines. This is good because I 
would have a hard time getting to the doctor if they didn't 
offer this benefit.
     I wish everyone could have a program like 
HealthSpring. People like me that don't have a lot of money can 
still see the doctor and get medicines and not have to worry.
    Thank you for listening.
                              ----------                              

    Mr. Pallone. Thank you very much. We appreciate you being 
here today.
    Let me just say what we are going to do. We are going to 
try to do both of the other two panel members and then take a 
break. There is a 15-minute vote followed by four 5-minute 
votes, and those are the last votes of the day. So that will 
probably take us maybe 45 minutes. But let's continue with the 
testimony, and then we will break and come back.
    Ms. Clarkson, thank you.

   STATEMENT OF GAIL CLARKSON, CHIEF EXECUTIVE OFFICER, THE 
    MEDILODGE GROUP, BLOOMFIELD HILLS, MI, ON BEHALF OF THE 
            AMERICAN HEALTH CARE ASSOCIATION (AHCA)

    Ms. Clarkson. Thank you, Mr. Chairman, Ranking Member Deal 
and members of the committee. I appreciate the opportunity to 
speak to you today on behalf of the American Health Care 
Association and NCAL.
    My name is Gail Clarkson. I am the chief executive officer 
of Medilodge. Our 14 skilled nursing and 4 assisted living 
facilities employ 2,500 individuals and care for more than 
2,300 patients and residents in the State of Michigan.
    I have worked as a nursing home administrator, director of 
nursing and an intensive care nurse. I know what it takes to 
provide high-quality care for seniors and people with 
disabilities, even when the payments do not cover the care and 
services they require. I mention this because Medicaid 
underfunds long-term care by approximate $13 per patient per 
day nationally and because quality depends on stable funding, 
something CMS has repeatedly acknowledged.
    Most nursing home patients are both poor and elderly, 
relying on Medicaid and Medicare to pay for their long-term 
care. So nursing homes have worked long and hard to coordinate 
care for these dually eligible patients and residents to ensure 
that these vulnerable Americans get the best care available.
    AHCA and NCAL continue to work closely with CMS on Medicare 
Part D. I am proud to say that no patient or resident being 
cared for in a skilled nursing facility went without his or her 
medication during the transition to the new prescription drug 
benefit. I do not know if the same can be said for the other 
poor elderly.
    Dually eligible beneficiaries in assisted living or 
residential care facilities or other home-like settings often 
only have a small personal needs allowance of a few dollars a 
month, so co-pays of even $1 or $3 can add up when that person 
needs multiple prescriptions. Like nursing home patients, 
assisted living residents need, on average, approximately nine 
medications a day.
    The Home and Community Services co-payment Equity Act 
recently introduced in the Senate would eliminate Part D co-
pays for these low-income Americans and would put dually 
eligible home and community-based individuals on par with those 
in nursing homes who have no co-pays under Part D. We urge the 
members of the committee to enact companion legislation.
    Programs like Medicare Part D and the Low-Income Subsidy 
are critical parts of the health care safety net in this 
country, but what I have found in practice is that accessing 
these programs can be challenging, as was the case with the 
auto-enrollment of dually eligible nursing home residents under 
Part D.
    For example, we spent considerable time and effort 
identifying which Part D plan patients had been automatically 
enrolled in, and then in determining whether or not that plan 
met the patients' needs. AHCA and NCAL worked with CMS on what 
it calls the three-pronged approach to assure that the poor 
elderly entering the facility and needing prescription drug 
coverage could access their benefits under Medicare and 
Medicaid.
    Our experience shows that Low-Income Subsidy can take 
effect in only a couple of weeks, whereas it can be months 
before Medicaid eligibility is determined. But, in my 
experience, I have found that patients, families and health 
care providers are unaware of these benefits or even know how 
the Medicare and Medicaid benefits work with respect to long-
term care needs. So we often must educate and assist patients 
in accessing these critical benefits.
    AHCA and NCAL understand that retrofitting a new benefit is 
not easy. That is why we have looked at ways to reform Medicare 
and Medicaid to better meet the needs of a swiftly aging baby 
boom generation. Our recommendations are included in my written 
testimony.
    Providing high-quality long-term care is a top priority for 
me and for AHCA and NCAL members like me, who are participating 
in a national campaign to improve quality of care and quality 
of life for our patients, residents and staff alike.
    We are proud of our commitment to quality and are proud the 
data is proving our commitment is real. Nursing Home Quality 
Initiative data shows improvement in pain management, reduced 
use of restraints, decreased number of patients with depression 
and improvements in physical conditions such as incidents of 
pressure ulcers. Last week, independent satisfaction data was 
released that shows 82 percent, the vast majority of nursing 
home residents and families, would rate care as good or 
excellent.
    Even as we strive to deliver the best care possible, we 
still face considerable challenges and seek your assistance in 
meeting those needs. We are working to be transparent for our 
consumers. We ask CMS to be similarly transparent in the 
criteria it uses to oversee the care we provide. We also ask 
that CMS not place paperwork over patient care and thank 
Chairman Dingell and those who have already called on CMS to 
redress its final rule on blood glucose monitoring.
    We are proud of our successes and acknowledge there remains 
far more to do. Mr. Chairman, I have never seen our profession 
more committed to ensuring we continue to improve care quality.
    In short, we recommend working toward a system that 
delivers an array of long-term care services, adequately 
funded, administered by knowledgeable, quality-driven providers 
and where beneficiaries move seamlessly to a long-term care 
spectrum which every American is likely to need at some point 
in his or her life.
    AHCA and NCAL stand ready to work with your committee and 
with all who have a stake in the future of our long-term care 
delivery system in the future. Thank you.
    [The prepared statement of Gail Clarkson follows:]

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    Mr. Pallone. Thank you, Ms. Clarkson.
     Dr. Payne.

STATEMENT OF N. JOYCE PAYNE, MEMBER, BOARD OF DIRECTORS, AARP, 
                         WASHINGTON, DC

    Ms. Payne. Chairman Pallone and Ranking Member Deal, I am 
Dr. Joyce Payne, a member of the Board of Directors of AARP.
    Thank you for inviting us to testify on the need to improve 
the Part D Low-Income Subsidy and other Medicare programs for 
people with limited incomes.
    The extra help the LIS provides to those least able to 
afford their drugs is one of Part D's most important features 
and a key factor in AARP's continuing support. But the LIS 
Program has a serious flaw, an asset test. No one with even $1 
more than $11,710 in savings or couples with more than $23,410 
can qualify. Because of the asset test, the LIS application 
form is eight pages of daunting and invasive questions that are 
difficult for many people to answer. That is a serious barrier 
even for those who meet the asset test's unreasonable limits.
    Similar problems plague the Medicare Savings programs, 
known as MSP, that help pay other Medicare cost-sharing 
requirements. As with LIS, millions of beneficiaries living on 
very limited incomes are not getting the help they need from 
these vital programs.
    In addition, there is only limited coordination between LIS 
and MSP, even though they serve primarily the same populations. 
Beneficiaries enrolled in MSP are automatically eligible for 
and enrolled in LIS. However, Social Security does not screen 
LIS applicants to see if they are also eligible for MSP. This 
is a serious missed opportunity, as MSP criteria in several 
States are less restrictive than LIS criteria, and some States 
have effectively eliminated the asset test all together. Thus, 
many who are eligible for LIS under their State's MSP rules are 
being improperly rejected because SSA, the Social Security 
Administration, of course, only looks at LIS criteria.
    AARP believes there should be no asset tests in Medicare. 
As a matter of public policy, we should encourage people to 
save for retirement, not penalize those who do with an asset 
test. AARP also believes that there should be full coordination 
between the LIS and MSP programs.
    Until the asset test is fully eliminated, there are interim 
steps Congress can take to reduce the barrier it creates. AARP 
supports the Prescription Coverage Now Act, introduced by 
Representative Lloyd Doggett. This legislation takes solid 
first steps toward our goal of eliminating the asset test, 
increasing enrollment and improving coordination between the 
LIS and MSP. This legislation would increase the asset test 
limits to $27,500 for individuals and $55,000 for couples. This 
will provide relief to millions of beneficiaries who truly need 
the help the LIS can provide. Even those who did not oppose an 
asset test in Medicare's drug plan agree that current limits 
are far too low.
    This legislation would also streamline the LIS application. 
It would authorize Social Security officials to use income data 
it already has to target LIS outreach efforts more effectively. 
It also would require SSA to screen LIS applicants for MSP 
eligibility.
    AARP is committed to working to enact this important 
legislation this year and eventually completely eliminating the 
asset test for both LIS and MSP. We look forward to working 
with the Members of Congress on both sides of the aisle to 
improve the Medicare drug benefit and Medicare Savings Program 
to ensure that all Medicare beneficiaries living on limited 
incomes get the extra help they need so desperately and 
deserve.
    We thank you for this opportunity.
    [The prepared statement of Ms. Payne follows:]

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    Mr. Pallone. Thank you all.
    Now we are going to take five votes. It will take us 
between a half hour and 45 minutes, probably more like 45 
minutes, but we will ask you to stay so we can come back and 
ask you some questions.
    Thank you. The subcommittee is in recess.
    [Recess.]
    Mr. Pallone. The subcommittee is called to order again.
    We are going to have questions from the various Members. I 
am pretty sure most of them will come back.
    I will start by recognizing myself for 5 minutes, and I 
wanted to start out with Dr. Payne.
    We heard from Ms. Sassar that she likes her Medicare 
Advantage private plan. She receives some additional benefits 
that she described and I am certainly glad about that. The 
truth, however, is that the Medicare beneficiaries who choose 
to remain in traditional Medicare, 83 percent of all 
beneficiaries, are forced to subsidize these additional 
benefits, such as Ms. Sassar's, because of the way private 
plans and Medicare are financed.
    In fact, each Medicare beneficiary who chooses to remain in 
traditional Medicare is forced to pay $24 extra every year in 
Part B premiums to subsidize the extra benefits that only the 
17 percent of beneficiaries enrolled in plans receive. And 
those additional dollars are used to subsidize private plans, 
administrative costs, marketing costs, aging commissions, 
profits in addition to some extra benefits. And by way of 
contrast, the Medicare Savings Program provides low-income 
seniors with a more generous benefit than Medicare Advantage 
plans. Under the MSP, the lowest income seniors will have their 
Part B premiums and Medicare cost sharing paid for, a value of 
about $3,700 next year.
    According to the Administrator of CMS, beneficiaries 
enrolled in MA plans received a total benefit of a little over 
$1,000 this year; and traditional Medicare does not have to pay 
aging commissions, marketing costs and all these other costs. 
So I wanted to ask you, Dr. Payne, would you agree that 
expanding the Medicare Savings Program is the most equitable 
way to target additional benefits to low-income seniors?
    Ms. Payne. We are certainly glad that Ms. Sassar is 
enjoying the benefits of Medicare Advantage. But the truth is 
that she does not get the kind of benefits that one would get 
under the Medicare Savings Program and under the Low-Income 
Subsidy Program in terms of additional assistance for paying 
her premiums. We think that all of the participants should have 
an option, and Medicare Advantage may be good for some people, 
but it certainly doesn't provide the kind of advantages that 
one would get under the Medicare Savings Program and the Low-
Income Subsidy.
    In addition to that, we are strongly supportive, of course, 
of eliminating the asset test, of streamlining the process, of 
having greater continuity between the two programs and, we 
think, any opportunity to align those programs so that we can 
have greater choices but at the same time have greater 
continuity with improved efficiency.
    Mr. Pallone. Well, thank you.
    And, Ms. Sanchez, Dr. Payne talked about the inefficiencies 
and inequalities of overpaying Medicare Advantage plans. Could 
you comment on that but also talk about Ms. Lopez's story and 
her interaction with the Medicare Advantage plan?
    In addition, can you tell us more generally about your 
clients' experiences with Medicare Advantage marketing abuses, 
the higher co-pays, dual sometimes pay under Medicare Advantage 
or what are some other consumer problems you have seen seniors 
and people with disabilities having to endure under the 
Medicare Advantage Program?
    Ms. Sanchez. Certainly. We do, like Ms. Sassar, have people 
who are happy in their HMO, and we even sometimes help people 
enroll in an HMO when it seems to suit their needs. The problem 
we see a lot is that, unlike Medicare, it doesn't ensure their 
care over the long term. It is not something that is always 
there for them.
    The benefits change year to year, and people don't know how 
to read those notice of change. They don't know what is going 
to happen the next year or the plan drops out.
    We had one client that has been in five HMOs that have 
dropped him over the years, and he says ``no more'' because of 
the problems with the continuity of care. The doctor can drop 
out of the plan; the plan can stop the contracts with 
providers.
    We had a call from someone in Miami whose mother has 
cancer, and was getting care at a hospital. Mid-year, the plan 
dropped that hospital from the contract, and she couldn't 
change anymore. She couldn't change to another plan that would 
cover that hospital.
    So the continuty of care problems are enormous; and, also, 
you need in some ways to help people even try to figure out 
what plan would be good for them. You need a crystal ball, 
because you don't know what disease is going to come down the 
line, what care you are going to need in a few months or 
towards the end of the year, and, unlike with Medicare and MSP 
or Medicare or Medigap, that will cover you no matter what you 
need, you really have to make sure you have picked the benefits 
that you are going to need in this plan, and you are locked for 
in a year.
    We have seen a tremendous amount of marketing abuses. Like 
Ms. Lopez, she was convinced that this plan would offer her all 
these extra benefits that were actually covered by Medicaid, 
and we hear that a lot when we hear presentation from marketing 
people, that we will cover transportation, but Medicaid covers 
transportation. A lot of these benefits in the end don't outdo 
the out-of-pocket costs, and they end up having to pay for 
their regular care and the chronic care that they need like the 
doctor visit co-pays and very high hospital co-pays.
    Mr. Pallone. All right. Thank you very much.
    The gentlewoman from California.
    Ms. Solis. Thank you, Mr. Chairman.
    I want to apologize for not being able to hear all the 
testimony, but we did receive your testimony in writing, and I 
do have some questions for Monica. This is for Ms. Sanchez.
    I also want to touch on some of the issues that were raised 
earlier about people or individuals that we represent that may 
not understand translated information to them appropriately and 
how that care can be improved upon; and we are also looking at 
populations that have lower literacy levels in many cases, as I 
mentioned in my opening statement. I would like to get your 
feedback on what kinds of things we can do to help improve that 
and things that you have seen out in the field that might be 
helpful for us.
    Ms. Sanchez. We work very hard to maintain several people 
with different language skills in our organization, but, in the 
end, I think only streamlining the application process and the 
services will help.
    For example, we are in New York, and there is a tremendous 
number of different languages, different cultures, and as much 
as we try to help individuals in explaining these complicated 
programs to them, unless the programs can be simplified, we are 
never going to be able to reach everybody on an individual 
basis to try to explain all this incredibly complicated 
information.
    Ms. Solis. So are you suggesting that perhaps more 
uniformity in those applications or that----
    Ms. Sanchez. Yes. Certainly. Because, right now, the 
criteria for the MSPs varies by State; and they are very 
different from the Extra Help. So people don't even know that 
when they fill out one application or they have been deemed for 
one program that there are other programs available. They are 
not told, generally. And if they went through the process of 
filling out one application or found an advocate that could 
help them with one application, I see no reason why they should 
then have to fill out five other applications for different 
programs. Streamlining all the assistance programs would help 
tremendously in helping people get the programs they need.
    Ms. Solis. One of the issues I constantly come across is 
data collection and being able to really assess where these 
populations are that are hard to get, and anyone on the panel 
can speak to that. I would appreciate information that you 
might have of how we might do a better job doing that.
    Ms. Payne?
    Ms. Payne. Well, we already know the Social Security 
Administration has already used income data to work on the 
premiums for Part B. So, clearly, we could authorize the Social 
Security Administration to use that same data to reach those 
eligible for the MSP programs as well as the Low-Income 
Subsidy. I mean, they are already doing some of that for the 
Medicare Savings Program, so it seems to me that we ought to 
give them the authorization to extend that to the Low-Income 
Subsidy. That is what the Prescription Drug Coverage Act would 
do, and that is why we are supporting it.
    I do think it is also important to go back to your first 
question to identify some of the activities that AARP is 
involved in. We have made a tremendous effort at getting 
involved with the Latino community. We just had a major 
conference with I think close to about 16,000, 17,000 people in 
Puerto Rico. We do publish a magazine in the language of the 
community, and we have held town hall meetings all across the 
country. We issue briefs for the States to follow in terms of 
information. We have also published a number of papers and 
magazines. We have inserts and magazines in all of the 
languages that we are serving. So we think that it is very 
important that we meet those communities where they are in 
terms of their language skills.
    Ms. Solis. I have one last question. This is directed to 
Dr. Payne. It kind of falls along the same lines that our 
chairman was asking.
    There has been some controversy regarding Medicare 
Advantage overpayments. While some low-income beneficiaries in 
the private insurance plans may be happy with the care they are 
receiving, overpayments to private insurance plans and Medicare 
are reducing the trust fund's solvency and are raising premiums 
for all beneficiaries. 35.5 million Medicare beneficiaries who 
are not in private plans pay more premiums for the 8 million 
who are in those plans. Some plans limit the providers that 
beneficiaries can see relative to regular Medicare. Would you 
say that using MSP or the LIS would more equitably, efficiently 
and effectively help low-income beneficiaries with their 
Medicare cost sharing?
    Ms. Payne. I think I sort of alluded to that in response to 
the chairman's questions. We think there ought to be a level 
playing field between both of those programs--between all of 
the programs, rather. We recognize, as I indicated earlier, 
that those in the MSP programs and LIS will get greater help in 
paying their premiums. Those in the Medicare Advantage will not 
have that same opportunity. So we think that it just makes 
common sense to do that.
    Ms. Solis. Thank you.
    Mr. Pallone. Thank you.
    The ranking member, the gentleman from Georgia.
    Mr. Deal. Thank you, Mr. Chairman.
    Dr. Payne, let me ask you a couple questions. What is the 
position of AARP on means testing for Medicare Part B premiums?
    Ms. Payne. We don't think there should be any means testing 
on Medicare Part D. Those individuals have already paid their 
dues in the years of working, and I don't think the means test 
would facilitate the efficiency of the program, and we see no 
reason to have it included in that determination.
    Mr. Deal. So you would be opposed to the Medicare Part B 
premiums that are currently means tested then?
    Ms. Payne. We would be opposed to any means testing.
    Mr. Deal. So, regardless of whether somebody has a million 
dollars in savings, their treatment under Medicare should be 
the same?
    Ms. Payne. Well, if you look at all of the confusion that 
is going on right now--as a matter of fact, I was at the Social 
Security Administration myself just a couple of days ago 
because they are taking much too much money out for Part B. I 
understand that there are about 300,000 people out there who 
have been affected by this. So we think that we really ought to 
be concentrating on making the program much more efficient than 
having means testing and asset tests included in the 
determination process.
    Mr. Deal. OK. Well, it is one thing to maybe means test or 
not means test based on Part D on the upper income people. But 
here we, of course, are addressing the ones----
    Ms. Payne. I am sorry. I thought you said Part B.
    Mr. Deal. No, I said B. That was my question. You answered 
my question.
    Philosophically, I agree with you. Because Medicare was 
never intended to be a welfare program. Start means testing and 
you start making it look a welfare program.
    Ms. Payne. We are concerned that we provide the kind of 
quality services and meet those individuals who need the kind 
of drugs we have available in the market today; and the means 
testing for those who have already paid taxes, for those who 
have already paid into the Medicare Program, I don't see any 
utility in that.
    Mr. Deal. But here on the lower end, it is a little bit 
different issue, even though it is means testing in some of its 
nature for those who are asking for more than what might be 
perceived as a fair share. In other words, they are asking for 
additional assistance. It is not like everybody is paying the 
same premium in Part B at the upper end. Here we are talking 
about somebody getting more than.
    What about the situation where someone may not have, in 
terms of liquid dollars on a monthly basis, a lot of money, but 
they have assets, whether it be large homes--or that would be 
unlikely because if you got a large home you are going to pay a 
lot of property taxes. You are going to have some liquid assets 
that will pay the keeping of that asset.
    But you could have people who would have large retirement 
type accounts or IRA accounts. As I understand the IRA 
provisions, you don't have to have a mandatory draw-down on 
those until age 70. Suppose somebody there between 65 and 70 is 
sitting on a huge amount of IRA money that they are not having 
liquid access to because they are not drawing down on it, they 
are not required to draw any part of it down. Does that seem 
quite fair that the taxpayer supplements them additionally for 
that?
    Ms. Payne. Well, let me answer it this way. We have been 
involved for years in financial literacy. In looking at the 
defined benefits in this country, in looking at the Social 
Security struggles we see today, it seems to me we need to be 
encouraging, in any way possible, people to save for their 
retirement.
    The kind of folks we are talking about in terms of the Low-
Income Subsidy are those individuals that don't have huge 
accounts. They may have a very small nest egg, they may have a 
house, they may have some other assets that can be liquidated, 
but it seems to me we don't want to penalize them by applying 
the means tests or assets tests.
    Mr. Deal. But when you don't do that, you encourage fraud 
and abuse. In other words, if you don't require any proof that 
you meet any kind of asset or income test, it seems to me that 
human nature takes over and people say, oh, well, that is--the 
taxpayers are willing to pay if I apply for this. I think it 
just invites fraud and abuse.
    Now I am sympathetic with those who have done their best to 
preserve their assets. Because there is nothing that makes me 
any madder than the one bumper sticker I saw on a big RV moving 
down the road that said ``I am spending my children's 
inheritance.'' because if you have that attitude about your 
assets then you ultimately are going to be the one who is going 
to ask the taxpayer to pick up. Because you have lived the good 
life. You have spent all of your assets during the time you had 
them.
    So it is a delicate balance, and I think we all recognize 
it is a delicate balance, how to get it all right.
    The one piece of testimony we haven't heard, Mr. Chairman, 
and I assume before we do anything we will have to get it, and 
that is, what is the cost of these proposals? Obviously, some 
of them could have rather significant costs that we would have 
to wrestle with.
    But I appreciate your testimony. I apologize for having to 
be in and out, but some of us have appointments we had to keep 
in our office. But thank you for being here.
    Mr. Pallone. Thank you.
    Mr. Green.
    Mr. Green. Thank you, Mr. Chairman.
    I am going to follow up on the question I just heard. As 
for any of the panelists, as I mentioned in my opening 
statement, we have a community access collaborative in the 
Houston area. It is Gateway to Care, working on outreach and 
enrollment efforts. The organization has come to learn 
firsthand about the burden of the assets test and the barrier 
to enrollment that it creates.
    The executive director of Gateway to Care said it perfectly 
when he said, ``seniors are proud and honest people. They are 
proud of what they manage to accumulate, even if it is very 
little by the standards of an investment banker, for example, 
particularly in our district.''
    We know that two-thirds of the qualified Medicare 
beneficiaries are not getting premium and cost-sharing 
assistance, and nearly one-fourth of low income seniors are not 
getting the benefits.
    Dr. Payne, your testimony mentioned that the assets test is 
the primary reason why 3 million to 5 million beneficiaries 
aren't getting extra help under Part D. What kind of nest egg 
are we talking about? Are most of the seniors or people with 
disabilities disqualified because they have hundreds of 
thousands of dollars in stock annuities or other assets?
    I know in my district we don't have folks who have those 
kind of resources, and yet some of the assets tests still may 
keep them from qualifying. What is the practical implication of 
the asset test? Does it really force beneficiaries to make the 
tough choice between keeping a small reserve for emergencies 
and getting assistance when they need on a day-to-day basis in 
the medical bills?
    If we can talk about that assets test. I share the concern 
made by my friend from Georgia, but I also know from some of 
our experiences, particularly in Texas, it is difficult.
    Ms. Payne. We think that this--the Prescription Coverage 
Act, is really a very modest step toward eliminating the asset 
tests. I mean, we know that we possibly have about 3 million 
people out there that we aren't serving, and the kind of nest 
egg you are talking about are those individuals who would still 
be in a relatively low-income status. So we aren't talking 
about wealthy folks who have stocks and bonds. We are talking 
about folks who are barely over the poverty level or within 
that range, and we need to find a way to serve them. I mean, it 
is the moral thing to do. It is the right thing to do. It is 
the humane thing to do. This is a very modest effort.
    I think it is also important to point out that if in fact 
we want to reach those 3 million people that, as several of the 
panelists have alluded to in their testimony, that we need to 
make this process much more uniform. We need to simplify the 
process. We need to eliminate these eight pages of daunting 
questions that are very invasive, talking about charity, 
talking about whether your family gave you food.
    I think we can do better than that as Americans. It seems 
to me we need to be concentrating on how we can reach those 3 
to 5 million people out there and how we can do a better job at 
making the application less daunting.
    Mr. Green. And I agree. And, in fact, Mr. Chairman, I think 
we keep hearing this in our SCHIP hearings, making the 
application for the children's health care initiative easier 
for parents, just like what it should be for our seniors.
    Ms. Payne. Yes. I helped some people in my neighborhood 
fill out some of those applications, and it is exacerbated by 
the fact that you have at the bottom of the application a 
statement about the penalty in terms of imprisonment. So I 
think that just exacerbates the whole process. So it seems to 
me we can do a better job.
    Mr. Green. Ms. Sanchez do you have a comment?
    Ms. Sanchez. Yes, in terms of the assets test, there are a 
lot of States that have eliminated the assets test, and at 
least one, sometimes all, of the MSPs, and they did it because 
they found that the administrative cost of actually managing, 
looking at the documentation of assets was very high, and, 
second, that any kind of significant assets really led to 
income that would disqualify the person. So anyone who has a 
huge amount of stocks, is going to have income from the stocks, 
they are going to be above the income limits.
    Mr. Green. If they own a Winnebago, and pay the gas bill 
and drive that Winnebago down the road, they are probably not 
going to be eligible.
    Ms. Sanchez. Exactly.
    Mr. Green. Mr. Chairman, I have another question. I will 
just throw it out because we apologize for our vote schedule, 
but under Medicare Part D, program beneficiaries can sign up 
any time of the year without ever paying a premium penalty. 
While CMS has waived the Part D penalty for low-income 
beneficiaries for the remainder of this year, is there any 
reason from your perspective to treat Part D different from 
Part B when it comes to premium penalties for low-income 
enrollees?
    Ms. Sanchez. We are not actually against the premium 
penalty for Part B because we do agree with the premise that 
people should get insurance and not just wait until they are 
sick. But with Part D it is so new, it is so different, and it 
is so complicated, that to start the penalty so immediately we 
think is unfair. It is really forcing people to make an 
uninformed decision quickly just because there is a deadline.
    Mr. Green. Thank you, Mr. Chairman. Thank you.
    Mr. Pallone. I am going to have a second round, if anyone 
wants to participate, second round of questions that is.
    I wanted to ask, Dr. Payne, we know that one of the main 
reasons people aren't enrolled in the existing programs for 
extra help is that they weren't aware that the help was 
available. AARP has millions of members, some of whom are 
surely enrolled in programs that provide extra help with 
medical costs like LIS and MSP. But what has AARP done to 
conduct outreach about these programs with its own members in 
conjunction with other organizations that help Medicare 
beneficiaries with enrollment? Obviously I am asking this as a 
prelude to what we might do to help out.
    Ms. Payne. Well, Mr. Chairman, as I indicated earlier, we 
have had a number of town hall meetings all over the country. 
As you know, we are in Puerto Rico. We are in all 50 States 
with considerable staff members. We have conducted training of 
our staff and training of our volunteers.
    We are continuing to produce publications for the Hispanic 
community and publications for low-income communities, 
targeting those communities that need this the most, especially 
in rural areas and economically distressed communities.
    We have done the same kind of outreach that we did for 
other initiatives we have been involved in. This is one of our 
highest priorities. In those town meetings we have devoted most 
of our attention to enrolling low-income individuals, and with 
more than practically approximately 77 million more baby 
boomers coming on, I can assure you we will be doing even more 
in the future.
    Mr. Pallone. Do you have any recommendation that the States 
or the Social Security Administration or CMS could undertake to 
reach those who are eligible but not enrolled?
    Ms. Payne. Well, again, it seems to me that the Social 
Security Administration could do the same thing for the low-
income subsidy that they are doing for other programs, and that 
is using some of the income data to do greater outreach, and 
for us to give them the authority to do that through the 
Prescription Coverage Now Act.
    Mr. Pallone. OK, thank you.
    I wanted to ask Ms. Clarkson, I would like to better 
understand what you are telling us about the challenges that 
people in the assisted living facilities face with respect to 
their medication copayments.
    Right now a person who is in an assisted living facility is 
not eligible to get financial assistance with the Medicare Part 
D copayments; is that correct?
    Ms. Clarkson. That is correct.
    Mr. Pallone. Now, is there any solid basis for 
discriminating against these low-income beneficiaries in 
assisted living? Can you say a little about the beneficiaries 
in those facilities? Are they wealthier than people in nursing 
homes? Do they have additional means that they can use to pay 
for their copayments?
    Ms. Clarkson. No, not the clients we are talking about. 
They are essentially the same person that would be in a nursing 
home being taken care of in a different venue. They are an 
elderly person needing assistance, who is also low income.
    Mr. Pallone. OK. And I just wanted to ask Ms. Sanchez, I 
know we kind of beat this to death, but I have a minute left 
here. Do you ever come across somebody who meets the income 
test, but you know then has a huge amount of assets? Is that a 
phenomenon that exists at all?
    Ms. Sanchez. We have never seen it in any of the people we 
have tried to help, and if they are over, it is by a couple 
hundred or a couple thousand dollars. And they have saved. They 
have scrimped and saved their whole lives, and they don't want 
to give up that little bit of security.
    Mr. Pallone. And that is essentially what we have for the 
most part.
    All right, thank you all.
    Mr. Deal.
    Mr. Deal. In that regard that is the problem with setting 
any kind of artificial limits is that I am either going to be 
$5 under, or you are going to be $10 over. Now, as I understand 
it, it does not have an inflation enhancer to it, does it? Or 
does it?
    Ms. Sanchez. The LIS does, but the MSP doesn't.
    Mr. Deal. OK. All right. Maybe that is a better way of 
dealing with it, because that is always a moving target and as 
long as we have any limit, somebody is going to be just 
slightly over it and therefore ineligible, so those are always 
hard decisions.
    I was just looking at the statistics on the low-income 
subsidy as it relates to the Part D premiums and looking at 
some CNS figures, and it said that, as of the date of this 
report, there were 13.2 million people eligible for low-income 
subsidy. And at that point in time, there had been roughly 10 
million who had coverage under either Part D or some other 
source, leaving the 3.2 million others.
    And 3.2 million out of 13 million is a pretty high number 
of presumed eligible people who are just not enrolled. It would 
seem to me that that is sort of where we ought to focus our 
efforts and figure out--and you all have alluded to some of the 
impediments that maybe contribute to them not enrolling even 
though they would be eligible. That ought to be our priority.
    It is sort of similar, Mr. Chairman, to my point on our 
SCHIP reauthorization is that since that program has as its 
target children 200 percent of poverty or below, we ought to 
have a pretty good saturation of that population before we 
start expanding it. And I feel the same way about this; we 
ought to figure out why the ones that we think are eligible and 
are not there, and the reasons you have given, paperwork, maybe 
not wanting to disclose assets, all of those other things, a 
lot of that has to do with just education and outreach. I am 
sympathetic to that.
    And hopefully in whatever we do, we can focus on the ones 
we have already identified ought to be our primary targets and 
try to get more of them covered before we take on more 
expansive and more expensive other undertakings, because if we 
do, we are going to forget the ones that were the original 
intended target populations to begin with.
    So thank you all for what you contributed here today.
    Mr. Pallone. Thank you. That concludes our questions, but I 
just wanted to thank you all. I think that this is a really 
important issue that really hasn't received much attention, 
and, of course, mainly it effects people that have lower 
incomes. And I think a lot of times their concerns are not 
heard very often.
    So I do appreciate your being here, and we want to take 
very seriously what you have said to see what kind of action we 
need to take. So thank you again.
    I just remind you that you might get additional questions 
for the record from Members. They are supposed to submit them 
within 10 days, so then we might ask you to respond to those, 
you would be notified within 10 days if you get those kinds of 
questions.
     But thank you again, and without objection, the meeting of 
the subcommittee is adjourned.
    [Whereupon, at 4:25 p.m., the subcommittee was adjourned.]