[Federal Register Volume 77, Number 11 (Wednesday, January 18, 2012)]
[Rules and Regulations]
[Pages 2446-2448]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-827]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Part 418

[Docket No. SSA-2010-0033]
RIN 0960-AH24


Amendments to Regulations Regarding Eligibility for a Medicare 
Prescription Drug Subsidy

AGENCY: Social Security Administration.

ACTION: Final rule.

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SUMMARY: This final rule adopts, without change, the interim final rule 
with request for comments we published in the Federal Register on 
December 29, 2010. The interim final rule incorporated changes to the 
Medicare prescription drug coverage low-income subsidy (Extra Help) 
program made by the Patient Protection and Affordable Care Act 
(Affordable Care Act) enacted in March 2010. Under our interpretation 
of section 3304 of the Affordable Care Act, if the death of a 
beneficiary's spouse would decrease or eliminate the subsidy provided 
by the Extra Help program, we will extend the effective period of 
eligibility for the most recent determination or redetermination until 
one year after the month following the month we are notified of the 
death of the spouse. The effective date of this provision was January 
1, 2011. We also revised our regulations to incorporate changes made by 
the Medicare Improvements for Patients and Providers Act of 2008 
(MIPPA) which affect the way we account for income and resources when 
determining eligibility for the Extra Help program. The statute 
provides that we no longer count the value of any life insurance policy 
as a resource for Extra Help effective on and after January 1, 2010. As 
of that date, we also no longer count as income the help a beneficiary 
receives when someone else provides food and shelter, or pays household 
bills for food, mortgage, rent, electricity, water, property taxes, or 
heating fuel or gas. These revisions updated our rules to reflect these 
statutory changes.

DATES: The interim final rule with request for comments published on 
December 29, 2010, is confirmed as final effective January 18, 2012.

FOR FURTHER INFORMATION CONTACT: Craig Streett, Office of Income 
Security Programs, Social Security Administration, 2-R-24 Operations 
Building, 6401 Security Boulevard, Baltimore, MD 21235-6401, (410) 965-
9793. For information on eligibility or filing for benefits, call our 
national toll-free number, 1-(800) 772-1213 or TTY 1-(800) 325-0778, or 
visit our Internet site, Social Security Online, at http://www.socialsecurity.gov.

SUPPLEMENTARY INFORMATION:

Background

    This final rule adopts, without change, the interim final rule with 
request for comments we published in the Federal Register on December 
29, 2010, at 75 FR 81843. The interim final rule changed the way we 
account for income and resources when determining eligibility for the 
subsidy provided by the Extra Help program, and removed certain items 
from those we will count as income and resources. In addition, the 
interim final rule extended the effective date of a determination or 
redetermination of an Extra Help subsidy when there is a death of a 
spouse.
    Medicare prescription drug coverage is a voluntary program that 
covers various prescription drugs. The regulations and requirements for 
the program are codified in 42 CFR part 423. The Centers for Medicare & 
Medicaid Services (CMS) promulgates rules and regulations concerning 
the Medicare program. Anyone who meets the requirements listed in 42 
CFR 423.30(a) can enroll in Medicare prescription drug coverage. 
Medicare prescription drug coverage beneficiaries are generally 
responsible for deductibles, cost-sharing, and monthly

[[Page 2447]]

premiums towards the cost of covered prescriptions.
    Beneficiaries with Medicare prescription drug coverage who have 
limited income and resources may qualify for Extra Help with their 
monthly premiums, deductibles, and cost-sharing for Medicare 
prescription drug coverage. To qualify for Extra Help, a Medicare 
beneficiary must reside in one of the fifty states or the District of 
Columbia and must have resources and income within specific limits.
    Congress enacted MIPPA in July of 2008.\1\ Section 116 of MIPPA 
exempts certain items from income and resources determinations of Extra 
Help eligibility on or after January 1, 2010. We apply these exemptions 
to applications filed and redeterminations initiated on or after 
January 1, 2010. The items exempted under section 116 are the value of 
life insurance and in-kind support and maintenance.
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    \1\ Medicare Improvements for Patients and Providers Act of 
2008, Public Law 110-275, 122 Stat. 2494 (2008).
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    To implement these requirements of MIPPA, we issued guidance in 
August 2009 and discontinued counting these exempted items for 
applications and redeterminations in accordance with the requirements 
of the statute. Accordingly, we no longer count as income the help a 
beneficiary receives when someone else provides food and shelter, or 
pays for food, mortgage, rent, heating fuel, gas, electricity, water, 
or property taxes. To reflect these statutory exemptions, we revised 
sections 418.3335(b) and 418.3350 and deleted section 418.3345 of our 
regulations in the interim final rule that we published in December 
2010.
    In March 2010, Congress passed the Affordable Care Act, which 
extends the effective date of a determination or redetermination of an 
Extra Help subsidy due to the death of a spouse.\2\ In our previous 
rules, any adjustment in the amount of Extra Help the beneficiary 
receives was effective the month after the month in which we are 
notified of the death of a spouse. In some cases, the death of a spouse 
would result in a decrease in the amount of Extra Help or loss of Extra 
Help eligibility for the beneficiary.
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    \2\ The Patient Protection and Affordable Care Act, Public Law 
111-148 Sec.  3304.
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    Effective January 1, 2011, if the death of the spouse would 
decrease or eliminate the subsidy provided by the Extra Help program, 
we extend the effective period for a determination or redetermination 
until one year after the date on which it would otherwise cease to be 
effective--that is, the month after the month we are notified of the 
death of the spouse. In order to reflect the changes made by the 
Affordable Care Act, we revised sections 418.3120 and 418.3123 of our 
regulations.
    Prior to the publication of our interim rule, our regulations at 
418.3350(b) stated that we did not count as income the unearned income 
described in sections 416.1124(b), (c)(1) through (c)(12), and (c)(14) 
through (c)(21). Those rules omitted a reference to paragraph 
416.1124(c)(22) that we added after the publication of section 418.3350 
in December 2005. We updated the reference in section 418.3350 to 
correct this omission. This was a technical change only and did not 
affect the substance of our rules.

Public Comments

    On December 29, 2010, we published an interim final rule with 
request for comments in the Federal Register at 75 FR 81843 and 
provided a sixty-day comment period. We received five comments. We 
carefully considered the concerns expressed in these comments but did 
not make any changes to the final rule.
    We summarized the commenters' views and responded to the 
significant issues raised that are within the scope of the interim 
final rule.
    Comment: A commenter expressed gratitude for the cessation of 
counting as income the help low-income subsidy recipients receive when 
someone else pays household bills.
    Response: We appreciate the comment and value the public's input on 
regulatory changes. Changes in the Medicare Improvements for Patients 
and Providers Act of 2008 have made it easier for people to qualify for 
Extra Help with their Medicare prescription drug plan costs.
    Comment: An organization expressed support for our efforts to 
expand eligibility for low-income subsidy and would like the expansion 
efforts to go further. The organization believes it would be 
appropriate to eliminate the asset test (resource limits) for Extra 
Help with Medicare prescription drug plan costs. The organization 
stated that the Extra Help asset test is highly restrictive, preventing 
millions of low-income Part D enrollees from benefiting from Extra 
Help, and unnecessarily complicates the application process, 
potentially discouraging qualified enrollees from applying to the 
program. The organization also stated that an asset test is 
inappropriate for Medicare beneficiaries, as Americans should be 
encouraged to save for retirement.
    Response: We cannot adopt this comment because the resources 
eligibility standards for the Extra Help program are statutory. 
Elimination or adjustment to statutory requirements is beyond the scope 
of these regulations.
    Comment: An organization expressed concern about contacting the 
surviving spouse of a low-income subsidy eligible couple when we 
determine that we will defer the redetermination for one year. The 
organization believes this correspondence may cause unnecessary anxiety 
to the widow/widower.
    Response: We are unable to adopt this suggestion. The death of a 
spouse is a subsidy-changing event (SCE). We send a redetermination 
form whenever an SCE report is received as required in 20 CFR 
418.3120(b)(1). We use the information to determine if the event will 
affect the Extra Help subsidy. In some cases, contact with the widow/
widower will result in an increase in the Extra Help subsidy. If the 
subsidy decreases, we will extend the effective period of the 
determination or redetermination for at least one year from the 
spouse's death.
    Comment: An organization believes that we should provide a more 
comprehensive definition of ``in-kind support and maintenance'' in 20 
CFR 418.3335, either by providing examples or referencing the 
appropriate link.
    Response: We cannot adopt this comment at this time because it is 
not within the scope of the present regulatory change, which is based 
on statutory changes. However, we agree that a more comprehensive 
definition of ``in-kind support and maintenance'' may be appropriate in 
20 CFR 418.3335(b). We will consider publishing a separate Notice of 
Proposed Rulemaking to add a sentence to the end of Sec.  418.3335(b) 
explaining that ''Shelter includes room, rent, mortgage payments, real 
property taxes, heating fuel, gas, electricity, water, sewerage, and 
garbage collection services.''
    Comment: An organization asked us to consider clarifying that life 
insurance refers to the cash surrender value of the life insurance that 
is under 20 CFR 418.3425.
    Response: We are unable to adopt this suggestion because the 
statutory exclusion is not limited to the cash surrender value of life 
insurance. ``No part of the value of any life insurance policy shall be 
taken into account'' in determining the resources of an individual and 
the eligible spouse of the individual.\3\
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    \3\ Medicare Improvements for Patients and Providers Act of 
2008, Public Law 110-275, 122 Stat. 2494 (2008).

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[[Page 2448]]

    Accordingly, the interim final rule remains unchanged and we are 
adopting it as final.

Regulatory Procedures

Executive Order 12866 as Supplemented by Executive Order 13563

    We consulted with the Office of Management and Budget (OMB) and 
determined that this final rule meets the criteria for a significant 
regulatory action under Executive Order 12866 as supplemented by 
Executive Order 13563. Thus, OMB reviewed the final rule.

Regulatory Flexibility Act

    We certify that these final rules will not have a significant 
economic impact on a substantial number of small entities, because they 
affect individuals only. Therefore, a regulatory flexibility analysis 
is not required under the Regulatory Flexibility Act, as amended.

Paperwork Reduction Act

    These rules do not create any new or affect any existing 
collections and, therefore, do not require Office of Management and 
Budget approval under the Paperwork Reduction Act.

(Catalog of Federal Domestic Assistance Program Nos. 93.770, 
Medicare Prescription Drug Coverage; 96.002 Social Security--
Retirement Insurance.)

List of Subjects in 20 CFR Part 418

    Administrative practice and procedure, Aged, Blind, Disability 
benefits, Public assistance programs, Reporting and recordkeeping 
requirements, Supplemental Security Income (SSI), Medicare subsidies.

Michael J. Astrue,
Commissioner of Social Security.

    Accordingly, the interim rule amending 20 CFR chapter III, part 
418, subpart D that was published at 75 FR 81843 on December 29, 2010, 
is adopted as a final rule without change.

[FR Doc. 2012-827 Filed 1-17-12; 8:45 am]
BILLING CODE 4191-02-P