Medicare Weekly News #13 for December 5, 2005
Extra Help with Medicare Prescription Drug Benefit Available for those with Modest Incomes
Note: Medicare Weekly News (MWN) is a weekly series for newsmakers nationwide brought to you by the Medicare Rx Education Network.
MWN provides important information about a timely topic on the Medicare prescription drug benefit;
it will be distributed to newsrooms each Monday. For questions about the Network, please contact
Brian Franklin at 202-312-1098.
Medicare is offering extra help with paying for its new prescription drug coverage to beneficiaries who
might not consider themselves eligible for extra assistance. For beneficiaries with modest incomes — annual
incomes as high as $14,355 and assets of less than $10,000, excluding a home or car — Medicare will cover
some 85 percent of their drug costs, discount the monthly premium (on a sliding scale), reduce the annual
deductible, and eliminate the coverage gap.
The Centers for Medicare & Medicaid Services (CMS) estimates that there are 2.4 million beneficiaries nationwide
who are at the upper income limit for extra help who may be eligible.
To qualify, beneficiaries must meet the following criteria:
Annual income of no more than $14,355 for an individual in 2005 ($19,245 for a couple). That works out to a
monthly income of some $1,197 for an individual ($1,604 for a couple).
Assets less than $10,000 for an individual ($20,000 for a couple). According to CMS, assets are generally
defined as resources that can be converted to cash within 20 days, such as stocks, bonds, and
checking, savings and retirement accounts. A principal home, car, and burial space do not count
toward the asset limit. Also excluded are $1,500 for funeral or burial expenses, life insurance
policies with a face value of up to $1,500, and items such as wedding rings and family
The majority (54 percent) of Medicare beneficiaries have limited assets, with more than half with
countable assets of $20,000 or less (in 2002). Many Medicare beneficiaries also have modest incomes.
For example, for 80 percent of the elderly, Social Security comprises at least half of their annual
For those who qualify, Medicare helps by:
Limiting the deductible to no more than $50 (compare to Medicare’s “standard” plan
deductible of $250).
Helping (on a sliding scale, depending on income) with the cost of the monthly premium.
(The national average monthly premium in 2005 is $32.20.)
Limiting co-payments (per prescription) to 15 percent
Eliminating the coverage gap.
In other words, in addition to the monthly premiums (which are discounted on a sliding scale) and after
the discounted annual deductible of $50, the beneficiary pays 15 percent and the plan pays 85 percent of
the cost of the beneficiary’s prescription drugs. That continues until the beneficiary qualifies for
catastrophic coverage. At that point, the beneficiary only makes co-payments of $2/generic and $5/brand
name per prescription.
When applying for this extra assistance, the beneficiary will be asked for information about his/her
income and resources and will be asked to sign a statement that the answers are true. Social Security
checks the information from computer records at the Internal Revenue Service and other sources. The
applicant may be contacted if more information is needed.
People who think they might qualify should visit the Social Security Web site at
or call 1-800-772-1213 and
ask for an application. Beneficiaries can apply:
via the Social Security Web site.
at the local Social Security office (SSA will also take applications by phone).
through their state Medicaid office, or
through their state’s health insurance assistance program (SHIP).
This summer, the Social Security Administration mailed applications to potentially eligible
individuals. You can also find the forms and additional information on the SSA Web site at
, or simply call the SSA to
request the form.
Once a beneficiary qualifies for this extra help, he/she needs to enroll in a Medicare
low income-subsidy prescription drug plan.
Enrollment in the Medicare prescription drug benefit is voluntary. Open enrollment began
November 15, and continues through May 15, 2006.
The Medicare Rx Education Network provides information and assistance with outreach and enrollment for the new
Medicare Part D prescription drug benefit. The network, which includes 70 national organizations, is chaired by former
U.S. Senator John Breaux. Members share an interest in educating Medicare beneficiaries about the new Medicare
prescription drug benefit and work closely with the appropriate federal agencies to obtain up-to-date information to
ensure that information disseminated by the network about Medicare Part D is factual and accurately conveyed,
thereby pre-empting confusion about the benefit and equipping beneficiaries and their caregivers to make informed
choices. By sharing information with each other about member organizations’ independent efforts, collaborating on
activities, and identifying ways to work together, the network aims to eliminate duplication of efforts and maximize the
effectiveness of outreach efforts. The network does not engage in legislative activities or take positions on pending
legislative or administrative policies related to the Part D benefit and its implementation.