This week, Representatives Brad Schneider (D-IL-10) and Robin Kelly (D-IL-02) introduced a House companion to the Medicare Extra Rx HELP Act (S. 691/H.R. 4583). Championed in the Senate by Bob Casey (D-PA), this bill would make improvements to the Medicare Part D Low-Income Subsidy (LIS), commonly known as Extra Help, to better reflect current needs.
Created almost 15 years ago, Extra Help is a federal program that helps people with Medicare who have low incomes and limited assets afford their Medicare prescription drug coverage (Part D). In 2018, more than 12 million older adults and people with disabilities were enrolled in the program, saving an average of $4,900 a year.
Currently, far too many people who need this critical assistance cannot access it. They may be unable to overcome the complex, bureaucratic application process; fail to meet the program’s outdated eligibility thresholds; or both. Those left behind may be forced to choose between paying for needed prescriptions and other basic necessities.
Based on our 30 years’ experience assisting people with Medicare and their families, we know that health care and prescription drug affordability is an ongoing challenge. Every day on our National Consume Helpline we hear from older adults and people with disabilities who are struggling to cover these costs. Since many beneficiaries live on fixed or limited incomes that cannot keep pace with high and rising drug prices, the pervasive nature of this problem is alarming, but not surprising.
Half of all Medicare beneficiaries—nearly 30 million older adults and people with disabilities—live on $26,200 or less per year, while one quarter have incomes below $15,250 and less than $14,550 in savings. At the same time, health care costs are taking up a larger and more disproportionate share of beneficiaries’ limited budgets. In 2016, nearly 30% of Medicare households spent 20% or more of their income on health care, while only 6% of non-Medicare households did so. Out-of-pocket costs for prescription drugs represent a significant share of this spending, accounting for nearly one out of every five beneficiary health care dollars.
The consequences of health care and prescription drug unaffordability are significant, both for the Medicare program and those who rely on it. Beneficiaries who cannot pay for their medications or coverage may be forced to go without care—leading to worse health outcomes and quality of life, hospitalizations, or even death. And the cost to the Medicare program is also extreme, as beneficiaries who forgo needed care and experience declining health as a result may need more costly interventions later, like emergency department or inpatient care.
The Medicare Extra Rx HELP Act would address these challenges by easing access to Extra Help—ensuring more older adults and people with disabilities can obtain needed care. The bill would:
Eliminate the asset test and streamline program administration. Only Part D enrollees who meet an exceptionally low asset threshold ($7,730 for an individual for full benefits) are currently eligible for assistance with their Part D premiums and cost sharing. The verification of asset information is burdensome to administer and presents a significant barrier to program enrollment. The Medicare Extra Rx HELP Act would do away with the asset test under Extra Help.
Provide full Extra Help benefits to those living on the edge of poverty. Only the lowest income people with Medicare receive full benefits through Extra Help, including $0 premiums and deductibles as well as fixed copayments. Individuals with incomes between 135% and 150% of poverty (about $16,860 to $18,735 in 2019) who also meet the program’s asset test are nevertheless exposed to Part D premiums, deductibles and high coinsurance rates. The Medicare Extra Rx HELP Act would extend full Extra Help benefits to Medicare-eligible seniors and people with disabilities living below $24,980 per year (200% FPL for an individual).
Medicare Rights strongly supports this legislation. We recently urged lawmakers in the House and Senate to include the Medicare Extra Rx HELP Act in any forthcoming drug pricing legislation. Previously, we recommended the bill’s solutions in comments responding to draft legislation from the House Committees on Ways and Means and Energy and Commerce. We will continue to support the adoption of these reforms and urge all Members of Congress to do the same.