Less than 18 percent of low-income seniors
approved for new Medicare Drug subsidies

Only 1 Million of Approximately 5.7 to 6.6 Million Low-Income Seniors Have Been Approved for New Benefit That Began on January 1

Washington, D.C. – The new Medicare prescription drug program, which began on January 1 of this year, is leaving at least 4.7 million low-income seniors without the benefits they are entitled to. According to the Social Security Administration, only 1 million low-income seniors out of a pool of 5.7 to 6.6 million have been approved to receive low-income drug subsidies.

Now that the benefit has begun, this is no longer a question of what could happen but a question of what is happening to millions of low-income seniors who aren’t getting the help they need. Without such subsidies, purchasing needed medicines is simply unaffordable for those low-income seniors.

“It is truly disappointing to see such a large number of low-income seniors not get the benefits to which they are entitled,” said Ron Pollack, Executive Director of Families USA. “These are people who need help the most and are not getting it. 

“When the new Medicare legislation was enacted, the White House and congressional leaders touted its benefits for low-income seniors. Unfortunately, the vast majority of those seniors have been left behind without the help that they need.”

During the past few months, very little attention has been given to the complexity of the special drug coverage and subsidies intended for low-income seniors. Three categories of low-income seniors were established under the new Medicare legislation, and each group receives different benefits and is enrolled through separate processes:

1. Non-Medicaid Low-Income Beneficiaries: Between 5.7 and 6.6 million low-income seniors and people with disabilities who receive no Medicaid benefits were projected by the Congressional Budget Office to be eligible for special drug subsidies under the new Medicare legislation. To qualify, they need to have incomes below 150 percent of the federal poverty level ($14,355 in annual income for a senior living alone, $19,245 for couples), and they must proactively apply for this benefit. The actual amount of the drug subsidies provided to these beneficiaries varies based on their income and assets.

2. The So-Called “Dual Eligibles”: This is a group of approximately 6.4 million low-income Medicare beneficiaries who currently participate both in Medicare and Medicaid. This group has been receiving drug coverage through the Medicaid program, but Medicaid stopped providing such coverage on December 31. Since this group is readily identifiable, any dual eligible person who did not voluntarily enroll in a private Medicare drug plan by January 1 was automatically enrolled by the government in a plan and will receive the low-income subsidy. It is very likely, however, that a significant portion of those automatic enrollees were placed in a private plan that does not cover their medicines— thereby making them worse off than they were before the new Medicare drug program began.

3. “Medicare Savings Program” Participants: Between 1.1 and 2 million beneficiaries have slightly higher incomes than dual eligibles and receive Medicaid subsidies to pay for their Medicare premiums and cost-sharing. Since these low-income people are also readily identifiable, those who do not voluntarily enroll in the program will be automatically enrolled by May 15 in a plan and will receive low-income subsidies.

“The complexity of the Part D benefit has almost certainly discouraged potentially eligible low-income beneficiaries from applying,” said Pollack. “Low-income seniors not only have to navigate through the maze of their Part D options, but they also have the added burden of having to apply to a separate government agency for the subsidy.”