Only 8% of Eligible Seniors Approved for Medicare Drug Program

WASHINGTON -- Despite a massive outreach campaign, only 661,000 of an estimated 4.6 million low-income seniors have been approved for financial assistance under the new Medicare prescription benefit, the Social Security Administration said today.

That represents just 14% of the number of beneficiaries that the government had estimated would be approved for extra help, worth $4,000 a year on average. The pool of those potentially eligible is even larger, an estimated 8 million.

The disappointing figures are another indication that seniors are ambivalent about the new program, which will offer outpatient prescription coverage through private plans starting Jan. 1. A recent poll by the Kaiser Family Foundation found that only 50% of low-income seniors realized they could be eligible for assistance.

"It suggests this program is far too complicated and confusing, when you can't even give it away," said Robert Laszewski, a healthcare industry consultant. "It's terrible that people who have a right to assistance with their drug coverage and they don't know about it, even after months of extraordinary publicity."

California has more Medicare beneficiaries than any other state, but only about 30,000 Californians have been approved for the aid. Greater numbers of beneficiaries have qualified in other large states, including New York, Texas, Florida and Pennsylvania, according to Social Security figures.

The extra help is available to individual seniors making less than $14,355 a year and married couples with incomes below $19,245. To qualify, individuals can have no more than $10,000 in assets and couples are limited to $20,000. Although seniors must enroll in a drug plan by May 15 or face higher premiums, there is no deadline to apply for financial assistance.

The nonprofit National Council on the Aging, which is helping to sign up seniors for the prescription benefit and the subsidies, said the figures were a letdown, but not totally unexpected.

"We knew it was going to be a long, hard road to find and enroll the people who are eligible for the extra help," said James Firman, president of the group, which is part of a coalition of dozens of service organizations trying to help. "We will be sitting down with Social Security next week to talk about how the private sector can work more closely with the government to improve on the results."

Social Security spokesman Mark Lassiter said that starting in May, the agency sent out 19 million applications to seniors it determined might be eligible. It followed up with calls to 9 million households and letters to another 5 million. Under the law that created the Medicare drug benefit, Social Security is charged with administering the subsidies for low-income seniors.

"This is a difficult population to reach," said Lassiter. "That's why we are going to continue working hard.... We're determined."

The agency said it has gotten nearly 3.8 million applications, of which 2.8 million have been processed.

Of those, 2.4 million were potentially eligible for extra help. However, Lassiter said that only 28% -- or 661,162 -- ultimately met both the income and assets limitations. Most of those who did not qualify -- about 60% -- had too much in assets.

Some seniors may be putting off seeking financial assistance because the prescription drug coverage is not yet available.

"Part of the problem is that they are trying to pitch something to seniors before they need it," said David Lipschutz, a staff attorney with California Health Advocates, which represents beneficiaries. "They are kind of putting the cart before the horse. To the extent that people don't know what [the drug benefit] is, they are not going to want to bother with this extra help."

The poorest and sickest seniors, including most nursing home residents, will not have to apply for extra help. An estimated 6 million seniors and disabled people who already have Medicaid will be automatically enrolled in the prescription drug benefit. They will face no monthly premiums or annual deductibles and only modest co-payments.