June 21, 2019
Nancy Potok
Chief Statistician
Office of Management and Budget
9257 New Executive Office Building
725 17th St. NW, Washington, DC 20006
Submitted via www.regulations.gov
Re: Directive No. 14 Consumer Inflation Measures Produced by Federal Statistical Agencies (OMB–2019–0002)
Dear Dr. Potok:
The Center for Medicare Advocacy (Center) is pleased to provide comments to the Office of Management and Budget’s (OMB) Request for Comment on the Consumer Inflation Measures Produced by Federal Statistical Agencies and their potential use in the annual adjustment of income measures such as the Official Poverty Measure (OPM). The Center, founded in 1986, is a national, non-partisan education and advocacy organization that works to ensure fair access to Medicare and to quality healthcare. At the Center, we educate older people and people with disabilities to help secure fair access to necessary health care services. We draw upon our direct experience with thousands of individuals to educate policy makers about how their decisions affect the lives of real people. Additionally, we provide legal representation to ensure that people receive the health care benefits to which they are legally entitled, and to the quality health care they need.
The Center opposes the use of any slower and more inaccurate inflation measure for the annual adjustments of the Official Poverty Measure (OPM) used by public benefit programs. The proposal to lower the poverty line by applying a smaller cost-of-living adjustment each year, using either the chained CPI or the Personal Consumption Expenditures Price Index (PCEPI) in place of the CPI-U would make poverty measurement less accurate, thereby making information on which benefit eligibility determinations are made inaccurate and unreliable.
We strongly urge OMB not to make this proposed change without conducting extensive research and analysis on the impact on seniors, particularly low income seniors. The Supplemental Poverty Measure already shows that the OPM is currently undercounting seniors experiencing poverty—according to the SPM, in 2017 over 14% of people age 65 and older were living in poverty, compared to about 9% under the OPM.[1] The proposed change will only exacerbate this problem.
Because OMB is not seeking comment on the impact that would result from the change to the poverty guidelines promulgated by the Department of Health and Human Services (HHS), we are not directly commenting on that issue. However, as any change to the poverty threshold would affect the HHS poverty guidelines, we believe OMB must research, analyze, and seek public comments on the impact of such changes.
Any proposal that would change the inflation measure to shrink the OPM’s annual rate of increase would thereby artificially categorize low-income individuals as having income above the poverty threshold even though their actual income and resources have not increased. This would create a false and inaccurate assessment of their income level. This would, in turn, inappropriately reduce assistance for millions of older adults who would no longer qualify for programs that help them meet their basic needs, even though they continue to struggle to get by. With 10,000 people turning 65 every day, by 2030 nearly 1 in 5 Americans will be age 65 or older and relying on Social Security and Medicare.
In addition, changing the poverty threshold would affect the following programs that are priorities for the Center:
Subsidies for Medicare Prescription Drug and Physician Coverage
Although Medicare eligibility generally is not based on income, lower-income beneficiaries can qualify for assistance with their costs (paying for their premiums, deductibles, and cost-sharing) through programs that use the poverty threshold to determine eligibility. States are required to provide Medicare cost-sharing coverage for poor Medicare beneficiaries called qualified Medicare beneficiaries (QMBs) and premium payments for near-poor Medicare beneficiaries called specified low-income Medicare beneficiaries (SLMBs), qualified disabled and working individuals (QDWIs), and qualified individuals (QIs) under their Medicaid programs. Collectively, these programs are known as the Medicare Savings Programs (MSPs). The QMB benefit relieves the beneficiary of the cost-sharing that is otherwise imposed on a Medicare beneficiary: the Medicare Part B premium, the Part A premium for voluntary enrollees (i.e., those who do not receive premium-free Part A), and all deductibles and coinsurance imposed under Medicare Part A and Medicare Part B and copayments or other cost-sharing charged by Medicare Advantage (MA) plans. QMB coverage can save a recipient hundreds or even thousands of dollars each year.[2] The SLMB and QI benefit is payment by Medicaid of the Medicare Part B premium.
Seniors and people with disabilities can get help paying for Medicare Part D prescription drugs if they receive Medicaid or if their incomes and resources are otherwise low enough to qualify. The Part D Low Income Subsidy (LIS) is available to low income Medicare beneficiaries to help with Part D covered drugs. It is closely related to the MSPs in both design and administration. Eligibility rules for the two programs are similar, though not identical, and states are required by law to make LIS eligibility determinations through their Medicaid programs. Moreover, the law requires states, when they are assisting beneficiaries with LIS applications, to screen them for eligibility for MSPs and, if eligible, offer them an opportunity to enroll.[3] Finally, individuals enrolled in QMB, SLMB, or QI programs are deemed eligible for the LIS without having to apply or separately qualify by meeting the LIS income and asset eligibility rules. The value of the LIS is estimated by the Social Security Administration (SSA) to be $4,900 in 2019.[4] This assistance is critical for survival for low-income Medicare beneficiaries. Based on the Center on Budget and Policy Priorities’ initial calculations if the poverty measure’s annual inflation adjustment is reduced, by the tenth year:
- More than 250,000 people on Medicare would lose their eligibility for or get less help from prescription drug low-income subsidies, meaning their prescription drug costs would increase substantially;[5]
- Over 150,000 low-income seniors and people with disabilities would lose help paying for Medicare Part B premiums, meaning they would have to pay over a thousand dollars per year to maintain physician coverage.[6]
Affordable Care Act (ACA) Marketplace Health Insurance for Individuals
Eligibility for cost-sharing assistance and premium tax credits are determined by measuring income to the poverty level. Reducing the inflation adjustment for the poverty line would limit or eliminate subsidies over time; without the subsidies insurance would be less affordable. Tens of thousands of people would lose premium tax credits, and hundreds of thousands would have a reduction in their cost-sharing assistance. By the tenth year, it is estimated that, more than 150,000 ACA marketplace consumers would lose cost-sharing assistance, requiring them to pay higher deductibles.
If the Census Bureau uses the C-CPI-U to calculate the annual adjustments to the OPM, then more than 200,000 consumers would lose at least some of their cost-sharing assistance, significantly increasing their out-of-pocket costs.[7] Based on the Center on Budget and Policy Priorities’ initial calculations:
- More than 50,000 people would have deductibles increase by about $600 (from about $250 to $850), based on 2019 cost-sharing levels.[8]
- Another 50,000 or more people would have deductibles increase by about $2,350 (from about $850 to $3,200).[9]
- Tens of thousands more would have deductibles increase by about $1,200 (from about $3,200 to about $4,400).[10]
Medicaid
Reduced and inaccurate annual adjustments to the federal poverty line would mean that Medicaid income eligibility limits would be lower than they otherwise would be in any given year, and would continue to decrease over time. Through this proposal, the Administration is essentially imposing an automatic cut to Medicaid eligibility.
Medicaid expansion, which was adopted by thirty-seven states and the District of Columbia, resulted in increased health care coverage for millions of adults, including older adults age 50+ not yet eligible for Medicare, whose incomes fall below the current income-eligibility cutoffs. OPM’s proposal will shrink the inflation adjustment for the poverty measure, thereby undoing some of this progress and leading to fewer adults being insured. It is estimated that after ten years, over 250,000 adults will lose Medicaid coverage in the states that have implemented Medicaid expansion.[11]
Conclusion
We appreciate the opportunity to submit these comments. For additional information, please contact David Lipschutz, Senior Policy Attorney, dlipschutz@medicareadvocacy.org, or Kata Kertesz, Policy Attorney, kkertesz@MedicareAdvocacy.org, both at 202-293-5760.
David A. Lipschutz
Associate Director/Senior Policy Attorney |
Licensed in CA and CT
Kata Kertesz
Policy Attorney
Licensed in DC and MD
______________________
[1] Liana Fox, U.S. Census Bureau, The Supplemental Poverty Measure: 2017 (Sept. 2018), www.census.gov/content/dam/Census/library/publications/2018/demo/p60-265.pdf.
[2] Out-of-pocket costs for 2013 averaged $3,020 per Medicare-only beneficiary (without supplemental coverage) who reported fair to poor health. MedPAC, MedPAC June 2017 Data Book, at 34, available at http://www.medpac.gov/docs/default-source/data-book/jun17_databookentirereport_sec.pdf?sfvrsn=0 (site visited Apr. 4, 2019). Because dual eligibles are three times more likely than non-dual Medicare beneficiaries to report poor health, this number seems like a reasonable proxy for what can be saved by having access to the QMB benefit.
[3] 42 U.S.C. § 1396u-5(a)(3).
[4] Social Security Administration (SSA), “Extra Help with Medicare Prescription Drug Plan Costs,” available at https://www.ssa.gov/benefits/medicare/prescriptionhelp/ (site visited Apr. 4, 2019). Please check the ssa.gov site periodically for other updates.
[5] Aviva Aron-Dine and Matt Broaddus, “Poverty Line Proposal Would Cut Medicaid, Medicare, and Premium Tax Credits, Causing Millions to Lose or See Reduced Benefits Over Time,” Center on Budget and Policy Priorities, May 22, 2019, https://www.cbpp.org/research/poverty-and-inequality/poverty-line-proposal-would-cut-medicaid-medicare-and-premium-tax/
[6] Id.
[7] Id.
[8] Id.
[9] Id.
[10] Id.
[11] Larisa Antonisse et al., The Effects of Medicaid Expansion Under the ACA: Updated Findings from a Literature Review, Kaiser Family Foundation (Mar. 28, 2018), https://www.kff.org/medicaid/issue-brief/the-effects-of-medicaid-expansion-under-the-aca-updated-findings-from-a-literature-review-march-2018/.