Washington, DC - The U.S. House of Representatives passed the Children’s Health and Medicare Protection (CHAMP) Act earlier this month. This legislation included a reauthorization of the State Children’s Health Insurance Program, as well as important provisions to strengthen the Medicare program and to ensure that physicians are paid adequately for services they provide to patients covered by Medicare. In summary, it put an end to wasteful spending of your tax dollars and made Medicare more accessible to people on fixed incomes. There were 225 votes in favor, including mine, and 204 votes against.

The CHAMP Act included provisions to gradually eliminate overpayments to Medicare Advantage plans. Payments to these plans are growing significantly faster than payments to any other provider within Medicare, despite the fact that only 17 percent of Medicare beneficiaries participate in them. In 2007, Medicare Advantage plans received 113 percent of what it would cost to serve the same beneficiary in the traditional Medicare program. As a result, traditional Medicare beneficiaries must pay an additional $48 per couple per year to finance overpayments to Medicare Advantage plans. And Medicare Advantage plans often charge more than traditional Medicare for certain services, especially for the sickest beneficiaries who need the most help.

Medicare Advantage can play an important role in the delivery of health care to Medicare beneficiaries. When Medicare allowed private health insurers to participate in the Medicare program, however, private health insurers agreed to provide extra benefits, reduce or eliminate cost-sharing and coordinate care for a lower cost than traditional Medicare. While private plans promised to save Medicare money, the reality is that overpayments have increased Medicare costs and threaten the solvency of the Medicare Trust Fund. In fact, the Congressional Budget Office has indicated that the gradual elimination of Medicare Advantage overpayments, as outlined in the CHAMP Act, would extend the solvency of the Medicare Trust Fund for three additional years.

Many Medicare Advantage beneficiaries have expressed concerns that the elimination of overpayments to Medicare Advantage plans would hurt their access to health care. However, several Medicare Savings Programs provide extra help to low-income beneficiaries who have difficulty meeting the Medicare premium and cost-sharing requirements.

Specifically, the Medicare Savings Programs provide extra help with premium, deductible and co-payments under Parts A and B for beneficiaries earning less than 150 percent of the federal poverty level (which comes out to $15,315 a year for an individual). The Medicare Low Income Subsidy provides extra help with prescription drug premiums, deductibles and co-payments under Part D and is also available to beneficiaries earning less than 150 percent of the federal poverty level. Specific benefits for both of these programs are based on a sliding income scale and eligibility is subject to asset limitations.

The CHAMP Act included important provisions to streamline these savings programs and make them easier for low-income seniors to utilize. It improved the assets test for these programs by increasing the amount of allowable resources to $17,000 for an individual and $34,000 for a couple, and beneficiaries would no longer have to report meal donations or help with the rent or utilities from their church, charity or family members as income. The legislation also exempts the balance of pension and retirement plans and the value of life insurance policies from resource determinations associated with the Part D Low-Income Subsidy.

These improvements to the Medicare Savings Programs will help more low-income beneficiaries take advantage of them and get extra help with Part B and Part D cost-sharing. If you think you may be eligible for these programs and would like assistance in determining your eligibility, please contact our office in Houston at (281) 999-5879 and we will help you to benefit from any savings programs to which you are entitled.