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Who will be denied Medicare prescription drug subsidies because of the asset test?
Am J Manag Care. 2006 Jan; 12(1):46-54.AJ

Abstract

OBJECTIVE

To determine the number and characteristics of Medicare beneficiaries who will be excluded from low-income prescription drug subsidies because they do not qualify under an asset test.

STUDY DESIGN

Cross-sectional, using the US Census Bureau's Survey of Income and Program Participation (SIPP); results were based on interviews occurring between October 2002 and January 2003. The sample included 9278 Medicare beneficiaries, 2929 with incomes below 150% of the federal poverty level (FPL).

METHODS

Using SIPP, each sample member's income was compared to the FPL. Income was adjusted to include only liquid assets and primary residences. The number of individuals excluded by the asset test and their characteristics and types of assets responsible were calculated.

RESULTS

Of 13.97 million noninstitutionalized Medicare beneficiaries, 2.37 million (17%) with low incomes would be excluded from subsidized drug coverage due to the asset test. Compared to higher-income beneficiaries, the excluded individuals tended to be older, female, widowed, and living alone. Almost half of their assets were checking and savings accounts. Half of the individuals failing the test had assets less than 35,000 dollars above the allowing thresholds.

CONCLUSIONS

Widows are disproportionately affected by the asset test. When a husband dies, income plummets but accumulated assets often exceed those allowed under Medicare legislation. During their working years Americans are encouraged to save for retirement, but by accumulating modest amounts of assets, these same people often will then not qualify for low-income drug subsidies. Modifying or eliminating the asset test would help protect individuals disadvantaged by low incomes who have modest amounts of asset holdings.

Authors+Show Affiliations

Department of Health Services, UCLA School of Public Health, 90095-1772, USA. trice@ucla.eduNo affiliation info available

Pub Type(s)

Journal Article
Research Support, Non-U.S. Gov't

Language

eng

PubMed ID

16402888

Citation

Rice, Thomas, and Katherine Desmond. "Who Will Be Denied Medicare Prescription Drug Subsidies Because of the Asset Test?" The American Journal of Managed Care, vol. 12, no. 1, 2006, pp. 46-54.
Rice T, Desmond K. Who will be denied Medicare prescription drug subsidies because of the asset test? Am J Manag Care. 2006;12(1):46-54.
Rice, T., & Desmond, K. (2006). Who will be denied Medicare prescription drug subsidies because of the asset test? The American Journal of Managed Care, 12(1), 46-54.
Rice T, Desmond K. Who Will Be Denied Medicare Prescription Drug Subsidies Because of the Asset Test. Am J Manag Care. 2006;12(1):46-54. PubMed PMID: 16402888.
* Article titles in AMA citation format should be in sentence-case
TY - JOUR T1 - Who will be denied Medicare prescription drug subsidies because of the asset test? AU - Rice,Thomas, AU - Desmond,Katherine, PY - 2006/1/13/pubmed PY - 2006/3/3/medline PY - 2006/1/13/entrez SP - 46 EP - 54 JF - The American journal of managed care JO - Am J Manag Care VL - 12 IS - 1 N2 - OBJECTIVE: To determine the number and characteristics of Medicare beneficiaries who will be excluded from low-income prescription drug subsidies because they do not qualify under an asset test. STUDY DESIGN: Cross-sectional, using the US Census Bureau's Survey of Income and Program Participation (SIPP); results were based on interviews occurring between October 2002 and January 2003. The sample included 9278 Medicare beneficiaries, 2929 with incomes below 150% of the federal poverty level (FPL). METHODS: Using SIPP, each sample member's income was compared to the FPL. Income was adjusted to include only liquid assets and primary residences. The number of individuals excluded by the asset test and their characteristics and types of assets responsible were calculated. RESULTS: Of 13.97 million noninstitutionalized Medicare beneficiaries, 2.37 million (17%) with low incomes would be excluded from subsidized drug coverage due to the asset test. Compared to higher-income beneficiaries, the excluded individuals tended to be older, female, widowed, and living alone. Almost half of their assets were checking and savings accounts. Half of the individuals failing the test had assets less than 35,000 dollars above the allowing thresholds. CONCLUSIONS: Widows are disproportionately affected by the asset test. When a husband dies, income plummets but accumulated assets often exceed those allowed under Medicare legislation. During their working years Americans are encouraged to save for retirement, but by accumulating modest amounts of assets, these same people often will then not qualify for low-income drug subsidies. Modifying or eliminating the asset test would help protect individuals disadvantaged by low incomes who have modest amounts of asset holdings. SN - 1088-0224 UR - https://www.unboundmedicine.com/medline/citation/16402888/Who_will_be_denied_Medicare_prescription_drug_subsidies_because_of_the_asset_test L2 - https://www.ajmc.com/pubMed.php?pii=3075 DB - PRIME DP - Unbound Medicine ER -