Medicare Modernization Act & Work Incentives

According to The Health and Disability Advocates (HDA), a coalition of disability advocates from Chicago, the new benefits that come […]

According to The Health and Disability Advocates (HDA), a coalition of disability advocates from Chicago, the new benefits that come through the newly-enacted Medicare Modernization Act (MMA) for people with disabilities may conflict with policy changes in work incentives enacted over the past several years to empower people with disabilities to work while still maintaining their health care benefits.

The two agencies that have responsibility for implementing these new regulations are the Social Security Administration (SSA), and the Centers for Medicare and Medicaid Services (CMS). These two agencies should be working hand-in-hand to make a smooth transition for consumers from the current system to the new one, and for the most part they are succeeding. There are, however, some exceptions which are important for beneficiaries to be aware of, and to call to the attention of SSA and CMS staff should they encounter them.

A major area of concern for HDA with the MMA is consistency between the new MMA benefits, and existing benefits like SSI. CMS has given advocates the impression that if an SSI beneficiary is deemed eligible, they are eligible for successive years following the eligibility determination, however, the regulations seem to indicate that SSI beneficiaries have the possibility of being reviewed in successive years. This is a mixed message.

It would be more advantageous for beneficiaries if monthly reviews were an option. For example, if the eligible beneficiary’s income changes and they become unemployed in March, their eligibility status would not be reviewed until the following January at which time they could become eligible for additional benefits. But during those intervening months between the time they became unemployed and the redetermination, the SSI beneficiary would be without any additional assistance in paying for their prescription drugs even though their income decreased substantially.

The new MMA benefits are supposed to follow the SSI rules including the student earned income exclusion, but the regulations do not take this exclusion into account. So, for example, students with disabilities who might take a paid internship would have their income from the internship counted against their annual income. This would reduce the amount of “Extra Help” the student could receive.

HDA is also concerned that Medicare Part D, doesn’t recognize the Social Security trial work period for people on SSDI. The policy solution to this issue would be to have Medicare Part D disregard earned income during the trial work period in case the eligible beneficiary becomes unemployed during the trial work period, they would still need assistance with paying for their prescription drugs and could maintain that coverage without experiencing a gap in their coverage or having to go through another eligibility determination.

According to the HDA, another potential barrier is for people with Developmental Disabilities. If they are an SSDI beneficiary and have taken a job where they are earning $1,000 a month but only producing $700 of work a month, they are permitted under SSDI regulations to maintain their SSDI check, even though they exceed the SGA level for SSDI. But under the MMA, they would not be entitled to any additional “extra help,” or low income subsidy. SSDI takes into account the $300 gap, but Medicare Part D does not.

Finally, business expenses for self-employed beneficiaries are not recognized under Medicare Part D. Income related work expenses and blind income related work expenses are figured on a percentage. The percentages are 16.3 for non-blind and 25 percent for blind income related work expenses. An individual who has greater expenses will receive less help from the new benefit set than individuals whose expenses are lower than these percentages. This is a disincentive to work for an individual who is self-employed or wants to become self-employed. For self-employed beneficiaries, whose income changes on a monthly basis, monthly reviews would be more beneficial than yearly reviews.

Implementation of a new law is always a critical time for advocates and beneficiaries to be diligent in observing where gaps in the regulations that govern the implementation of the new law occur, and to call those gaps to the attention of the implementing agencies. It is to the advantage of beneficiaries of Social Security and Medicare to attend as many informational sessions about these new programs as possible and to ask as many questions as they can to clarify how these new programs will impact them. It is imperative that these potential challenges do not prevent anyone who believes they might be eligible for these new benefits from applying for them.

This article is meant to help inform consumers so that they can be better able to empower themselves to seek benefits they are entitled to. An informed consumer is an empowered consumer.

There is also help available to consumers by calling the Linkage Line at 1-800-333-2433, or Social Security at 1-800-772-1213. For information on Medicare Part D from CMS call 1-800-633-4227. Beneficiaries can also access information online at www.ssa.gov, or www.cms.hhs.gov. Health And Disability Advocates can be reached at 312-223-9600.

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