Introduction

Good afternoon.  Thank you for the opportunity to testify today.  My name is Cathy Roberts and I am a Senior Paralegal for the Empire Justice Center. We are a statewide legal services organization with offices in Albany, Rochester, White Plains and Central Islip (Long Island).  Empire Justice provides support and training to legal services and other community-based organizations, undertakes policy research and analysis, and engages in legislative and administrative advocacy.  We also represent low-income individuals, as well as classes of New Yorkers, in a wide range of poverty law areas including health law and public benefits.

As the Senior Paralegal in the Albany office, I manage the work Empire Justice does to maximize access to health care and nutritional assistance for seniors.  Assemblymember Dinnowitz and the Aging Committee have asked for information about the impact of the recession on seniors and their need for our services.  I want to thank you all for posing these important and timely questions and for continuing to spotlight the needs of the elderly, a population that we all know has been particularly hard hit by losses in retirement income and increased out-of-pocket costs for health care.   I’d like to begin by briefly describing the complex situation that confronts low-income New Yorkers who rely on public benefits for their health care.

Health Care Expenses for Low-Income and Elderly New Yorkers

Medicare beneficiaries face a $96.40/month Part B premium likely to increase in the future, a $1,068 Part A deductible for in-patient hospital care, as well as 20% co-insurance for most covered out-patient services.  The out-of-pocket expenses under the Part D prescription drug benefit are more staggering still.  Between 2008 and 2009, beneficiaries faced an average premium increase of 25%.  (Some increases were particularly high:  AARP’s MedicareRx Preferred plan, covering 2.7 million enrollees across the nation in 2008, has increased nearly 41% since 2006, and the premium for Humana Standard, another national provider with 1.5 million enrollees in 2008, has quadrupled since 2006). [1]  In addition, the infamous “doughnut hole” grew to $3,454 in 2009.  Such increases are burdensome for all seniors, but utterly crippling for low-income beneficiaries.

According to the most recent available Census data, roughly 18% of New Yorkers over the age of 65 (442,460) now live below the Federal Poverty Level (FPL), subsisting on at most $903/month. [2]  Greater still is the number of elderly individuals thought needy enough to require financial assistance for medical care, where limits are set at 135% FPL for the Medicare Savings Programs (MSP) and at 150% FPL for the Medicare Part D Low Income Subsidy (LIS).  According to recent Medicare statistics, 20% (562,930) of New York’s Medicare beneficiaries live below the poverty level, and nearly 30% (775,020) live below 200% FPL. [3]   Arguably, the FPL is not the most accurate measure of poverty.  If the National Academy of Science‘s new formula for poverty were adopted, many more seniors would fall below the poverty level, due to rising Medicare premiums, deductibles and the “doughnut hole” coverage gap in Medicare’s prescription drug benefit.  When New York City, for example, modified its assessment under this standard in 2008, the poverty level increased from 19% to 23%. [4]

Difficulties for Dual Eligibles

More than 700,000 New Yorkers are either Medicare recipients with incomes low enough to qualify for Medicaid, or Medicaid recipients who become sick enough or elderly enough to qualify for Medicare. [5] Depending on their income level and other eligibility criteria, these individuals may be entitled to full Medicaid coverage, help with Medicare cost sharing, or both, as well as help with Medicare Part D cost sharing through the Low Income Subsidy.  These elderly and disabled New Yorkers are generally referred to as “dual eligibles,” because they are eligible for benefits through two programs:  Medicare and Medicaid.  While it may seem that these dual eligibles should benefit from the best of both worlds, the reality is that they suffer from the confusion that arises from the complex interrelations of two very different systems and approaches to coverage.   As important as the benefits are, they are poorly understood by beneficiaries, administrative agencies, and providers alike, resulting in significant barriers to coverage.  Many people who could be covered are not.  The Centers for Medicare and Medicaid Services CMS estimates that, while about 720,000 people in New York are enrolled in the Medicare Part D Low Income Subsidy, another 120,000 eligible New Yorkers do not receive the benefit.  The numbers for MSPs administered through the state’s Medicaid program are even worse, with estimates of those eligible but not covered running as high as 66% for those below the poverty level and 87% for those slightly above the poverty level but still eligible for Medicaid payment of the Part B premium. [6] 

Dual eligibles face a variety of problems.  First, seniors with Medicare who become poor enough for Medicaid because of medical expenses have to learn to navigate the Medicaid Spend Down program in order to access Medicaid benefits.  Spend Down is a complicated system in which medical expenses are budgeted against excess income to establish eligibility.  Seniors need to submit bills for medical expenses on a monthly basis in order to activate their Medicaid cards, but the logistics for how to handle the paperwork vary from county to county. 

Seniors who are low-income enough to be on Medicaid before they age into Medicare are faced with a different kind of transition.  These elderly or disabled New Yorkers are required to sign up for Medicare Part D – and this complicated pharmacy coverage takes the place of a more comprehensive and straight-forward benefit available under Medicaid.  This group of folks is faced first with the formidable task of choosing the best Part D plan – looking for the one that will do the best job of covering the numerous prescriptions that Medicaid was paying for previously.  These seniors are also at the mercy of the a system that requires successful communication between local social services districts, the State Department of Health (SDOH), the federal Social Security Agency (SSA), and last but not least, the health plan involved, in order to successfully enroll in Part D’s “Extra Help” program, the only way to get help with Part D’s co-pays and “doughnut hole” gaps in coverage. 

Finally, even beyond Part D, Extra Help and Spend Down, it is not at all uncommon for dual eligibles to get caught up in a series of payment denials – even for doctor visits and out-patient procedures.  Confused providers often bill the wrong payor, and the various agencies involved can take months to sort through the byzantine rules applicable to different payment rates and permissible cost sharing levels. 

Services Provided by Empire Justice Center

Seniors who confront these navigational challenges to health care coverage turn to their local Offices for the Aging to get help.  We at Empire Justice Center, in turn, support the local Offices for the Aging, referred to as Health Insurance Counseling Assistance Programs or HIICAPs.  Working in tandem with our subcontractor in Buffalo, Legal Services for the Elderly and Disabled, who is also testifying here today, we utilize our legal expertise and detailed knowledge of the various health programs to provide seniors with the following services:

• Handling of appeals when Part D plans deny payment for medically necessary drugs
• Negotiating complicated payment disputes
• Developing strategies to help seniors meet the spend down
• Providing assistance with accessing help with cost sharing through programs like Extra Help and the Medicare Savings Programs
• We take referrals and provide trainings on these kinds of cases for HIICAP and senior service providers as well as legal services advocates across the state. 
• We provide assistance on other health access barriers affecting dual eligibles that often co-exist with their Part D-related issues (i.e., immigrant eligibility for Medicare, Medicaid renewals, long term care, durable medical equipment, Medicare Advantage, Medicaid liens, supplemental needs trusts, VA health care, etc.)

Although our primary function is to assist agencies working directly with beneficiaries, we gear up to provide more individualized counseling services during “crunch” times, such as the annual open enrollment period. [7] Another critical function is to listen for and identify systemic problems that the HIICAPs are seeing, and to work with our coalition partners toward possible solutions.   Empire Justice Center is  fortunate to have a seat at the table during health policy and planning meetings, both in local communities like the Finger Lakes, through it’s Health Systems Agency, and statewide, at meetings with the State Department of Health’s (DOH’s) Office of Long Term Care and the Medicaid Managed Care Advisory Review Panel, which examines health plan initiatives and service models for dual eligibles.  DOH staff have generally been very responsive to any concerns we raise, [8] and our national advocacy partners often turn to us to find out what is going on “in the field.”    For example, we were asked to provide Congressional testimony about Medicare marketing abuses uncovered by our upstate HIICAPs. [9] 

Funding Sources and the Effects of the Recession

We are funded to do the work described above on behalf of dual eligibles as part of a state initiative run through the New York State Office for the Aging (NYSOFA).  This initiative is known as MCCAP – the Managed Care Consumer Assistance Program.  We work in collaboration with six other agencies receiving MCCAP funding, the Medicare Rights Center, Statewide Senior Action, New York Legal Assistance Group, the Community Service Society in New York City, Selfhelp Community Services, Inc., and the Legal Aid Society’s Health Law Unit.  Collaboratively, this group sponsors monthly meetings of the Part D Consumer Coalition, hosts a statewide listserve, and collaborates on administrative initiatives to improve outcomes for seniors and disabled clients experiencing systemic barriers to health services. 

You ask about the effect of the recession on the funding for our work.  This last year, Empire Justice lost significant health access funding when we reached the end of a funding cycle for two grants from private foundations.  The availability of future funding from these sources is questionable given the shrinking balances in their investment portfolios.  Then, last legislative session, NYSOFA was forced to make decimating cuts to both HIICAP funding and the grants to the MCCAP agencies that support the HIICAP agencies.  Are the services critical?  So much so that we fought tirelessly to restore the money that was lost to MCCAP.  It was only in the final days of the budget negotiations that we discovered our supporters had found a means to plug the hole, albeit temporarily, with federal stimulus money made available under the American Recovery and Reinvestment Act of 2009 (ARRA).  We are writing grants at every opportunity in order to restore the private funding that supports our health access advocacy work. 

In addition, Empire Justice and other civil legal services providers are at the precipice of a dramatic loss of funding from a core funding source that will make it even more difficult to weather even small reductions in other sources of funding to maintain this important work.  The Interest on Lawyers Account, or IOLA Fund, which was created to help fund civil legal services, relies entirely on interest earnings on principle balances held briefly by attorneys for their clients.  The interest rate for IOLA is keyed to 60% of the Fed Funds rate – which is currently .25%.  One year ago the rate was 2%.  As a result, IOLA grantees are looking at a potential 80% reduction in their grants for 2010.  This, combined with reductions in various state contracts in 2009, particularly the 20% reduction in MMCAP funding, the spectre of potential mid year cuts, and the unknown of the 2010-11 state budget, makes it even more critical that the MCCAP funding be maintained so that we can continue our direct services to seniors and our support of the HIICAPs.

Creative Use of Existing Resources

To respond to another question posed by the committee, we have been creative in stretching existing resources in several ways.  First, in collaboration with two of our MCCAP colleagues (Legal Aid and Selfhelp, Inc.), we have created a new web page that we think will help front line advocates like the HIICAP workers by providing them with the legal authority and administrative strategy they need to maximize coverage for their dual eligible clients.  The web page serves as a cost-effective means of providing valuable legal guidance to HIICAPs and other advocates for the low-income elderly. We have ambitious plans for a roll-out of this new resource, along with webinars that will introduce advocates to the site and show them how to navigate the different tools it makes available. 

We have also met with our colleagues at NYSOFA in order to strategize about other ways we could support the local Area Offices for the Aging. From these conversations has grown an initiative to help connect local HIICAPS to staff at local Independent Living Centers.  These kinds of partnerships can result in new training opportunities for disability advocates, who can now help their clients navigate Part D related issues.  In return, the disability advocates can increase the reach of HIICAP offices in their efforts to capture data on the needs of disabled Medicare recipients, who may be less inclined to seek services from offices established for seniors.  We have had early success with this partnership initiative in Monroe County, and hope to make similar introductions in many other upstate counties. 

In addition to our website roll-out and collaboration with disability advocates, we have provided, and will continue to provide in-service trainings on dual eligible issues for HIICAPs and other senior service providers in upstate New York.   We are planning to offer these trainings in a web-based format in order to make them as widely available as possible. 

And finally, we have been fortunate that this year  a recent law graduate funded by the Hanna S. Cohn Equal Justice Fellowship in Rochester has committed to working on behalf of dual eligibles from our office.  He will be providing direct representation to seniors and disabled persons struggling with Part D coverage and Medicare cost-sharing, and he will be our voice in national Part D coalitions.  The funding for this position ends after one year, however, and we will need to seek additional funding to continue this valuable work.

We are excited about the work we are doing, and the opportunities that lie ahead with national health care reform and statewide planning for long term care services.  I would not be truthful, however, if I did not once again underscore our grave concerns about our ability to continue to serve the elderly and support their direct line advocates if state funding for MCCAP is not eventually restored.  We recognize that there are many critical services serving our senior population in New York State.  We view MCCAP as a small but essential piece of these vital services, helping to ensure that seniors have access to the medications they need to stay healthy and  living at home in their community for as long as possible.

We thank you for your interest and commitment to the elderly population in New York and  we look forward to working with you to preserve the availability of critical services for seniors as New York works it’s way out of the recession.

End Notes:

[1] Neuman, P. and Cubanski, J.  Medicare Part D Update – Lessons Learned and Unfinished Business.   The New England Journal of Medicine.  July 23, 2009. (www.nejm.org).
[2] Urban Institute and Kaiser Commission on Medicaid and the Uninsured  estimates based on the Census Bureau’s March 2007 and 2008 Current Population Survey (CPS:  Annual Social and Economic Supplements).  Available at:  http://www.statehealthfacts.org/comparebar.jsp?ind=10&cat=1. 
[3] “New York:  Distribution of Medicare Enrollees by Federal Poverty Level (2006-2007),” Kaiser Health Facts, available at:  http://www.statehealthfacts.org/profileind.jsp?ind=295&cat=6&rgn=34. 
[4] “City Refines Formula to Measure Poverty Rate,” New York Times, July 14, 2008.  Available at:  http://www.nytimes.com/2008/07/14/nyregion/14poverty.html?_r=1.
[5] See “Dual Eligible Enrollment,” Kaiser State Health Facts.  Available at:  http://www.statehealthfacts.org/profileind.jsp?ind=303&cat=6&rgn=34. 
[6] See, e.g., Chapter 5, Increasing Participation in the Medicare Savings Programs and the Low-Income Subsidy, Report to the Congress:  Medicare Payment Policy, March 2008.  Available at http://www.medpad.gov/chapters/Mar08_Ch05.pdf.   See also, “Upcoming Medicare Change is an Opportunity to Enroll Eligible Low-Income Seniors in Food Stamps,” Center on Budget and Policy Priorities (September 9, 2009), available at:  http://www.cbpp.org/cms/index.cfm?fa=view&id=2909.
[7] For example, just this past week, we began taking a steady stream of calls from beneficiaries in St. Lawrence County, who were referred to our toll-free number because the local HIICAP office is experiencing staff turnover.  
[8] Earlier this year, the Otsego County HIICAP coordinator contacted us about an MSP renewal issue.  MSP recipients in his county were being mailed the long Medicaid renewal form when it was time to recertify.  We brought this to DOH’s attention and DOH immediately agreed to put in a systems “fix” so that all MSP-only recipients would receive the much shorter MSP renewal form.
[9] Empire Justice’s Congressional testimony can be found at: http://waysandmeans.house.gov/hearings.asp?formmode=view&id=7124