Seniors get reprieve in drug plan allowance

Automatic income increases for Pennsylvania seniors likely won’t impact their ability to qualify for aid in paying for prescriptions this year.

House Bill 777, which unanimously passed both houses of the General Assembly and was presented to the governor for signing on last week, will extend a moratorium on counting Social Security cost-of-living adjustments (COLAs) towards income requirements to qualify for the PACE and PACENET benefit programs.

Originally passed in 2010, the moratorium has ensured existing enrollees in the two programs cannot be disqualified based on income increases from Social Security COLAs, regardless of whether the resultant higher incomes are above the eligibility thresholds.

The exemption, which expired in December, has been extended through Dec. 31, 2015.

“There are far too many people that are just below the qualification level each year,” Mary Mangione, APPRISE State Health Insurance Assistance Program coordinator with Experience Inc., said. “A COLA would definitely disqualify these individuals from a much needed resource. Adding a few dollars per-month to a Social Security check can by no means make up the hundreds of dollars that can be saved per-month by the PACE/PACENET programs.”

According to a state House of Representatives memorandum from the bill’s primary sponsor state Rep. Seth Grove, Social Security beneficiaries received a 3.6 percent COLA in 2012 and a 1.7 percent COLA for 2013. Combined, the memorandum estimated the increases in income would leave more than 40,000 individuals no longer eligible for the program.

PACE and PACENET subsidize low-cost medications for low-income state residents over age 65. Funding for the programs comes from the state lottery fund.

“Too often, I meet people with people that cannot afford their medications and don’t know where to turn. The PACE/PACENET programs have been a wonderful resource for these individuals,” Mangione said. “PACE was enacted in 1984. At that time, a single person could make up to $11,999 per-year and qualify for benefits. To qualify for PACE in 2014, a single person can make up to $14,500 per-year. By comparison, the poverty level for a single individual was $4,980 per-year in 1984. The poverty level for 2014 is $11,999 per-year. Although PACE has slightly increased its eligibility requirements and added programs such as PACENET, is it enough?”

The bill doesn’t just temporarily extend the COLA moratorium however, it makes certain income exempt from counting toward eligibility requirements for the programs permanently.

At present, Social Security income used to pay premiums for Medicare Part B coverage is counted as income for purposes of determining program eligibility. Assuming Gov. Tom Corbett signs the bill, these payments will not be included when determining income with regards to PACE and PACENET qualification.

Like many private insurance premiums are deducted directly from a paycheck, Medicare Part B premiums are automatically deducted from Social Security checks.

“According to the PA Department of Aging, approximately 8,200 seniors would qualify for PACE and PACENET if their Medicare Part B premium would be excluded from the current definition of income in the PACE law,” Grove said in the memorandum on the bill. “In real terms, seniors never receive the income for the Medicare Part B benefit since it is deducted directly from their Social Security checks. The average of this Part B benefit is approximately $106 per-month, or $1,200 per-year.”

Mangione agreed the change was needed.

“I have met with dozens of people over the last couple of years that do not qualify for PACE/PACENET as their income is anywhere from $1 to $100 over the eligibility limit,” Mangione said. “This causes an undue hardship for these people. Right now, I find this group of underserved people often having to choose between medications and food. By no longer including the Medicare Part B premium as income, a much larger group of people can be served.”

Medicare Part B generally covers outpatient medical services, including doctor visits, and medical devices and supplies.