Why Medicare’s Low-income Subsidy Program Must be Expanded
By Dan Klein, President & CEO
For economically vulnerable Medicare beneficiaries and people with disabilities, the Low-Income Subsidy (LIS) program is a critical safety net that helps cover out-of-pocket (OOP) costs for prescription drugs. While the LIS program helps millions of Americans access their prescription medications each year, current eligibility criteria blocks many individuals from getting the help they need.
What is the Low-Income Subsidy Program?
Medicare beneficiaries with low incomes and very few assets (e.g. bank accounts, stocks, bonds, etc.) and some people with disabilities may qualify for the LIS program, which helps cover OOP prescription drug costs. Also called “Extra Help,” the LIS program shields economically vulnerable and disabled beneficiaries from high OOP drug costs by helping them pay for monthly premiums, annual deductibles and co-payments for prescription medications obtained through Medicare prescription drug programs.i Learn more about LIS eligibility criteria here.
How Does the LIS Program Improve Access to Treatment?
By shielding low-income seniors from high OOP prescription drug costs, the LIS program is designed to facilitate access to needed treatments. There is extensive evidence showing that the LIS program has been successful in achieving this goal. One study of Medicare beneficiaries showed that the OOP cost to fill the first prescription of a new cancer medication was $3 for LIS beneficiaries and $3,178 for non-LIS patients. Beneficiaries in the LIS program were more likely to start the new treatment, and less likely to have interruptions in treatment.ii
In 2018, more than 12 million Medicare beneficiaries received assistance through the LIS program—about 29 percent of all beneficiaries who were enrolled in Medicare prescription drug programs that year.iii
What’s the Problem?
Numerous studies show that non-LIS Medicare beneficiaries are less likely to begin costly treatment, have longer delays when they do start treatment, and are more likely to stop their treatment.iv, v, vi, vii Because the LIS eligibility criteria for assets and income are so low, only a small portion of economically vulnerable Medicare beneficiaries qualify for the program. This leaves large numbers of people with no protection from high OOP drug costs, and no means to access their treatments.
Current eligibility criteria for the LIS program require older adults to have extremely low income—less than 150 percent of FPL—so millions of Medicare beneficiaries who live on the fringe of poverty are unable to afford their prescription medications because their assets—although very modest—render them ineligible for the program.
Policy Solutions are Necessary
The LIS program needs to be improved and simplified to enable more economically vulnerable older adults to access needed medical treatments. Eligibility must be expanded to include the Medicare beneficiaries living on the fringe of poverty. Read more about the LIS program and proposed policy solutions here.
i Extra Help with Medicare Prescription Drug Plan Costs https://secure.ssa.gov/i1020/start (accessed May 28, 2018).
iiOlszewski AJ, Dusetzina SB, Eaton CB, Davidoff AJ, Trivedi AN. Subsidies for Oral Chemotherapy and Use of Immunomodulatory Drugs Among Medicare Beneficiaries With Myeloma. J Clin Oncol. 2017 Oct 10;35(29):3306-3314.
iiiCubanski J, Damico A, Neuman T. Medicare Part D in 2018: The Latest on Enrollment, Premiums, and Cost Sharing. Available at: https://www.kff.org/medicare/issue-brief/medicare-part-d-in-2018-the-latest-on-enrollment-premiums-and-cost-sharing/. Accessed May 28,2019.
ivDoshi JA, Li P, Huo H, Pettit AR, Kumar R, Weiss BM, Huntington SF. High cost sharing and specialty drug initiation under Medicare Part D: a case study in patients with newly diagnosed chronic myeloid leukemia. Am J Manag Care. 2016 Mar;22(4 Suppl):s78-86.
vLi P, Wong YN, Jahnke J, Pettit AR, Doshi JA. Association of high cost sharing and targeted therapy initiation among elderly Medicare patients with metastatic renal cell carcinoma. Cancer Med. 2018 Jan; 7(1): 75–86.
viDoshi JA, Takeshita J, Pinto L, et al. Biologic therapy adherence, discontinuation, switching, and restarting among patients with psoriasis in the US Medicare population. Journal of the American Academy of Dermatology. 2016;74(6):1057-1065.e4.
viiJalpa A. Doshi Tianyan Hu Pengxiang Li Amy R. Pettit Xinyan Yu Marissa Blum. Specialty Tier‐Level Cost Sharing and Biologic Agent Use in the Medicare Part D Initial Coverage Period Among Beneficiaries With Rheumatoid Arthritis. Arthritis Care & Research, 68: 1624-1630.