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entitled 'Medicare Savings Programs: Results of Social Security 
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Report to Congressional Committees:

United States General Accounting Office:

GAO:

March 2004:

Medicare Savings Programs:

Results of Social Security Administration's 2002 Outreach to Low-Income 
Beneficiaries:

Outreach to Low-Income Medicare Beneficiaries:

GAO-04-363:

GAO Highlights:

Highlights of GAO-04-363, a report to congressional committees

Why GAO Did This Study:

To assist low-income beneficiaries with their share of premiums and 
other out-of-pocket costs associated with Medicare, Congress has 
created four Medicare savings programs. Historic low enrollment in 
these programs has been attributed to several factors, including lack 
of awareness about the programs, and cumbersome eligibility 
determination and enrollment processes through state Medicaid 
programs. Concerned about this low enrollment, Congress passed 
legislation as part of the Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000 (BIPA) requiring the Social 
Security Administration (SSA) to notify low-income Medicare 
beneficiaries of their potential eligibility for Medicare savings 
programs. The statute also required GAO to study the impact of SSA’s 
outreach effort. GAO examined what outreach SSA undertook to increase 
enrollment, how enrollment changed following SSA’s 2002 outreach, and 
how enrollment changed in selected states following SSA’s outreach and 
what additional outreach efforts these states undertook.

GAO reviewed information obtained from SSA and the Centers for 
Medicare & Medicaid Services (CMS), analyzed enrollment data provided 
by SSA and CMS, and interviewed officials in and obtained data from 
six selected states (Alabama, California, Louisiana, New York, 
Pennsylvania, and Washington). 

What GAO Found:

In response to a statutory requirement, SSA is carrying out an annual 
outreach effort to help increase enrollment in Medicare savings 
programs. This outreach effort consists of mailing letters to 
potentially eligible low-income beneficiaries nationwide as well as 
sharing data with states to assist with their supplemental outreach 
efforts. In 2002, SSA sent 16.4 million letters to low-income Medicare 
beneficiaries whose incomes from Social Security and certain other 
federal sources met the income eligibility criteria for Medicare 
savings programs. The 2002 letters provided eligibility criteria for 
programs in the beneficiary’s home state and urged beneficiaries 
interested in enrolling to call a state telephone number provided. In 
addition to sending these letters, SSA provided states with a data 
file containing information on the beneficiaries to whom it sent 
letters. In 2003, SSA sent another 4.3 million letters to potentially 
eligible beneficiaries, and indicated that it intends to repeat the 
outreach mailing annually to newly eligible beneficiaries and a 
portion of prior letter recipients.

Following SSA’s outreach efforts in 2002, GAO estimated that more than 
74,000 additional eligible beneficiaries enrolled in Medicare savings 
programs, 0.5 percent of all 2002 letter recipients, than would have 
likely enrolled without the letter. CMS enrollment data also showed 
that growth in Medicare savings programs enrollment for the year 
following SSA’s mailing was nearly double that for each of the 3 prior 
years. Of the 74,000 additional enrollees, certain states and 
demographic groups had somewhat larger increases in enrollment than 
other groups. The highest additional enrollment increase was in 
Alabama, where 2.9 percent of letter recipients enrolled, followed by 
Delaware at 2.0 percent. Beneficiaries less than 65 years old, persons 
with disabilities, racial and ethnic minorities, and residents in 
southern states also had higher enrollment rates than other groups. 

The percentage of letter recipients newly enrolling in Medicare 
savings programs following SSA’s 2002 mailing ranged from 0.3 to 2.9 
percent among the six states GAO reviewed. The varying effects on 
enrollment by state could be attributable to several factors, 
including the share of eligible beneficiaries enrolled in Medicare 
savings programs prior to the outreach, each state’s ability to handle 
increased call and application volume, and a state’s income and asset 
limits. Four states GAO reviewed reported increases in the numbers of 
calls received or applications mailed or received following the SSA 
mailing and then decreases after the mailing period ended. Each of the 
states GAO reviewed reported that the state or other stakeholders 
conducted additional outreach during SSA’s 2002 outreach.

SSA generally agreed with GAO’s findings. CMS stated that it did not 
have specific comments on the report. 

www.gao.gov/cgi-bin/getrpt?GAO-04-363.

To view the full product, including the scope and methodology, click 
on the link above. For more information, contact Kathryn G. Allen at 
(202) 512-7118.

[End of section]

Contents:

Letter:

Results In Brief:

Background:

SSA Is Conducting an Annual Outreach Effort Targeted to Low-Income 
Medicare Beneficiaries:

Medicare Savings Program Enrollment Increased by More than 74,000 
Beneficiaries Following the 2002 SSA Mailing:

Enrollment Increases Varied among Selected States We Reviewed, with 
Several Reporting Increased Calls and Applications Concurrent with SSA 
Mailing:

Agency and State Comments:

Appendix I: Methodology:

Appendix II: SSA 2002 Outreach Letter:

Appendix III: Medicare Savings Program Enrollment following 2002 SSA 
Mailing by State:

Appendix IV: Medicare Savings Program Enrollment following 2002 SSA 
Mailing by Demographic Group:

Appendix V: Comments from the Social Security Administration:

Related GAO Products:

Tables:

Table 1: Medicare Coverage and Beneficiary Cost Sharing for 2003:

Table 2: Medicaid and Medicare Savings Programs' Eligibility Criteria 
and Benefits for Low-Income Medicare Beneficiaries, 2003:

Table 3: Enrollment in Medicare Savings Programs by Sample Cohort, 
December 2002:

Table 4: Medicare Savings Program Enrollment, May 1999 to May 2003:

Table 5: Increase in Enrollment following SSA's Outreach to Targeted 
Population in Six Selected States, December 2002:

Table 6: Average Monthly Calls and Applications Related to Medicare 
Savings Programs for Four States prior to, during, and/or after SSA's 
Mailing Outreach, January 2002 to April 2003:

Figures:

Figure 1: Medicare Savings Programs Enrollment in Two Sample Cohorts of 
SSA Letter Recipients, June 2002 through December 2002:

Figure 2: Sample 2002 SSA Letter:

Figure 3: Estimated Percentage Change in Medicare Savings Program 
Enrollment Following 2002 SSA Mailing by State, December 2002:

Figure 4: Estimated Percentage Change in Medicare Savings Program 
Enrollment Following 2002 SSA Mailing by Demographic Group, December 
2002:

Abbreviations:

BIPA: The Medicare, Medicaid, and SCHIP Benefits Improvement and 
Protection Act of 2000: 

CMS: Centers for Medicare & Medicaid Services: 

FPL: federal poverty level: 

MBR: Master Beneficiary Record: 

QDWI: Qualified Disabled and Working Individuals: 

QI: Qualifying Individuals 

QMB: Qualified Medicare Beneficiaries: 

SLMB: Specified Low-Income Medicare Beneficiaries: 

SSA: Social Security Administration: 

SSI: Supplemental Security Income:

United States General Accounting Office:

Washington, DC 20548:

March 26, 2004:

Congressional Committees:

Medicare provides health insurance coverage for a broad array of 
services, including hospital, physician, home health, and other 
services, to more than 40 million Americans who are elderly, disabled, 
or have end-stage renal disease. Medicare beneficiaries pay a portion 
of the program's costs through cost-sharing provisions--including 
premiums, deductibles, and coinsurance--that can be difficult to afford 
for low-income beneficiaries. To assist low-income beneficiaries, 
Congress has created several Medicare savings programs that help pay 
for some or all of Medicare's cost-sharing provisions. There are four 
Medicare savings programs, each with differing income eligibility 
requirements and levels of benefits--the Qualified Medicare Beneficiary 
(QMB), Specified Low-Income Medicare Beneficiary (SLMB), Qualifying 
Individual (QI), and Qualified Disabled and Working Individual (QDWI) 
programs. To enroll, eligible beneficiaries must have incomes and 
assets within the specific program's federal ceilings and enroll 
through their state Medicaid program, the joint federal state program 
that covers health care services for certain individuals with low 
incomes and resources. States may have less restrictive income and 
asset requirements that eligible beneficiaries meet to qualify. As of 
September 2003, about 6.2 million beneficiaries were enrolled in 
Medicare savings programs.

We reported in 1999 that 43 percent of beneficiaries eligible for the 
QMB and SLMB programs were not enrolled.[Footnote 1] More recent 
studies also have reported low enrollment rates.[Footnote 2] Low 
program enrollment has been attributed to several factors, including a 
lack of awareness about the programs, ineffective outreach, a 
cumbersome eligibility determination and enrollment process that varies 
among state Medicaid programs, and perceived stigma among some 
potentially eligible beneficiaries about enrolling in a program for 
low-income people.

Concerned about low enrollment in Medicare savings programs, Congress 
passed legislation in 2000 requiring the Social Security Administration 
(SSA) to conduct outreach to low-income Medicare beneficiaries to 
notify them of their potential eligibility for Medicare savings 
programs.[Footnote 3] SSA began notifying beneficiaries in response to 
the statutory requirement in 2002. The statute also required us to 
study the impact of SSA's outreach.[Footnote 4] As agreed with the 
committees of jurisdiction, this report addresses the following 
questions:

* What outreach has SSA undertaken to increase enrollment in Medicare 
savings programs in response to the statutory requirement?

* How did enrollment in the Medicare savings programs change following 
SSA's 2002 outreach to potential beneficiaries?

* How did enrollment in these programs change in selected states 
following SSA's outreach, and what outreach efforts did these selected 
states also undertake?

To examine SSA's response to the statutory requirement for outreach to 
eligible low-income Medicare beneficiaries, we obtained relevant 
documents and interviewed officials from SSA and the Centers for 
Medicare & Medicaid Services (CMS), the federal agency responsible for 
administering the Medicare savings programs. To determine how 
enrollment in Medicare savings programs changed following SSA's 
outreach, we analyzed records from SSA's Master Beneficiary Record 
(MBR)--a database that contains the administrative records of Social 
Security beneficiaries, including payments for Medicare premiums--and 
we report the additional enrollment following the 2002 SSA outreach 
that was beyond what would have likely occurred in the absence of SSA's 
outreach. We estimated the additional enrollment increase following the 
SSA mailing to all letter recipients.[Footnote 5] We analyzed these 
enrollment changes at the national level as well as separately for all 
states[Footnote 6] and several demographic groups, such as 
beneficiaries less than 65 years of age or in certain minority groups. 
Any difference in increased enrollment among state or demographic 
groups that we report was statistically significant at a 95 percent 
confidence level. We also obtained CMS's national enrollment data for 
the Medicare savings programs and compared enrollment trends before and 
after the SSA outreach. Whereas the SSA MBR data we analyzed are 
specific to those beneficiaries who were sent SSA's mailing, the CMS 
data also included existing beneficiaries and are not limited to the 
beneficiaries who were sent SSA's mailing. To assess how SSA's outreach 
affected enrollment in selected states and what outreach efforts these 
states undertook, we interviewed officials and collected data from six 
states--Alabama, California, Louisiana, New York, Pennsylvania, and 
Washington. We selected these states based on several factors, 
including their different levels of change in overall Medicare savings 
programs enrollment from 2002 to 2003, geographic diversity, relatively 
large populations of Medicare savings programs enrollees, and 
availability of data on their program enrollment. It was beyond the 
scope of our work to examine the effectiveness of any outreach 
performed by states or CMS separately from SSA's outreach. In 
conducting our analyses, we obtained information from SSA and CMS on 
reliability checks they made on the data and any data limitations 
provided to us, and concluded that their data were sufficiently 
reliable for our analysis. Appendix I provides more detailed 
information on our methodology. We performed our work from February 
2003 through March 2004 in accordance with generally accepted 
government auditing standards.

Results In Brief:

In response to a statutory requirement in the Medicare, Medicaid, and 
SCHIP Benefits Improvement and Protection Act of 2000 (BIPA), SSA is 
carrying out an annual outreach effort to help increase enrollment in 
Medicare savings programs. This outreach effort consists of mailing 
letters to all low-income Medicare beneficiaries nationwide who were 
not enrolled in Medicare savings programs at the time the letters were 
sent as well as sharing data with states to assist with any state 
outreach efforts. From May through November 2002, SSA sent 16.4 million 
letters to low-income Medicare beneficiaries whose incomes from Social 
Security and certain other federal sources met the income eligibility 
criteria for Medicare savings programs. Because SSA does not have 
complete information on beneficiaries' income and assets, however, many 
of these beneficiaries could have had other income or assets that would 
exceed the program's eligibility criteria, thus reducing the number of 
eligible beneficiaries. The 2002 letters provided eligibility criteria 
for the Medicare savings program in the beneficiary's home state and 
urged beneficiaries interested in enrolling to call a state telephone 
number provided. In addition to sending these letters, SSA provided 
states with a data file containing information on the beneficiaries to 
whom it sent letters. From June through October 2003, SSA sent 4.3 
million letters to potentially eligible beneficiaries, including 
beneficiaries newly eligible for Medicare savings programs as well as a 
portion of those who had been sent the 2002 letter but who had not 
enrolled. SSA indicated that it intends to annually repeat the outreach 
mailing to potentially eligible beneficiaries.

Following SSA's outreach efforts in 2002, we estimated that more than 
74,000 additional eligible beneficiaries enrolled in Medicare savings 
programs than would have likely enrolled without the letter. This 
represents about 0.5 percent of all letter recipients. Further, CMS 
data showed that overall enrollment growth in Medicare savings programs 
nationwide for the year following SSA's mailing was nearly double each 
of the 3 prior years. Thirty-five states had a statistically 
significant additional increase in enrollment nationwide following the 
SSA mailing, with the largest increases in Alabama (2.9 percent) and 
Delaware (2.0 percent). Beneficiaries less than 65 years old, persons 
with disabilities, racial and ethnic minorities, and residents in 
southern states had higher additional enrollment rates than other 
groups.

Additional enrollment in Medicare savings programs varied significantly 
among the six states we reviewed, ranging from 0.3 percent in 
California, Washington, and New York to a high of 2.9 percent in 
Alabama. The varying effects on enrollment by state could be 
attributable to several factors, including the share of eligible 
beneficiaries already enrolled in Medicare savings programs prior to 
the outreach, a state's ability to handle increased call and 
application volume, and a state's income and asset limits. Four states 
we reviewed reported significant increases in the numbers of calls 
received by their hot lines related to Medicare savings programs and 
applications mailed or received during the SSA mailing and then 
decreases after the SSA mailing period ended. Each of the states we 
reviewed reported that the state or other stakeholders, such as 
community organizations that advocate for low-income elderly or private 
health plans that participated in Medicare, supplemented SSA efforts 
with additional outreach that may have also contributed to increased 
interest and enrollment in Medicare savings programs.

In commenting on a draft of this report, SSA generally agreed with our 
findings and noted that improvements in state enrollment processes 
could further increase enrollment. CMS stated that it did not have 
specific comments on the report. Louisiana noted that, in comparison to 
its experience in 2002, it observed little increase in calls following 
the 2003 SSA mailing. New York noted that it had a larger increase in 
Medicare savings program enrollment overall than we showed in the draft 
report. However, we report the increase in enrollment specifically 
attributable to the 2002 SSA outreach mailing, not the net increase in 
enrollment, which could also be due to factors besides the SSA mailing.

Background:

Medicare covers about 40 million elderly (over 65 years old) and 
disabled beneficiaries. Individuals who are eligible for Medicare 
automatically receive Hospital Insurance, known as part A, which helps 
pay for inpatient hospital, skilled nursing facility, hospice, and 
certain home health services. A beneficiary generally pays no premium 
for this coverage unless the beneficiary or spouse has worked fewer 
than 40 quarters in his or her lifetime, but the beneficiary is liable 
for required deductibles, coinsurance, and copayment amounts. Medicare-
eligible beneficiaries may elect to purchase Supplementary Medical 
Insurance, known as part B, which helps pay for certain physician, 
outpatient hospital, laboratory, and other services. Beneficiaries must 
pay a premium for part B coverage, which was $58.70 per month in 
2003.[Footnote 7] Beneficiaries are also responsible for part B 
deductibles, coinsurance, and copayments. Table 1 summarizes the 
benefits covered and cost-sharing requirements for Medicare part A and 
part B.

Table 1: Medicare Coverage and Beneficiary Cost Sharing for 2003:

Part A - Hospital insurance.

Part A premium; Beneficiary pays: 
No premium if beneficiary or spouse worked at least 40 quarters in 
lifetime; 
Premium if beneficiary or spouse worked fewer than 40 quarters in 
lifetime.

Inpatient hospital; Beneficiary pays: 
$840 deductible per benefit period[A]; 
$210 COPAYMENT PER DAY FOR DAYS 61-90; 
$420 copayment per day for days 91-150[B]; 
All costs beyond 150 days.

Skilled nursing facility[C]; Beneficiary pays: 
Nothing for first 20 days; 
Up to $105 copayment or less per day for days 21-100; 
All costs beyond 100 days in the benefit period.

Home health[D]; Beneficiary pays: 
No cost sharing; 
20 percent coinsurance for durable medical equipment.

Hospice; Beneficiary pays: 
Up to $5 copayment for outpatient drugs; 
5 percent coinsurance for inpatient respite care.

Blood; Beneficiary pays: 
Cost of first 3 pints.

Part B - Medical insurance[E]: 

Part B premium; Beneficiary pays: 
$58.70 per month.

Physician and medical; Beneficiary pays: 
$100 deductible each year; 
20 percent coinsurance for most services; 
50 percent coinsurance for outpatient mental health services.

Clinical laboratory; Beneficiary pays: 
No cost sharing.

Home health[D]; Beneficiary pays: 
No cost sharing; 
20 percent coinsurance for durable medical equipment.

Outpatient hospital; Beneficiary pays: 
Coinsurance may vary by service and may exceed 50 percent.

Blood; Beneficiary pays: 
Cost of first 3 pints; 
20 percent coinsurance for additional pints. 

Source: CMS.

[A] No deductible is charged for second and subsequent hospital 
admissions if they occur within 60 days of the beneficiary's most 
recent covered inpatient stay.

[B] After the first 90 days of inpatient care, Medicare will help pay 
for an additional 60 days of inpatient care (days 91-150). Each 
beneficiary is entitled to a lifetime reserve of 60 days of inpatient 
coverage. Each reserve day may be used only once in a beneficiary's 
lifetime.

[C] To qualify, a Medicare beneficiary must require daily skilled 
nursing or rehabilitative therapy services, generally within 30 days of 
a hospital stay of at least 3 days in length, and must be admitted to 
the nursing home for a condition related to the hospitalization.

[D] To qualify for services, beneficiaries must be confined to their 
homes; have a plan of care signed by a physician; and need intermittent 
skilled nursing care (other than solely venipuncture for the purpose of 
obtaining a blood sample), physical therapy, speech-language pathology 
services, or have a continuing need for occupational therapy services.

[E] No cost sharing is required for certain preventive services, 
including specific screening tests for colon, cervical, and prostate 
cancer, and flu and pneumonia vaccines.

[End of table]

Many low-income Medicare beneficiaries who cannot afford to pay 
Medicareís cost-sharing requirements receive assistance from Medicaid. 
For Medicare beneficiaries qualifying for full Medicaid benefits, state 
Medicaid programs pay for Medicareís part A (if applicable) and part B 
cost-sharing requirements up to the Medicaid payment rate as well as 
for services that are not generally covered by Medicare, such as 
prescription drugs. [Footnote 8]To qualify for full Medicaid benefits, 
beneficiaries must meet their stateís eligibility criteria, which 
include income and asset requirements that vary by state. [Footnote 
9]In most states, beneficiaries that qualify for Supplemental Security 
Income (SSI) automatically qualify for full Medicaid benefits.[Footnote 
10] Other beneficiaries may qualify through one of several optional 
eligibility categories targeted to low-income beneficiaries, 
individuals with high medical costs, or those receiving care at home or 
in the community who otherwise would have been institutionalized.

To assist low-income Medicare beneficiaries with their premium and 
cost-sharing obligations, Congress established several Medicare 
savings programs--the QMB, SLMB, QI, and QDWI programs. Under these 
programs, state Medicaid programs pay enrolled beneficiaries' Medicare 
premiums. As a result, for QMB, SLMB and QI beneficiaries, Medicare 
part B premiums would not be deducted from their monthly SSA checks. 
The QMB program also pays Medicare deductibles and other cost-sharing 
requirements, thereby saving beneficiaries from having to make such 
payments. Beneficiaries eligible for Medicare savings programs can 
apply for and be determined to be eligible through their state Medicaid 
programs. Thirty-three states have agreements with SSA whereby SSA 
makes eligibility determinations for a state if beneficiaries are 
deemed eligible by SSA to receive SSI benefits.[Footnote 11] In the 
other 18 states, even if an individual is eligible to receive SSI 
benefits, an individual must file an application with the state or 
local Medicaid agency to be eligible. Beneficiaries qualifying for 
Medicare savings programs receive different levels of assistance 
depending on their income. See table 2 for eligibility criteria and 
benefits for each program.

Table 2: Medicaid and Medicare Savings Programs' Eligibility Criteria 
and Benefits for Low-Income Medicare Beneficiaries, 2003:

Program: Medicaid; 
Income eligibility criteria[A,B]: Low-income Medicare beneficiaries, 
as defined by each state, whose incomes are up to 100 percent of the 
federal poverty level; 
Benefits: Optional benefits vary by state, but typically include 
Medicare part B premiums and Medicaid services, including those not 
covered under Medicare.

Program: Medicare savings programs: Qualified Medicare Beneficiary 
(QMB); 
Income eligibility criteria[A,B]: Medicare beneficiaries whose incomes 
are at 100 percent or less of the federal poverty level; 
Benefits: Medicare part A[C] (if applicable) and B premiums, 
deductibles, and coinsurance paid by state Medicaid program.

Program: Medicare savings programs: Specified Low-Income Medicare 
Beneficiary SLMB); 
Income eligibility criteria[A,B]: Medicare beneficiaries whose incomes 
are above 100 percent but less than 120 percent of the federal poverty 
level; 
Benefits: Medicare part B premiums paid by state Medicaid program.

Program: Medicare savings programs: Qualifying Individuals (QI)[D]; 
Income eligibility criteria[A,B]: Medicare beneficiaries whose incomes 
are at 120 percent but less than 135 percent of the federal poverty 
level; 
Benefits: Medicare part B premiums paid by state Medicaid program.

Program: Medicare savings programs: Qualified Disabled and Working 
Individuals (QDWI)[E]; 
Income eligibility criteria[A,B]: Disabled and working Medicare 
beneficiaries whose incomes do not exceed 200 percent of the federal 
poverty level; 
Benefits: Medicare part A premiums paid by state Medicaid program. 

Source: CMS.

[A] In 2003, the federal poverty level (FPL) per month was $748 for 
individuals and $1,010 for couples in the 48 contiguous states and the 
District of Columbia. Higher amounts were specified for Alaska and 
Hawaii.

[B] States also have asset limits for individuals to qualify for 
Medicaid or Medicare savings programs. These vary by state, but most 
often for Medicaid, eligible beneficiaries must have assets no greater 
than the limit for SSI, which is $2,000 for individuals and $3,000 for 
married couples. SSI resource limits typically exclude the 
beneficiary's automobile and house. For Medicare savings programs, 
eligible beneficiaries typically must have assets no greater than twice 
the limit for SSI.

[C] Medicare part A premiums are covered under the QMB program for 
beneficiaries who worked fewer than 40 quarters.

[D] Until December 2002, the QI program, a federal block grant to the 
states, consisted of two parts--QI-1 and QI-2. The QI-1 program 
(covering beneficiaries with incomes at least 120 percent but less than 
135 percent of FPL) and the QI-2 program (covering beneficiaries with 
incomes at least 135 percent but less than 175 percent of FPL) were 
originally authorized through December 2002. The QI-2 program ended as 
originally provided, but the QI-1 program was reauthorized through 
September 2004.

[E] These individuals are required to pay part A premiums because they 
are no longer entitled to free Medicare part A benefits having 
successfully returned to work and exhausted the free Medicare part A 
benefits available to them following the end of their disability 
benefits.

[End of table]

In 1998, Congress passed legislation specifically providing funding for 
SSA to evaluate ways to promote Medicare savings programs.[Footnote 12] 
In response, SSA conducted demonstration projects to explore the 
effects of using various approaches to increase participation in 
Medicare savings programs. In one of these demonstrations conducted in 
1999 and 2000, SSA tested six models designed to increase awareness and 
reduce barriers to enrollment. The models were implemented at 20 sites 
in 10 states, as well as the entire state of Massachusetts. The models 
differed in the extent to which SSA was involved in outreach efforts 
beyond mailing the letters. For example, in the "application model," 
SSA staff screened beneficiaries if they appeared to be eligible, 
completed applications, collected supporting documents, and forwarded 
the completed application form and supporting evidence to the state 
Medicaid agency for an eligibility determination. In the "peer 
assistance model," Medicare beneficiaries contacted an AARP toll-free 
number and were screened for program eligibility by an AARP 
volunteer.[Footnote 13] Across all six models, SSA sent more than 
700,000 letters informing low-income Medicare beneficiaries that they 
may be eligible for benefits under the Medicare savings programs. The 
enrollment rate for each model varied--ranging from an additional 7 
enrollees per 1,000 letters to 26 enrollees per 1,000 letters--with the 
application model recording the highest enrollment rate and peer 
assistance recording the lowest.[Footnote 14]

In 2000, Congress amended the Social Security Act, through BIPA, 
requiring the Commissioner of Social Security to notify eligible 
Medicare beneficiaries about assistance available from state Medicaid 
programs to help pay Medicare premiums and cost sharing. BIPA also 
required SSA to furnish each state Medicaid program with the names and 
addresses of individuals residing in the state that SSA determines may 
be eligible for the Medicare savings programs. SSA is required to 
update such information at least annually.[Footnote 15]

In addition to SSA's outreach efforts, CMS and individual states have 
engaged in efforts to increase enrollment in Medicare savings programs. 
Since fiscal year 2002, CMS has included increasing awareness of the 
Medicare savings programs as one of its Government Performance and 
Results Act (GPRA) goals.[Footnote 16] Specifically, CMS's goal in 
fiscal year 2002 was to develop a baseline to measure awareness of 
Medicare savings programs and to set future targets for increasing 
awareness. CMS estimated that 11 percent of beneficiaries were aware of 
Medicare savings programs in 2002 and the goal was to increase this to 
13 percent for fiscal year 2003. As part of its efforts to increase 
awareness, CMS has coordinated with states, SSA, and other 
organizations regarding various outreach efforts; provided information 
about Medicare savings programs in various CMS publications; and 
developed a variety of educational materials for targeted populations, 
including minorities. CMS efforts in increasing enrollment in earlier 
years included setting state-specific enrollment targets and measuring 
progress toward these enrollment targets; developing and disseminating 
training and outreach materials to the states, and sponsoring national 
and regional training workshops for a variety of stakeholders, 
including other federal and state agencies, health care providers, and 
community organizations; designing a model application for Medicare 
savings programs that states can consider adopting; and providing grant 
funding to state Medicaid agencies, state health insurance assistance 
programs, and national advocacy groups to test and promote innovative 
approaches to outreach.

In 2001, CMS also contracted for a survey of states to identify 
activities undertaken to increase program enrollment and streamline 
administration of these programs. Some of the most common state efforts 
included allowing application by mail (49 states), eliminating in-
person interviews (46 states), developing a shorter application form 
(43 states), and conducting outreach presentations at health fairs (34 
states). Other state efforts identified by the survey included:

* increasing awareness of the programs through outreach efforts such as 
direct mailings and other printed material, and public service 
announcements on radio, television, and in newspapers;

* providing training for employees and education for beneficiaries;

* developing partnerships with other entities, such as State Health 
Insurance Assistance programs and local agencies on aging, to enhance 
outreach efforts and promote issues and solutions involving the 
Medicare savings programs;

* eliminating potential barriers to enrollment such as streamlining the 
enrollment and renewal process and easing financial eligibility rules;

* supplementing program benefits with other benefits, such as 
prescription drug discount programs; and:

* providing information targeting underserved populations, including 
minorities.

SSA Is Conducting an Annual Outreach Effort Targeted to Low-Income 
Medicare Beneficiaries:

In response to BIPA, SSA is conducting an annual outreach effort to 
help increase enrollment in Medicare savings programs. This outreach 
consists of a nationwide mailing campaign and data sharing with the 
states. SSA selected low-income Medicare beneficiaries to be sent an 
outreach letter if their incomes were below the income eligibility 
ceilings for the Medicare savings programs. From May through November 
2002, SSA sent a total of 16.4 million outreach letters to persons 
potentially eligible for QMB, SLMB, and QI. Additionally, in late 2002, 
SSA sent about 53,000 letters to those potentially eligible for 
benefits under the QDWI program. Starting in 2003, SSA has targeted 
annual outreach letters to individuals newly eligible for Medicare as 
well as a subset of those who were sent outreach letters in 2002 but 
are still not enrolled. From June through October 2003, SSA sent 
outreach letters to 4.3 million of these beneficiaries. SSA intends to 
continue its outreach mailing annually to potentially eligible 
beneficiaries, including recipients who did not enroll after receiving 
earlier letters, as well as those whose income has declined, making 
them eligible for the program. In addition to sending outreach letters, 
in 2002 and 2003 SSA provided states with a data file that listed 
residents who were potentially eligible for benefits under the Medicare 
savings programs. SSA plans to continue sharing these data once a year 
with states. The data provided by SSA could be used by the states to 
coordinate their outreach with SSA's or supplement SSA's outreach 
efforts.

For the 2002 mailing, SSA sent letters three times each week from May 
through November. Each time letters were mailed, SSA sent them to 
approximately 207,000 Medicare beneficiaries randomly selected from the 
16.4 million beneficiaries who were identified as potentially eligible 
for QMB, SLMB, and QI.[Footnote 17] Letters were targeted to 
beneficiaries whose incomes from Social Security and certain other 
federal sources were less than 135 percent of the federal poverty level 
(FPL).[Footnote 18] Specifically, those selected to be sent the 
outreach letters were intended to meet the following three criteria:

* individuals and couples entitled to Medicare, or within 2 months of 
Medicare entitlement eligibility;

* individuals who were not currently receiving Medicare savings program 
benefits under a state Medicaid program or not already entitled to full 
Medicaid based on SSI participation; and:

* individuals and couples whose combined Social Security income and 
Department of Veterans Affairs and federal civil service pensions fell 
below the program's income eligibility ceiling.

The letters provided information in English or Spanish about the 
Medicare savings programs, including state-specific asset guidelines 
and a state contact number.[Footnote 19] (See app. II for a sample 2002 
outreach letter.) At the end of November 2002, SSA sent a separate 
mailing to about 53,000 disabled working adults who were potentially 
eligible for benefits under the QDWI program.[Footnote 20]

Medicare beneficiaries who had sources of income other than Social 
Security--such as income from employment and public and private 
pensions--and whose incomes were above the programs' eligibility 
thresholds were selected nonetheless to be sent the SSA outreach letter 
because SSA's data systems do not collect information on these income 
sources. In addition, SSA's records do not contain information about 
beneficiaries' private assets, making it impossible for SSA to identify 
whether letter recipients had assets within their states' Medicare 
savings programs' eligibility limits--typically $4,000 for an 
individual and $6,000 for couples.

In 2002, the Medicare Rights Center, a national health advocacy group 
for older adults and people with disabilities, sought a federal court 
order requiring SSA to resend 1.4 million letters to potentially 
eligible beneficiaries in Connecticut and New York to correct erroneous 
information on the asset limit for the QI program. The New York and 
Connecticut letters had incorrectly informed potential beneficiaries 
that only individuals with assets of less than $4,000 were eligible for 
the QI program, even though Connecticut and New York abolished the 
asset requirement for QI eligibility in 2001 and 2002, respectively. 
SSA agreed to resend the letters and the parties settled the case 
before trial.

In addition to sending letters to potentially eligible low-income 
Medicare beneficiaries, in 2002 SSA provided all but six states with an 
electronic data file containing the names of all beneficiaries to whom 
it had sent letters in that state.[Footnote 21] The data file contained 
information that could assist states with outreach efforts, such as the 
name, address, Social Security number, date of birth, spouse's name, 
and the basis for Medicare entitlement of each letter recipient. SSA is 
required to provide updated data to the states each year.[Footnote 22]

For the June through October 2003 mailing, SSA sent a second round of 
letters to about 4.3 million potentially eligible low-income Medicare 
beneficiaries nationwide whom its records indicated might have met the 
QMB, SLMB, and QI income eligibility criteria and were not currently 
enrolled in Medicare savings programs. This mailing included 
beneficiaries who were newly eligible since the 2002 mailing, current 
Medicare beneficiaries who newly met the income criteria,[Footnote 23] 
and about one-fifth of the beneficiaries notified in 2002 who still met 
the mailing criteria but were not enrolled in a Medicare savings 
program.[Footnote 24] At the time we conducted our work, enrollment 
data for beneficiaries who were sent the letter in 2003 were not 
available.

In contrast to the 2002 letter that provided state-specific eligibility 
criteria and a state-specific telephone number, the 2003 letter did not 
contain customized state information, but provided more general 
national information. The letter suggested that beneficiaries who may 
be eligible check the government list in their local telephone books 
for their local Medicaid contact or call the general 1-800-Medicare 
number that refers callers to state help lines, such as state or local 
medical assistance offices, social services, or welfare offices. SSA 
gave several reasons for not including state-specific information in 
the 2003 letter. One official indicated that there was additional cost 
to SSA to develop state-specific letters and therefore the agency did 
not tailor the letters for each state. CMS officials reported that a 
few states did not want to provide state-level contact numbers because 
eligibility and other Medicare savings program administrative matters 
were actually conducted at the county levels. Furthermore, in some 
cases, the telephone numbers states initially provided were changed 
shortly before the 2002 mailings were begun, creating additional need 
for SSA to coordinate with states in finalizing the letters. However, 
some state officials we interviewed expressed concern about the lack of 
state-specific information for the 2003 mailing. Their concern was 
that, given that most states had established mechanisms for responding 
to these inquiries for the larger 2002 mailing, not including state-
specific criteria or contact information on the letter could make the 
letter less effective since it could be more difficult for 
beneficiaries to obtain direct assistance or applications for 
eligibility determinations.

Medicare Savings Program Enrollment Increased by More than 74,000 
Beneficiaries Following the 2002 SSA Mailing:

We estimate that SSA's mailing from May through November 2002 to 16.4 
million potentially eligible beneficiaries contributed to more than 
74,000 additional beneficiaries enrolling in Medicare savings programs. 
Further, in the year following SSA's mailing, nationwide enrollment in 
Medicare savings programs increased 2.4 to 2.9 percentage points over 
that in the 3 previous years. Certain demographic groups also had 
larger additional increases in enrollment following the 2002 SSA 
mailing. For example, beneficiaries less than 65 years old, persons 
with disabilities,[Footnote 25] racial and ethnic minorities, and 
residents in southern states experienced larger additional increases in 
enrollment.

More than 74,000 Additional Beneficiaries Enrolled in Medicare Savings 
Programs Following SSA's 2002 Mailing:

On the basis of our analysis of SSA's Master Beneficiary Record (MBR), 
we estimate that, of the 16.4 million SSA letter recipients in 2002, an 
additional 74,000 beneficiaries (0.5 percent of letter recipients) 
enrolled in Medicare savings programs than would have likely enrolled 
without the mailing. To estimate this increased enrollment, we examined 
two cohorts of letter recipients--a cohort of 1.3 million beneficiaries 
who were sent the letters during the first six mailings in May 2002 and 
a baseline cohort of 1.3 million beneficiaries who were sent the 
letters during the last six mailings through November 2002. Because SSA 
sent the mailing to beneficiaries in a random order nationwide from May 
through November 2002, the only difference between the cohorts is the 
time at which the letters were sent to them. As a result, other factors 
that could influence enrollment patterns, such as demographic 
differences or other outreach efforts by CMS and the states, should 
affect the May and November cohorts similarly. We used the November 
2002 cohort as a baseline to examine how the May 2002 cohort's 
enrollment in Medicare savings programs was affected following SSA's 
mailing.

As shown in figure 1, by August 2002--3 months after the initial 
letters were sent in May 2002--the Medicare savings program enrollment 
for the May cohort began to increase faster than that of the November 
cohort, which was yet to have the SSA letter sent to them. While the 
cohorts were sent the SSA letters in May or November 2002, SSA 
officials reported that it typically takes about 3 months before 
enrollment is reported in the MBR.

Figure 1: Medicare Savings Programs Enrollment in Two Sample Cohorts of 
SSA Letter Recipients, June 2002 through December 2002:

[See PDF for image]

[A] The baseline is the cohort that was sent the letter in November 
2002.

[End of figure]

As of December 2002, more than 5,800 additional beneficiaries in the 
cohort of 1.3 million beneficiaries who were sent the letter in May had 
enrolled in Medicare savings programs compared with the November 
cohort, whose enrollment was not yet affected by the mailing.[Footnote 
26] (See table 3.) This additional enrollment in the May cohort 
represents 0.5 percent of the letter recipients. Projecting the 
experience of the May cohort to the universe of the 16.4 million letter 
recipients results in an estimate of over 74,000 additional 
beneficiaries enrolling in Medicare savings programs as a result of the 
2002 SSA mailing.

Table 3: Enrollment in Medicare Savings Programs by Sample Cohort, 
December 2002:

Number of letter recipients in sample cohort who enrolled; 
Cohort that the SSA letter was sent to in May 2002: 30,291; 
Baseline cohort[A]: 24,473; 
Difference: 5,818.

Percent of letter recipients who enrolled; 
Cohort that the SSA letter was sent to in May 2002: 2.4; 
Baseline cohort[A]: 1.9; 
Difference: 0.5.

Estimated total number of recipients who enrolled; 
Cohort that the SSA letter was sent to in May 2002: 386,243; 
Baseline cohort[A]: 311,786; 
Difference: 74,457.

Source: GAO analysis of SSA MBR data.

Note: Each cohort included 1.3 million letter recipients.

[A] The baseline represents the cohort that was sent the letter in 
November 2002 because the effect of the letter was not yet evident 
during the period we analyzed.

[End of table]

Nationwide, CMS data showed that Medicare savings programs experienced 
an overall net increase in enrollment of 5.9 percent (341,069 
individuals) from May 2002--the start of SSA's mailing--to May 
2003.[Footnote 27] This 5.9 percent increase was nearly double the 3.0 
to 3.5 percent increases in the 3 previous years before SSA's 
nationwide mailings. (See table 4.) These data suggest that SSA's 
mailing helped to increase enrollment at a greater annual rate than in 
earlier years.

Table 4: Medicare Savings Program Enrollment, May 1999 to May 2003:

Month/year: May 1999; 
Enrollment: 5,242,378; 
Annual change in enrollment: N/A; 
Annual percentage Increase: N/A.

Month/year: May 2000; 
Enrollment: 5,398,468; 
Annual change in enrollment: 156,090; 
Annual percentage Increase: 3.0.

Month/year: May 2001; 
Enrollment: 5,570,231; 
Annual change in enrollment: 171,763; 
Annual percentage Increase: 3.2.

Month/year: May 2002; 
Enrollment: 5,763,553; 
Annual change in enrollment: 193,322; 
Annual percentage Increase: 3.5.

Month/year: May 2003; 
Enrollment: 6,104,622; 
Annual change in enrollment: 341,069; 
Annual percentage Increase: 5.9.

Source: GAO analysis of CMS third-party master file.

[End of table]

Certain States and Demographic Groups Had Higher Enrollment Rates 
Following SSA's Outreach:

Across the United States, letter recipients residing in the southern 
states had a 0.6 percent additional increase in enrollment following 
SSA's mailing. This was more than residents in the Northeast, Midwest, 
and West, where the additional increase in enrollment was 0.4 percent. 
Thirty-five states had an additional increase in enrollment following 
the SSA mailing compared to the increase that would likely have 
occurred without the letter. Of the thirty-five states, the largest 
additional increase in enrollment following the SSA mailing occurred in 
Alabama, (2.9 percent), followed by Delaware (2.0 percent), and 
Mississippi (1.3 percent). While data from 13 other states showed an 
increase in enrollment following the SSA mailing, these increases were 
not statistically significant. Another three states showed a decrease 
in enrollment following the SSA mailing, but these changes also were 
not statistically significant. Appendix III provides the additional 
percentage change in enrollment following the 2002 SSA mailing for each 
state.

Certain demographic groups also had higher additional increases in 
enrollment rates than the additional increase among all letter 
recipients. In comparison to the 0.5 percent additional increase in 
enrollment among all letter recipients, beneficiaries less than 65 
years old and beneficiaries of any age who qualified for Medicare as a 
result of a disability each had a 0.8 percent additional increase in 
enrollment following SSA's outreach.[Footnote 28] Also, minority 
beneficiaries, which based on SSA's data categories include blacks or 
individuals of African origin, Asians and Pacific Islanders, and North 
American Indians or Eskimos, had a 0.7 percent additional increase in 
enrollment. Appendix IV provides data for all demographic groups that 
we examined.

Enrollment Increases Varied among Selected States We Reviewed, with 
Several Reporting Increased Calls and Applications Concurrent with SSA 
Mailing:

The percentage of additional letter recipients newly enrolling in 
Medicare savings programs following SSA's mailings varied significantly 
among the six states we reviewed. Among these six states, enrollment 
increases ranged from 0.3 to 2.9 percent. Further, several states we 
reviewed reported that calls to their telephone hot lines and 
applications mailed or received increased sharply during the period of 
the SSA outreach. In addition, some states supplemented SSA efforts 
with outreach efforts of their own, while other states were aware of or 
assisted outreach efforts by private or community groups.

SSA Outreach Efforts Had Varying Effects on Enrollment in Selected 
States:

Among the states we reviewed, SSA's outreach had varying effects on the 
percentage of letter recipients enrolling. Alabama, with 2.9 percent 
additional letter recipients enrolled compared to the percentage that 
likely would have enrolled without the SSA letter, had the largest 
additional increase in enrollment following the SSA mailing. This 
contrasts with the national average of 0.5 percent. For the states we 
reviewed, SSA's outreach had the least impact on Medicare savings 
program enrollment in California, Washington, and New York with a 0.3 
percent increase in additional enrollment. (See table 5.):

Table 5: Increase in Enrollment following SSA's Outreach to Targeted 
Population in Six Selected States, December 2002:

State: Alabama; 
Percentage of additional letter recipients enrolling following SSA 
mailing: 2.9.

State: Louisiana; 
Percentage of additional letter recipients enrolling following SSA 
mailing: 0.9.

State: Pennsylvania; 
Percentage of additional letter recipients enrolling following SSA 
mailing: 0.4.

State: California; 
Percentage of additional letter recipients enrolling following SSA 
mailing: 0.3.

State: Washington; 
Percentage of additional letter recipients enrolling following SSA 
mailing: 0.3.

State: New York; 
Percentage of additional letter recipients enrolling following SSA 
mailing: 0.3.

State: All States; 
Percentage of additional letter recipients enrolling following SSA 
mailing: 0.5. 

Source: GAO analysis of SSA's Master Beneficiary Record.

[End of table]

The varying effects on enrollment by state can be attributed to several 
factors, including, the share of eligible beneficiaries already 
enrolled in Medicare savings programs prior to the outreach, a state's 
ability to handle increased phone calls and applications, and a state's 
income and asset limits. For example, a smaller share of low-income 
elderly beneficiaries in Alabama was enrolled in QMB as of the year 
prior to the SSA mailing than the national average. Specifically, the 
number of QMB enrollees in Alabama in 2001 was about half the number of 
Alabama seniors reported by the Census Bureau to have incomes below the 
limit for the QMB program. In contrast, about three-quarters of the 
seniors nationwide who reported income below the QMB limit were 
enrolled. As a result, a larger number of letter recipients in Alabama 
may have been able to meet the QMB and other Medicare savings program 
eligibility criteria whereas other states may have already enrolled a 
larger share of these beneficiaries. Further, each of the states we 
reviewed established or used an existing state-specific telephone 
number that was listed in the SSA letter to receive calls. After the 
SSA mailing started, however, California's phone number was 
discontinued and calls were redirected to CMS's nationwide 1-800-
Medicare number. California's lower enrollment could also result from 
its eligibility requirements for SSI. For example, in a prior 
demonstration, SSA's mailing in 1999 and 2000 resulted in lower 
enrollment in California than in other demonstration sites, in part 
because the state offered a generous state supplement to SSI. 
Therefore, there were potentially not as many people eligible for the 
Medicare savings programs.[Footnote 29] In addition, other state 
differences, such as different state asset eligibility requirements and 
application requirements as well as state efforts to support the SSA 
outreach, may have contributed to different effects among states.

States Reported Increased Interest in Medicare Savings Programs 
Concurrent with SSA and States' Outreach Efforts:

States we reviewed often reported that calls to their hot lines and 
applications for Medicare savings programs increased significantly 
during the period of the 2002 SSA mailing. Four states provided data on 
the monthly trends in the number of calls either related to Medicare 
and Medicaid in general or the Medicare savings program specifically 
that showed increases concurrent with the 2002 SSA mailing. Three 
states were also able to provide data on changes in the number of 
applications sent to interested beneficiaries or received from 
beneficiaries. (See table 6.) While officials in several states 
indicated that not all of the increases noted could be attributed 
directly to the SSA mailing, the data provided by the states suggest 
that beneficiaries' interest in Medicare savings programs increased 
during the mailing period. For example, Alabama experienced a 19 
percent increase in monthly calls to its state hot line related to any 
Medicare and Medicaid issue after the SSA mailings began; this was 
followed by a 25 percent decrease after the mailings ended. Alabama 
also experienced a 158 percent surge in applications received per month 
during the SSA mailing and then a decrease of 57 percent afterwards. 
State officials reported that Washington tracked calls and applications 
specific to the SSA mailing, and these data showed 85 percent decreases 
in both monthly call volume and applications mailed out to 
beneficiaries after the mailings ended; Washington also reported a 72 
percent monthly decrease in applications received after the 2002 
mailings ended.

Table 6: Average Monthly Calls and Applications Related to Medicare 
Savings Programs for Four States prior to, during, and/or after SSA's 
Mailing Outreach, January 2002 to April 2003:

State: Alabama; 
Average monthly calls: 
Average monthly calls for any Medicaid or Medicare issue (including 
Medicare savings programs): 
* Prior to: 25,133; 
* During: 30,010 (19 percent increase); 
* After: 22,485 (25 percent decrease); 
Average monthly applications: Average monthly applications received 
related to Medicare (including Medicare savings programs): 
* Prior to: 1,474; 
* During: 3,802 (158 percent increase); 
* After: 1,618 (57 percent decrease).

State: Louisiana; 
Average monthly calls: 
Average monthly calls for Medicare savings programs: 
* Prior to: 301; 
* During: 1,849 (515 percent increase); 
* After: 516 (72 percent decrease); 
Average monthly applications: Average monthly applications mailed for 
Medicare savings programs:[A]; 
* Prior to: 53; 
* During: 1,571 (2,865 percent increase); 
* After: 226 (86 percent decrease).

Average monthly applications: State: Average monthly applications 
received for Medicare savings programs: 
* Prior to: 2,131[B]; 
* During: 2,940 (38 percent increase); 
* After: 3,634 (24 percent increase.

State: Pennsylvania; 
Average monthly calls: 
Average monthly calls for Medicare savings programs: 
* Prior to: 1,095; 
* During: 4,418 (303 percent increase); 
* After: 2,039 (54 percent decrease); 
Average monthly applications: Not available[C].

State: Washington; 
Average monthly calls: 
Average monthly calls for Medicare savings programs specific to the 
SSA mailing: 
* Prior to: not available; 
* During: 1,180; 
* After: 175 (85 percent decrease); 
Average monthly applications: Average monthly applications mailed to 
beneficiaries in response to the SSA mailing: 
* Prior to: not available; 
* During: 1,127; 
* After: 168 (85 percent decrease).

State: Washington (continued); 
Average monthly calls: [Empty]; 
Average monthly applications: Average monthly applications received in 
response to the SSA mailing: 
* Prior to: not available; 
* During: 436[D]; 
* After: 121 (72 percent decrease). 

Source: GAO analysis of data from selected states.

Note: Unless otherwise noted, the period prior to the SSA mailing 
included January through April 2002; the period during the mailing was 
May through November 2002; and the period after the mailing was 
December 2002 through April 2003.

[A] Louisiana provided data on the number of applications that were 
sent to beneficiaries from the state's Medicaid office. These averages 
do not include applications mailed by other agencies or organizations 
across the state, which may explain why more applications were received 
than mailed during the same period.

[B] We did not include January 2002 applications in the monthly average 
because of a large surge in applications during that month, which was 
probably attributable to the state's QI program temporarily closing and 
reopening for enrollment.

[C] Pennsylvania reported that about 0.5 percent of individuals sent 
the SSA mailing filed applications, and 73 percent of filed 
applications were approved, but the officials could not provide monthly 
data.

[D] Data on applications received were not available for May and June 
2002 and are not included in the average.

[End of table]

Concurrent with SSA's mailing, each of the states we reviewed reported 
that the state or other stakeholders conducted additional outreach. For 
example, the Louisiana Department of Health and Hospitals and the 
Pennsylvania Health Law Project, a coalition advocating for low-income 
individuals and the disabled, each received 3-year grants from the 
Robert Wood Johnson Foundation in 2002 to conduct outreach to low-
income Medicare beneficiaries in these states. A state official also 
reported that in 2002 the New York Department of Health developed and 
distributed 100,000 copies of a brochure called "How To Protect Your 
Health and Money," which included information about the Medicare 
savings programs, and conducted a "Senior Day" at 16 sites in New York 
City and several other districts as well as presentations at local 
fairs. Other states reported coordinating with community or state 
organizations as well as private health plans participating in 
Medicare, such as health maintenance organizations participating in the 
Medicare + Choice program.[Footnote 30] Some private health plans 
conducted outreach to increase Medicare savings program enrollment 
since CMS pays these plans a higher rate for these enrollees. Several 
state officials also said that their states work with other groups, 
such as the local departments of aging or senior services and local 
businesses and community organizations, to assist with outreach efforts 
to potentially eligible beneficiaries. None of the states we reviewed 
reported having assessed the effectiveness of their outreach efforts.

Of the six states we reviewed, only Louisiana and Pennsylvania 
officials reported that they used the data file listing names and 
addresses of potentially eligible beneficiaries provided by SSA in 2002 
to assist with state outreach or enrollment efforts. For example, after 
receiving the SSA data file, seven parishes in Louisiana used it to 
obtain a list of potentially eligible beneficiaries and sent an 
application with a letter and return envelope to these beneficiaries. 
In 2003, about 20,450 applications were mailed to potential 
beneficiaries. Pennsylvania officials used the file to cross-check 
against the state's own data system to assess the number of 
applications authorized, rejected, or denied as a result of the SSA 
mailing.

Agency and State Comments:

We provided a draft of this report to SSA, CMS, and state Medicaid 
agencies in Alabama, California, Louisiana, New York, Pennsylvania, and 
Washington. In written comments, SSA generally concurred with our 
findings and provided technical comments that we incorporated as 
appropriate. SSA also noted that improvements in state enrollment 
processes could further increase enrollment. SSA's comments are 
reprinted in appendix V. In a written response, CMS stated it did not 
have any specific comments on the report. However, CMS provided 
technical comments that we incorporated as appropriate.

While we did not examine the effects of SSA's 2003 mailing, Louisiana 
Medicaid officials indicated that, in comparison to the 2002 SSA 
mailing, there was little increase in call volume following SSA's 2003 
mailing, and that they believe that this was because a state-specific 
telephone number was not included in the 2003 outreach letter. New York 
Medicaid officials stated that they found an increase in Medicare 
savings program enrollment of over 6 percent from December 2002 to 
December 2003. However, in addition to being a different timeframe from 
what we examined, we do not believe that all of this increase can be 
attributed to the SSA mailing. Based on our analysis of SSA's MBR data, 
we report a 0.3 percent increase in enrollment in New York specifically 
attributable to the 2002 SSA outreach mailing. We found the net 
increase in enrollment from May 2002 to May 2003 (following SSA's 2002 
mailing) to be 5.9 percent nationwide, similar to the net increase in 
enrollment that New York reported from December 2002 to December 2003. 
Louisiana and Pennsylvania Medicaid officials also provided technical 
comments that we incorporated as appropriate. Alabama, California, and 
Washington Medicaid officials reviewed the draft and stated that the 
report accurately reflected information relevant to their respective 
states.

We are sending copies of this report to the Commissioner of SSA, the 
Administrator of CMS, and other interested parties. We will also 
provide copies to others on request. In addition, this report will be 
available at no charge on GAO's Web site at http://www.gao.gov.

Please call me at (202) 512-7118 or John Dicken at (202) 512-7043 if 
you have any additional questions. N. Rotimi Adebonojo and Rashmi 
Agarwal were major contributors to this report.

Kathryn G. Allen: 
Director, Health Care--Medicaid and Private Health Insurance Issues:

List of Committees:

The Honorable Charles E. Grassley: 
Chairman: 
The Honorable Max Baucus: 
Ranking Minority Member: 
Committee on Finance: 
United States Senate:

The Honorable Joe Barton: 
Chairman: 
The Honorable John D. Dingell: 
Ranking Minority Member: 
Committee on Energy and Commerce: 
House of Representatives:

The Honorable William M. Thomas: 
Chairman: 
The Honorable Charles B. Rangel: 
Ranking Minority Member: 
Committee on Ways and Means: 
House of Representatives:

[End of section]

Appendix I: Methodology:

To determine what outreach the Social Security Administration (SSA) 
conducted in response to the statutory requirement, we obtained and 
reviewed copies of SSA documents, including sample 2002 and 2003 
outreach letters and data on the number of letters sent to eligible 
Medicare beneficiaries in each state, as well as reports prepared by 
the Centers for Medicare & Medicaid Services (CMS) related to the 
Medicare savings program. In addition, we interviewed officials from 
the SSA and CMS.

To determine how enrollment changed following SSA's outreach, we 
analyzed records from SSA's Master Beneficiary Record (MBR)[Footnote 
31]--a database that contains the administrative records of Social 
Security beneficiaries, including payments for Medicare premiums--and 
CMS's national enrollment data for the Medicare savings programs. The 
MBR data contain demographic information as well as information on the 
monthly deductions made from beneficiaries' Social Security checks to 
cover Medicare part B premiums.[Footnote 32] We obtained MBR data on 
beneficiaries who were sent the outreach letters in the first six 
mailings in May and the last six mailings through November 
2002,[Footnote 33] representing 2.6 million of the 16.4 million Social 
Security beneficiaries who were sent letters from SSA. To determine 
which letter recipients enrolled in the Medicare savings programs 
following SSA's 2002 mailing, we identified letter recipients who met 
the following criteria:

* those whose date of eligibility for Medicare savings programs began 
January 2002 or afterwards;

* those for whom a third-party payer, specifically a state, made 
payments on their behalf to cover Medicare part B premiums; [Footnote 
34] and:

* those who no longer had the premium deduction made from their Social 
Security checks to cover Medicare part B premiums at any point from 
June 2002 through December 2002.[Footnote 35]

In order to estimate the impact of the SSA outreach mailing on 
additional enrollment in Medicare savings programs, we analyzed monthly 
enrollment from June 2002 to December 2002 for two cohorts of letter 
recipients to identify letter recipients who enrolled in Medicare 
savings programs following the initiation of the SSA mailing in May 
2002.[Footnote 36] Because the mailings were sent to beneficiaries in a 
random order, the only notable difference between the recipients in the 
two cohorts would be the timing of when the SSA letters were sent to 
them. SSA officials noted that it typically takes about 3 months until 
enrollment is reported on the MBR. Therefore, since the mailings began 
in May 2002, the first effects of the mailing would not have been 
apparent until after June 2002. We analyzed the MBR data provided by 
SSA to determine specifically what month and year a letter recipient 
enrolled in Medicare savings programs. Using the enrollment by the 
November cohort as a baseline because these individuals met the same 
selection criteria as those in the May cohort, we estimated the net 
effect of the SSA mailing by comparing the difference in cumulative 
monthly enrollment between the May and November cohorts in December 
2002--this difference represented the additional enrollment we 
attributed to the SSA mailing.[Footnote 37] We made the comparison in 
December 2002 because after this date the enrollment of the baseline 
group began increasing at a rate faster than the May cohort, indicating 
that this was the point when the largest cumulative difference in 
enrollment between the two cohorts occurred before the effects of the 
mailing started becoming evident for the November cohort. Using the 
same methodology, we calculated the effect of the SSA outreach letter 
for certain demographic groups and for beneficiaries in each state. We 
also obtained and analyzed data contained in CMS's third party master 
file for the period May 1999 to May 2003 that tracks national Medicare 
savings programs enrollment.[Footnote 38] Using these data, we examined 
how national Medicare savings enrollment trends compared before and 
after the 2002 SSA mailing.

To determine how additional enrollment in the programs changed in 
selected states following SSA's outreach and what outreach efforts 
these states undertook, we interviewed Medicaid officials in six 
states--Alabama, California, Louisiana, New York, Pennsylvania, and 
Washington. We selected these states based on several factors, 
including states with different levels of change in overall Medicare 
savings programs enrollment from 2002 to 2003, geographic diversity, 
relatively large populations of Medicare savings programs enrollees, 
and availability of data on program enrollment. We also reviewed CMS's 
third party master file to identify how many beneficiaries in each 
state were enrolled in Medicare savings programs, and analyzed records 
from SSA's MBR to estimate the additional enrollment in each state 
following the SSA mailing. In addition, we obtained information from 
each state to the extent available on its involvement with the SSA 
mailing, the state's specific eligibility criteria for its Medicare 
savings program, outreach efforts conducted by the state to low-income 
Medicare beneficiaries, and state data on call and application volume 
before, during, and after the SSA outreach.

We obtained information from SSA and CMS on their data reliability 
checks and any known limitations on the data they provided us. SSA and 
CMS perform quality controls, such as data system edits, on the MBR and 
the third party beneficiary master file, respectively. We concluded 
that their data were sufficiently reliable for our analysis. A few MBR 
variables have certain limitations. For example, some Medicare 
beneficiaries receive their Social Security payments electronically, 
and therefore may not keep the record of their mailing address current. 
For our analysis we only used the beneficiary's state of residence, 
which is less likely to change as SSA reported that, even if a 
beneficiary's address changes, the beneficiary often:

stays within the same state of residence. Finally, since it is optional 
for beneficiaries to identify their race, a number of Social Security 
recipients do not. However, sufficient numbers of individuals reported 
their race to to allow us to analyze these data and also report missing 
or unknown values.

[End of section]

Appendix II: SSA 2002 Outreach Letter:

SSA mailed 16.4 million letters in 2002 to potentially eligible 
Medicare beneficiaries notifying them about state Medicare savings 
programs. These letters were customized to include state-specific 
information, including a state contact number. These letters were sent 
in English or Spanish, depending on the beneficiary's preference. 
Figure 2 provides a sample of the outreach letter sent to a beneficiary 
in Texas between May and November 2002.

Figure 2: Sample 2002 SSA Letter:

[See PDF for image]

[End of figure]

[End of section]

Appendix III: Medicare Savings Program Enrollment following 2002 SSA 
Mailing by State:

Figure 3 shows enrollment by state of the estimated 74,000 additional 
beneficiaries who enrolled in Medicare savings programs following the 
2002 SSA mailing. Because these estimates are based on two cohorts of 
about 1.3 million beneficiaries each that represent a sample of the 
entire population of 16.4 million beneficiaries, we calculated 95 
percent confidence intervals to reflect the potential for statistical 
error in projecting these estimates from the sample cohorts to the 
entire population. The small sample size in states with smaller 
populations results in larger confidence intervals for the estimates 
for these states. The highest additional increase in enrollment was in 
Alabama, in which an estimated 2.9 percent (with a 95 percent 
confidence interval of 2.6 percent to 3.3 percent) of beneficiaries who 
were sent the SSA letter enrolled than if the mailing had not occurred. 
In three states (Montana, Utah, and Vermont) our analysis showed no 
additional or slightly negative enrollment following the SSA mailing, 
and because the confidence intervals for these and 13 other states 
overlap the numeric value zero, the data do not show a statistically 
significant change in additional enrollment in the Medicare savings 
programs following the 2002 SSA mailing for these states. The other 35 
states showed a statistically significant increase in additional 
enrollment in the Medicare savings programs following the 2002 SSA 
mailing.

Figure 3: Estimated Percentage Change in Medicare Savings Program 
Enrollment Following 2002 SSA Mailing by State, December 2002:

[See PDF for image]

[End of figure]

[End of section]

Appendix IV: Medicare Savings Program Enrollment following 2002 SSA 
Mailing by Demographic Group:

On the basis of our analysis of SSA's MBR, we estimate that enrollment 
in Medicare savings programs was about 74,000 higher for Medicare 
beneficiaries following the 2002 SSA mailing than it would have been 
without the mailing. This represents about 0.5 percent of the 16.4 
million letters sent nationwide. However, this additional enrollment 
following the SSA mailing varied among demographic groups.

Figure 4 shows the additional enrollment in Medicare savings programs 
following the 2002 SSA mailing by geographic region and demographic 
groups, including racial categories, sex, disability status, and age 
categories. Because these estimates are based on two cohorts of about 
1.3 million beneficiaries each that represent a sample of the entire 
population of 16.4 million beneficiaries, we calculated 95 percent 
confidence intervals to reflect the potential for statistical error in 
projecting these estimates from the sample cohorts to the entire 
population. Additional enrollment following the 2002 SSA mailing was 
statistically significantly higher among beneficiaries in southern 
states compared to other geographic regions, minorities compared to 
white beneficiaries, beneficiaries with disabilities compared to 
beneficiaries without disabilities, and beneficiaries who were younger 
than 65 years compared to those who were 65 years or older.

Figure 4: Estimated Percentage Change in Medicare Savings Program 
Enrollment Following 2002 SSA Mailing by Demographic Group, December 
2002:

[See PDF for image]

Note: Some estimates do not show an upper or lower bound because the 95 
percent confidence interval was the same as the point estimate due to 
rounding.

[A] Based on SSA's data categories, "minority" includes blacks or 
individuals of African origin, Asians and Pacific Islanders, and North 
American Indians or Eskimos.

[End of figure]

[End of section]

Appendix V: Comments from the Social Security Administration:

SOCIAL SECURITY:

The Commissioner 

Febuary 20, 2004:

Ms. Kathryn G. Allen:

Director, Health Care--Medicaid and Private Health Insurance Issues: 
U.S. General Accounting Office Room 5C27:

441 G Street, NW: 
Washington, D.C. 20548:

Dear Ms. Allen:

Thank you for the opportunity to review and comment on the draft report 
"Medicare Savings Programs: Results of Social Security Administration's 
2002 Outreach to Low-Income Beneficiaries" (GAO-04-363). Our comments 
on the report are enclosed.

If you have any questions, please have your staff contact Candace 
Skumik, Director, Audit Management and Liaison Staff, at (410) 965-
4636.

Sincerely,

Signed by: 

Jo Anne B. Barnhart:

Enclosure:

SOCIAL SECURITY ADMINISTRATION	BALTIMORE MD 21235-0001:

COMMENTS ON THE GENERAL ACCOUNTING OFFICE (GAO) DRAFT REPORT "MEDICARE 
SAVINGS PROGRAMS: RESULTS OF SOCIAL SECURITY ADMINISTRATION'S 2002 
OUTREACH TO LOW-INCOME BENEFICIARIES" (GAO-04-363):

Thank you for the opportunity to review and comment on the draft 
report. We agree with GAO's findings that the Social Security 
Administration's (SSA) mailings of 16.4 million letters in 2002 to 
potentially eligible beneficiaries contributed to the increased 
enrollment in the Medicare Savings Programs. We are pleased to see that 
more than 74,000 
additional eligible beneficiaries enrolled in Medicare savings programs 
as a result of the outreach mailings carried out by SSA in 2002. We 
anticipate a continued increase in participation by low-income 
beneficiaries as the outreach efforts by SSA and State agencies 
generate increased awareness among eligible individuals. Indeed, SSA 
intends to repeat these outreach mailings on an annual basis.

Although outreach is an important component of this program, we believe 
that improvements in the State enrollment process could further 
increase enrollments. States may wish to consider publishing their 
eligibility requirements on a central website. They could also share 
information with each other on methods for streamlining the enrollment 
process or increasing enrollments.

[End of section]

Related GAO Products:

Medicare and Medicaid: Implementing State Demonstrations for Dual 
Eligibles Has Proven Challenging. GAO/HEHS-00-94. Washington, D.C.: 
August 18, 2000.

Low-Income Medicare Beneficiaries: Further Outreach and Administrative 
Simplification Could Increase Enrollment. GAO/HEHS-99-61. Washington, 
D.C.: April 9, 1999.

Medicare and Medicaid: Meeting Needs of Dual Eligibles Raises Difficult 
Cost and Care Issues. GAO/T-HEHS-97-119. Washington, D.C.: April 29, 
1997.

Medicare and Medicaid: Many Eligible People Not Enrolled in Qualified 
Medicare Beneficiary Program. GAO/HEHS-94-52. Washington, D.C.: 
January 20, 1994.

FOOTNOTES

[1] U.S. General Accounting Office, Low-Income Medicare Beneficiaries: 
Further Outreach and Administrative Simplification Could Increase 
Enrollment, GAO/HEHS-99-61, (Washington, D.C.: Apr. 9, 1999).

[2] See, for example, Kim Glaun, National Senior Citizens Law Center, 
Medicaid Programs to Assist Low-Income Medicare Beneficiaries: Medicare 
Savings Programs Case Study Findings, prepared for The Kaiser 
Commission on Medicaid and the Uninsured, December 2002; and Susan G. 
Haber et al, RTI International, Evaluation of Qualified Medicare 
Beneficiary (QMB) and Specified Low-Income Medicare Beneficiary (SLMB) 
Programs, prepared for the Centers for Medicare & Medicaid Services, 
October 1, 2003. 

[3] Medicare, Medicaid, and SCHIP Benefits Improvement and Protection 
Act of 2000 (BIPA), Pub. L. No. 106-554, App. F, § 911(a), 114 Stat. 
2763, 2763A-583 (adding section 1144 to the Social Security Act; 
codified at 42 U.S.C. § 1320b-14 (2000)).

[4] BIPA § 911(b), 114 Stat. 2763A-584.

[5] Throughout this report, we refer to all beneficiaries who were 
included in SSA's mailing as "recipients" because past SSA efforts 
found that only 1.5 percent of letters were returned as undeliverable.

[6] Throughout this report, we include the District of Columbia in our 
discussion of states. 

[7] The premium amount is adjusted each year so that expected Medicare 
premium revenues equal 25 percent of expected Medicare part B spending. 
42 U.S.C. § 1395r(a) (2000).

[8] Within broad federal guidelines, states have considerable 
flexibility in how they administer their Medicaid programs. States 
administer covered services under a state Medicaid plan that CMS 
approves. State Medicaid programs must cover certain mandatory 
services, such as physician services and nursing facility care. While 
Medicare covers some or all of up to 100 days of skilled nursing 
facility care following a hospitalization, Medicaid covers extended 
nursing facility care. State Medicaid programs may also cover certain 
CMS approved optional Medicaid services, such as prescription drugs. 
The federal government shares the cost of state Medicaid expenditures 
according to a statutory formula, whereby the federal share ranged from 
50 to 77 percent of state Medicaid expenditures in fiscal year 2003. 

[9] Section 1902(r)(2) of the Medicaid statute provides states 
flexibility to use less restrictive or liberalized methodologies than 
are typically used for Medicaid in counting applicants' income and 
resources to expand eligibility for the Medicare savings program.

[10] SSI provides cash assistance to aged, blind, and disabled 
individuals who have limited income and resources. In 2003, the 
resource limit was $2,000 for individuals and $3,000 for couples. SSI 
resource limits typically exclude the beneficiary's automobile and 
house. 

[11] These agreements are made under authority contained in 42 U.S.C. § 
1383c(a) (2000).

[12] Omnibus Consolidated and Emergency Supplemental Appropriations 
Act, 1999, Pub. L. No. 105-277, 112 Stat. 2681, 2681-383 (1998).

[13] AARP, formerly known as the American Association for Retired 
People, is an association representing individuals over the age of 50.

[14] For further information on the six models and the demonstration 
project results, see Lisa Maria B. Alecxih et al, Results from the SSA 
Buy-In Demonstration: Final Report, prepared by The Lewin Group SSA, 
October 4, 2001.

[15] 42 U.S.C. § 1320b-14(b) (2000).

[16] See CMS, FY 2004 GPRA Annual Performance Plan (Washington, D.C., 
2003).

[17] SSA officials stated that the mailings were based on the last two 
digits of the recipients' Social Security numbers, which are random and 
not based on any geographic, age, or other demographic characteristic. 
For each mailing, SSA's mail vendor selected approximately 207,000 
letters based on this sequence, and then sorted the letters by zip code 
before mailing them out.

[18] SSA elected to send this mailing only to individuals potentially 
eligible for the QMB, SLMB, and QI-1 programs. SSA did not have current 
income data needed to select potentially eligible QDWI individuals. The 
FPL for an individual in the 48 contiguous states was $8,860 in 2002. 
For a couple, the FPL was $11,940. The FPL is higher in Alaska and 
Hawaii. 

[19] Letters were sent in either English or Spanish based on the 
language preference provided to SSA in the past.

[20] The QDWI letters were timed by SSA to arrive near the general 
enrollment period for Medicare part A, which runs from January 1 
through March 31 each year.

[21] SSA's security protocol requires states to provide certain 
information in order for SSA to send the data files. Six states did not 
provide this information and therefore SSA did not send the data file 
to them.

[22] 42 U.S.C. § 1320b-14(b)(1)(B) (2000).

[23] For example, individuals who did not previously receive an 
outreach letter may subsequently meet the income criteria due to 
reduced income from the death of a spouse.

[24] Thus, over a period of 5 years, SSA will resend letters to all 
2002 letter recipients who still meet the mailing criteria but have not 
enrolled in Medicare savings programs.

[25] Persons with disabilities are persons of any age who are unable to 
do any kind of substantial gainful activity because of a physical or 
mental impairment (or a combination of impairments) that has lasted or 
is expected to last for a continuous period of at least 12 months, or 
that is expected to result in death. 42 U.S.C. § 416(i)(1)(A) (2000).

[26] After December 2002, additional enrollment among the baseline 
group began increasing faster than the May cohort, indicating that the 
maximum cumulative effect of the 2002 SSA mailing for the May cohort 
relative to the baseline occurred as of December 2002.

[27] The CMS data showing about a 341,000 increase in Medicare savings 
program enrollment from May 2002 to May 2003 represents the net change 
in enrollment including both increases (due to new enrollees) as well 
as decreases (due to former program enrollees who died or otherwise 
were no longer enrolled). Our analysis of the SSA MBR data, estimating 
an increase in enrollment following the SSA mailing of about 386,000 
beneficiaries, reflects only new enrollees because the SSA letter went 
only to those beneficiaries not enrolled in Medicare savings programs 
at the time.

[28] We calculated age as of May 10, 2002, the first date of the SSA 
mailing, using the beneficiary's date of birth. 

[29] See Lisa Maria B. Alecxih et al, Results from the SSA Buy-In 
Demonstration: Final Report.

[30] California officials also reported that Medicare health 
maintenance organizations in California provided outreach through 
private contractors approved by CMS.

[31] The MBR contains records for Social Security beneficiaries who 
were entitled to receive benefits under the Old-Age, Survivors and 
Disability Insurance program. SSA provided us with certain records from 
the MBR that included demographic information as well as Medicare 
benefit payments.

[32] For Medicare beneficiaries who elect to participate in Medicare 
part B, SSA typically withholds an amount equal to their Medicare part 
B premium from their monthly Social Security checks.

[33] Mailing dates for the May cohort include those from May 10 through 
May 22, 2002, and for the November cohort include mailing dates from 
October 28 through November 8, 2002.

[34] MBR data show third-party payments from three sources--a state, a 
private payer, or federal civil service.

[35] When a Medicare beneficiary enrolls in a Medicare savings program, 
the Medicare part B premium is no longer deducted from the 
beneficiary's Social Security check but is instead paid by the state.

[36] Our data for both cohorts did not include beneficiaries 
potentially eligible for QI-2 or the 53,000 beneficiaries who were sent 
a November 2002 SSA mailing about potential eligibility for the 
separate QDWI program.

[37] Our analysis may not include potential beneficiaries in the May 
cohort who significantly delayed presenting a Medicare savings program 
application to state Medicaid offices for eligibility screening or 
those whose applications were in the eligibility determination process 
after December 2002. In addition, some letter recipients in the 
November cohort may have enrolled prior to receiving the letter because 
they learned about the programs from others, such as neighbors or 
relatives, who already received the mailing. 

[38] The third-party master file contains records for Medicare 
beneficiaries for whom a third party, such as a state welfare agency or 
a private group payer, pays their Medicare part A or B premiums. SSA's 
field offices, state welfare agencies, private groups, and the Office 
of Personnel Management collect the information and send it to CMS for 
monthly updates. CMS uses these data to track enrollment and bill 
states and other groups accordingly.

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