title: Who will be denied Medicare prescription drug subsidies because of the asset test?
abstract: OBJECTIVE
  To determine the number and characteristics of Medicare beneficiaries who will be excluded from low-income prescription drug subsidies because they do not qualify under an asset test.
  
  
  METHODS
  Cross-sectional, using the US Census Bureau's Survey of Income and Program Participation (SIPP); results were based on interviews occurring between October 2002 and January 2003. The sample included 9278 Medicare beneficiaries, 2929 with incomes below 150% of the federal poverty level (FPL).
  
  
  METHODS
  Using SIPP, each sample member's income was compared to the FPL. Income was adjusted to include only liquid assets and primary residences. The number of individuals excluded by the asset test and their characteristics and types of assets responsible were calculated.
  
  
  RESULTS
  Of 13.97 million noninstitutionalized Medicare beneficiaries, 2.37 million (17%) with low incomes would be excluded from subsidized drug coverage due to the asset test. Compared to higher-income beneficiaries, the excluded individuals tended to be older, female, widowed, and living alone. Almost half of their assets were checking and savings accounts. Half of the individuals failing the test had assets less than 35,000 dollars above the allowing thresholds.
  
  
  CONCLUSIONS
  Widows are disproportionately affected by the asset test. When a husband dies, income plummets but accumulated assets often exceed those allowed under Medicare legislation. During their working years Americans are encouraged to save for retirement, but by accumulating modest amounts of assets, these same people often will then not qualify for low-income drug subsidies. Modifying or eliminating the asset test would help protect individuals disadvantaged by low incomes who have modest amounts of asset holdings.
authors.affiliation: Department of Health Services, UCLA School of Public Health, 90095-1772, USA. trice@ucla.edu
authors.forename: Thomas
authors.initials: T
authors.lastname: Rice
authors.forename: Katherine
authors.initials: K
authors.lastname: Desmond
mesh_terms: D000368:Aged; D000369:Aged, 80 and over; D019352:Censuses; D003430:Cross-Sectional Studies; D003669:Deductibles and Coinsurance / Q000191:economics / Q000331:legislation & jurisprudence; D016527:Drug Costs / Q000331:legislation & jurisprudence / Q000706:statistics & numerical data; D011307:Drug Prescriptions / Q000191:economics*; D004608:Eligibility Determination / Q000458:organization & administration*; D005260:Female; D005380:Financing, Government / Q000191:economics / Q000331:legislation & jurisprudence; D005382:Financing, Personal / Q000191:economics / Q000331:legislation & jurisprudence; D006302:Health Services Research; D006801:Humans; D007182:Income / Q000706:statistics & numerical data; D007342:Insurance Benefits / Q000191:economics / Q000331:legislation & jurisprudence; D007345:Insurance Claim Review / Q000458:organization & administration*; D007356:Insurance, Pharmaceutical Services / Q000191:economics* / Q000331:legislation & jurisprudence; D008297:Male; D006278:Medicare / Q000191:economics* / Q000331:legislation & jurisprudence; D008875:Middle Aged; D011203:Poverty / Q000191:economics* / Q000331:legislation & jurisprudence; D012179:Retirement / Q000191:economics; D011795:Surveys and Questionnaires; D014481:United States