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A Program Helping 7 Million Seniors Save Money Is About to Get the Axe

Would you call a U.S. program that helps 7 million seniors save money on Medicare annually "unnecessary"?

Probably not. But a network of more than 3,300 free Medicare counseling services could lose its $52 million in federal funding due to budget cuts. The State Health Insurance Assistance Program (SHIP) is on a list of more than a dozen programs lined up to get the axe from the Senate Appropriations Committee.

"Duplicitous or unnecessary," said U.S. Senator Roy Blunt, explaining the rationale. The Missouri Republican probably meant "duplicative" there, but never mind. He is wrong either way. This is one SHIP that definitely should be kept afloat.

Navigating the Medicare program is complicated — more complicated than it needs to be. Over the years, Congress has added coverage options built around marketplaces offering commercial plans. The typical senior selecting a Part D prescription drug plan must choose between an average of more than 20 choices, according to the Medicare Rights Center (MRC). Those who opt for a Medicare Advantage plan must choose from an average of 19 possible prescription drug plans.

That approach is driven mainly by conservative ideology, which holds that the private market can deliver superior efficiency and products. But there is precious little evidence that this approach works in healthcare. Independent studies have shown repeatedly that Medicare enrollees waste money by over-insuring themselves in the Part D program.

A new analysis of hospital networks in the Medicare Advantage program by the Kaiser Family Foundation (KFF) finds spotty participation by hospitals in plans, and that shopping for a plan with a specific hospital in network "can be tough for consumers." The study also finds that some plans lack access to the highest quality academic medical centers.

Adding insult to injury, the powerful Senate Appropriations Committee recently voted to end funding for SHIPs, which help seniors navigate these messy options. SHIPs operate in all 50 states, plus Puerto Rico, Guam, the District of Columbia and the U.S. Virgin Islands. The local SHIPs have more than 14,500 counselors - 57 percent of whom are highly trained volunteers, according to MRC. (Find your local SHIP here,)

Tough decisions

Medicare offers an annual enrollment period during which beneficiaries can shop for new prescription drug or Medicare Advantage plans. During last year's autumn enrollment period (Oct. 15 to Dec. 7), SHIPs helped nearly 1.1 million seniors, according to MRC data.

Very few enrollees bother to re-shop their coverage annually, but they should. Insurance companies often change their offerings year-to-year in ways that can increase drug costs, or make it more difficult to obtain certain drugs. At the same time, a senior's drug needs may have changed since the last plan selection period in ways that make a plan less beneficial.

A study by the Kaiser Family Foundation found that, on average, just 13 percent of enrollees voluntarily switched their drug or Medicare Advantage plans - but that nearly half of those who did switch plans saved at least 5 percent the following year, mainly on premiums.

SHIPs also helped nearly 1.3 million low-income seniors with Medicare enrollment last year, according to MRC. Much of that work was focused on options to save money on premiums, such as Extra Help, which often covers up to 75 percent of prescription drug costs (http://reut.rs/1OXKZ9b). About 1.2 million low-income beneficiaries who qualified for Extra Help were enrolled in higher-cost Part D plans last year, according to KFF - a sure sign that greater outreach and assistance is needed.

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SHIPs also help with enrollment in Medigap plans, which help cover gaps in traditional Medicare such as copayments, coinsurance and deductibles. They also can help seniors make sure they enroll on time, avoiding costly late enrollment penalties.

The budget cuts approved by the Senate Appropriations Committee were part of a broader move to increase funding in some areas where dollars are needed. All told, $2 billion would be shifted to the National Institutes of Health, and used to restore year-round Pell Grants for college students, and to increase resources to prevent and treat opioid abuse.

"Our understanding is that some tough decisions were made," said Stacy Sanders, federal policy director at MRC. "It's the product of a tight budget environment."

SHIP funding actually has declined against inflation - spending for fiscal 2017 would be just over $66 million if it had kept up with inflation, according to the National Council on Aging.

A vote by the Senate is not expected until this fall, and the House of Representatives has yet to weigh in. Here is hoping that Congress can somehow right the SHIP.

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