SSA Continues to Approve Applications and Improve Processing Efforts and Has Improved Some Measures for Processing Benefits

SSA continues to approve low-income subsidy applications; of the  applicants who were denied benefits, most exceeded income limits and  others exceeded resource limits. To monitor its progress in implementing  and administering the subsidy benefit, SSA has collected key data and  established some goals. Excess Income Was the Predominant Reason That Applicants Were Denied the Subsidy in Fiscal Year 2007

Of the approximately 7.2 million applicants filing for the subsidy as of  March 2008, SSA approved 2.8 million. Table 2 shows the extent to which applicants were denied subsidy  eligibility because their income was too high. No Reliable Data Are Available to Identify Eligible Population for Outreach Efforts, and Millions May Have Not Yet Applied

No reliable data are available to help SSA identify the eligible population  for its outreach efforts, and millions who may be eligible have not yet  applied, in part due to privacy concerns and application complexity. SSA is  working with the Internal Revenue Service (IRS) to determine whether tax  data can help target individuals eligible for the subsidy. While SSA agreed with the recommendation in  theory, it maintains that it would be unable to implement specific goals  and measures due to the lack of reliable data on the eligible population. Several barriers may prevent potentially eligible Medicare beneficiaries  from applying for the subsidy. A  2007  Mathematica study conducted for AARP, also found that reluctance to  share personal financial information, the stigma associated with applying  for public benefits, and inadequate availability of one-on-one assistance  for completing the subsidy application, and resource limits affected  individuals’ decision not to apply for the subsidy. SSA Initially Conducted Focused Outreach Efforts, But Now Incorporates Such Efforts into Overall Social Security Outreach

From the outset of the low-income subsidy program, SSA conducted a  broad outreach campaign to inform as many potentially eligible people as  possible about the subsidy and how to apply for it. SSA conducted its  initial outreach campaign from May 2005 to August 2006. Recent staffing reductions in field offices may have left SSA with limited  resources to assist individuals with the subsidy and conduct local  outreach efforts. CMS and CBO estimate, respectively, that about 2.6 million to over 4  million individuals who may be eligible for the subsidy are still not  receiving the benefit. The IRS and SSA study may help  determine if tax data could help identify individuals who may qualify for  the subsidy and target outreach efforts. Medicare: Communications to Beneficiaries on the Prescription Drug  Benefit Could Be Improved. Social Security Administration: Medicare Part D Subsidies. Retiree Health Benefits: Options for Employment-Based Prescription  Drug Benefits under the Medicare Modernization Act.
Why GAO Did This Study

To help the elderly and disabled with prescription drug costs, the Congress passed the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA), which created a voluntary outpatient prescription drug benefit (Medicare Part D). A key element of the prescription drug benefit is the low-income subsidy, or "extra help," available to Medicare beneficiaries with limited income and resources to assist them in paying their premiums and other out-of-pocket costs. To assess the Social Security Administration's (SSA) implementation of the subsidy, GAO is providing information on (1) the number of applicants approved for or denied the low-income subsidy and (2) challenges of identifying individuals eligible for the subsidy and targeting outreach efforts. This statement is based on a prior GAO report on the subsidy and associated spending issued in May 2007, selected aspects of which we updated in May 2008.

What GAO Found

Of the approximately 7.2 million applicants for the low-income subsidy, SSA approved approximately 2.8 million as of March 2008, and SSA has improved some key measures for its subsidy application processes. SSA approved about 570,000 applicants, denied about 403,000 applicants, and determined that no decision was required for about 281,000 applicants in fiscal year 2007. Excess income was the primary reason applicants were denied benefits, while many other applicants were denied benefits because their resources exceeded program limits. Further, SSA has collected data and established some goals to monitor its progress in implementing and administering the subsidy benefit. No reliable data are available to help SSA identify the eligible population for its outreach efforts, and millions who may be eligible have not yet applied. SSA maintains that it would not be able to establish specific goals and measures for its outreach activities, as we recommended in our May 2007 report because, of the lack of reliable data on the total eligible population. Responding to another of our recommendations, SSA is working with the Internal Revenue Service to determine if tax data can help target individuals eligible for the subsidy. The Centers for Medicare & Medicaid Services and the Congressional Budget Office have estimated, respectively, that about 2.6 million to over 4 million individuals who may qualify for the subsidy are not receiving it. Various barriers, such as reluctance to disclose personal financial information or lack of knowledge of the subsidy, may prevent potentially eligible Medicare beneficiaries from applying for the subsidy. To solicit applications from individuals potentially eligible for the subsidy, SSA conducted an extensive outreach campaign from May 2005 to August 2006, but has decreased its outreach activities since then. Staffing constraints in SSA field offices may also limit SSA's ability to assist individuals with the subsidy and conduct local outreach to inform the public about the subsidy.