Academic journal article Social Security Bulletin

Using Matched Survey and Administrative Data to Estimate Eligibility for the Medicare Part D Low-Income Subsidy Program

Academic journal article Social Security Bulletin

Using Matched Survey and Administrative Data to Estimate Eligibility for the Medicare Part D Low-Income Subsidy Program

Article excerpt

This article uses matched survey and administrative data to estimate, as of 2006, the size of the population eligible for the Low-Income Subsidy (LIS), which was designed to provide "extra help" with premiums, deductibles, and copayments for Medicare Part D beneficiaries with low income and limited assets. We employ individual-level data from the Survey of Income and Program Participation and the Health and Retirement Study to cover the potentially LIS-eligible noninstitutionalized and institutionalized populations of all ages. The survey data are matched to Social Security administrative data to improve on potentially error-ridden survey measures of income and program participation. Our baseline estimate, based on the matched data, is that about 12 million individuals were potentially eligible for the LIS as of 2006. A sensitivity analysis indicates that the use of administrative data has a relatively small effect on the estimates, but does suggest that measurement error is important to account for.

Introduction

The 2003 Medicare Prescription Drug Improvement and Modernization Act added a new prescription drug benefit to the Medicare program known as Part D (prescription drug coverage) as well as the Low-Income Subsidy (LIS) program to provide "extra help" with premiums, deductibles, and copayments for Medicare Part D beneficiaries with low income and limited assets. Although Medicare Part D is administered by the Centers for Medicare and Medicaid Services (CMS), the Social Security Administration (SSA) is responsible for administering the LIS, including outreach, processing applications, determining eligibility, and adjudicating appeals.

As part of a study conducted for SSA, reported more fully in Meijer, Karoly, and Michaud (2009), we aimed to estimate the size of the LIS-eligible population as of 2006.1 Such an estimate can be used to determine an upper bound on the number of program participants and to estimate take-up rates based on actual participation. In this article, our estimation approach is featured, which employs survey data matched to administrative data in order to provide the best available estimate. One of the goals of this article, relative to the larger study on which it is based, is to highlight the ability to use matched survey/administrative data for this type of analysis and to report the sensitivity of our results compared with using only survey data.

As shown in Chart 1, as of 2006 when the Medicare Part D program went into effect, eligibility for the LIS first required enrollment in Medicare Part D. However, we focus on generating an estimate that captures the potentially LIS-eligible population because we count as eligible those individuals who are not enrolled in Medicare Part D, but are otherwise eligible for the LIS, even though Part D enrollment is a prerequisite to LIS eligibility. In addition, consistent with the eligibility rules shown in Chart 1, we distinguish between (1) automatic eligibility for the LIS, which affects those persons who are potentially eligible for the full LIS because they are enrolled in the Supplemental Security Income (SSI) program, in Medicaid (dual-eligibles), or in a Medicare Savings program and (2) nonautomatic eligibility for the LIS, which affects those persons who qualify for a full or partial subsidy based only on meeting income and resource (asset) criteria (known as direct eligibility).

To achieve our objective, the ideal data source would provide information on the Medicare population, which includes the noninstitutionalized and institutionalized populations (the latter includes those in nursing homes) and includes both those eligible because they are aged 65 or older as well as those younger than age 65 who are eligible for Medicare because they have a qualifying disability. The data source would have information on participation in the programs that confer automatic eligibility (for example, SSI, Medicaid, Medicare Savings programs) as well as information to determine direct eligibility (measures of income and resources that match those used in the eligibility determination process). …

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