Date: August 4th, 2016
In an era of increasing constraints on federal budgets, the Senate Appropriations Committee voted in June to approve a Labor, Health and Human Services, and Education Appropriations (Labor-HHS) bill that would effectively eliminate the Medicare State Health Insurance Program (SHIP), which provides in-person and over-the-phone Medicare counseling to seniors and people with disabilities.
While there is much to like in the Senate’s version of the appropriations bill, such as the expansion of funding to the National Institutes of Health (NIH) that includes a $400 million increase to study Alzheimer’s disease, a $100 million increase for the Precision Medicine Initiative, and $126 million in additional funding to address the opioid epidemic, the committee’s decisions to defund the SHIP program is perplexing. The $52.1 million program is not an example of federal waste, but instead a vital and trusted resource Medicare beneficiaries use to navigate the program. Last year, an estimated seven million Medicare customers sought SHIP services because the information provided to them through other channels was inadequate. Eliminating the program will leave millions of soon-to-be and existing Medicare beneficiaries without the information to make informed decisions in the oft-confusing realm of federal health insurance.
The $52.1 million in funding allocated to SHIP allows the program to operate offices in all 50 states, Washington D.C., Guam, Puerto Rico, and the Virgin Islands. The majority of these offices are run by State Units on Aging, established under the Older Americans Act. These state offices allow seniors to have face-to-face consultations with one of over 15,000 trained counselors. The high-quality advice provided to Medicare beneficiaries during these meetings cannot be fully replaced by online materials or telecommunications outreach. The needs and questions of beneficiaries can be so complex that it necessitates a face-to-face encounter. A key reason SHIP exists is because beneficiaries were not able to find the information they were looking for elsewhere.
It is estimated that 10,000 Americans become eligible for Medicare each day. This means that thousands of people daily are seeking counsel to make some of the most important decisions of their post-retirement lives. This is no simple task. Many of these new beneficiaries are ill-prepared to make the multitude of important health care decisions required when enrolling into the program. Some questions new beneficiaries need to answer are whether they are eligible for or need Medicare Part A and Part B. They must choose between traditional Medicare or Medicare Advantage plans. They must navigate provider networks and prescription drug plans. They must determine whether to enroll in a Medigap supplemental plan. The answers to these questions are rarely obvious.
For longtime beneficiaries already familiar with the particulars of the program, there is a host of other issues that SHIP helps resolve, such as responding to coverage denials, billing problems, and issues of fraud and abuse. The SHIP program places significant resources into outreach to beneficiaries with low incomes and mental disabilities. Without this program, many beneficiaries would be overlooked and not receive subsidies that make their health care affordable. In 2015, SHIP provided counseling to 1.3 million beneficiaries with incomes 150 percent or more below the Federal Poverty Line.
The reason the SHIP program exists is because Medicare can be confusing. For example, there are over 20 prescription drug plans and 19 Medicare Advantage plans. Can it be reasonably expected that seniors and the mentally disabled will read and grasp the terms and policies in each of these plans and then make the best decision for their situation? Understanding these technical documents requires a professional, which is what the program offers to seniors. According to a 2013 survey of SHIP offices, counselors receive an average of 20.5 hours of preliminary training. Then, due to the growing complexity of health insurance options available to beneficiaries, they must go through ongoing training. CMS requires that SHIP offices regularly demonstrate the competency of their staff to ensure that beneficiaries are receiving the most up-to-date and accurate information. It would be shameful if all of this information was lost because the program went unfunded in FY 2017.
The fate of SHIP will be decided by Congress this fall. It is fortunate that the House Labor-HHS Subcommittee voted to maintain the program at its current funding level. However, the conversation surrounding SHIP should not be whether the program deserves to be stricken from the federal budget, but rather the degree to which the program should be expanded.
Earlier in July, the National Council on Aging (NCOA) submitted a letter to the House Appropriations Committee urging a modest increase in funding to $59.4 million in FY 2017. The differences between the Senate and House version of the Labor-HHS appropriations bills are expected to be resolved when Congress returns in the fall.
Those concerned about the future of the program should contact their representative and senator, remind them of the importance of the program, and request the highest level of funding possible for SHIP in the final appropriations bill. Medicare beneficiaries deserve to have the option of meeting a trained expert face-to-face so they can receive unbiased and personalized consultation.