THE MEDICARE-ENDORSED DISCOUNT DRUG CARD, TRANSITIONAL ASSISTANCE
AND OTHER FEDERAL PROGRAMS:
HOW TO COUNT THE $600 CREDIT
Medicare Act of 2003, which authorized the Medicareendorsed Prescription Drug
Discount Card and a $600 per year credit (called Transitional Assistance, or TA)
for low-income beneficiaries, includes a provision stating that discounted
prices and TA should not affect an individual’s eligibility for, or
the amount of, benefits from other federal programs.
little more than a week ago, the Centers for Medicare and Medicaid Services
(CMS) interpreted this provision to prohibit the Food Stamp program, run by the
U.S. Department of Agriculture (USDA), from reducing the amount of food stamps
an individual would receive because of a change in that individual’s medical
expense deduction for calculating the food stamp benefit.
That is to say, if your medical expenses prior to receiving TA were
$200/month in prescription drugs and your $600 TA credit now pays for most of
that $200, you still can deduct the full $200.
Thus, you get the full value of the TA without any corresponding offset
or reduction in other benefits. This
seems to be what Congress intended in the Medicare Act.
than ten federal assistance programs for low-income individuals include a
medical expenses deduction similar to that of the Food Stamp program.
CMS’s interpretation with respect to food stamps should apply to all
those programs, including the “Medically Needy” portion of the Medicaid
CMS, however, has
taken a different position with respect to the Medically Needy “spend down”
for Medicaid eligibility. (See CMA
Weekly Alert of June 3, 2004). In
a Question & Answer section on the Medicare agency’s website (in response
to the question of whether the $600 can be deducted as an incurred medical
expense when determining the amount an individual’s spend down amount) CMS
says that medical expenses can be deducted only when the person pays for or
incurs the expense and is not reimbursed (except from a public program of the
State or a political subdivision). Since
the $600 is a Federal subsidy, says CMS, the individual does not incur an
expense and so it cannot be deducted. This Q&A was last updated June 9, 2004,
and is available for viewing at: http://questions.cms.hhs.gov/cgi-bin/cmshhs.cfg/php/enduser/std_adp.php?p_faqid=2923&p_created=1086628848.
is apparently revisiting this question, in light of its guidance to USDA. A
different Q&A document, also on the CMS website, announces that, as of June
15, 2004, its policy with respect to medically needy spend down and transitional
assistance “is currently under review.”
would like to see CMS issue clear directions to all affected federal programs
that concur with its recent guidance to USDA. The CMS directions should be
consistent and should accord with the Congressional intent not to allow
the new Medicare Discount Drug Card to affect other federal program benefits.
tuned for further developments.
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