SHIP Funding 2008

Timeline of Events

As law, it will provide an additional $7.5 million for Fiscal Year 2009 to CMS for the purpose of grants to SHIPs, a portion of which must be used to reach out to potentially eligible LIS and MSP (Medicare Savings Programs) beneficiaries. Area Agencies on Aging (AAAs) also received an additional $7.5 million for the same purpose.

Other provisions within the bill include:

• Improvements to low-income benefits:
  • Raises asset limits for Medicare Savings Programs from the current $4,000 per individual/$6,000 per couple to $7790/$12440 (the Part D LIS full subsidy levels), drops life insurance and in-kind support dropped as a countable assets, and indexes the asset limits to inflation
  • Simplifies the Part D Low-Income Subsidy application (SSA)
  • Reauthorizes Qualified Individual (QI) program
• Adds preventive benefits to Medicare
• Reduces cost-sharing for mental health services 
• Blocks a scheduled 10% cut in physician payments, includes a 1.1 percent increase in payments for 2009
• Reforms some Medicare Advantage payments to limit payments to private plans that are being paid more than 100 percent of the cost to treat a beneficiary in Original Medicare by: 
  • Ensuring Private Fee-for-Service (PFFS) plans comply with quality requirements that other Medicare Advantage plans must meet and ensuring beneficiaries in PFFS plans have adequate access to providers.
  • Phasing out the Indirect Medical Education (IME) double-payment
  • Eliminating the Medicare Advantage reserve fund, which is a fund that the Secretary may use to further increase payments to private plans 
• Outlines new prohibitions and limitations on marketing activities under Medicare Advantage and prescription drug plans
• Postpones competitive bidding on Durable Medical Equipment (DME)

Visit HAP’s What’s HAPpening Center for a summary of the political process leading up to this new law.

06/09/08: CMS to Distribute the Second of Three Installments in SHIP Funding
In addition to the basic SHIP grant distributed in April, CMS distributed an additional $15 million to the SHIPs, which can be used for basic infrastructure improvements, such as technology tools and training enhancements, and low-income subsidy (LIS) targeting and outreach.

02/15/08: CMS Announces Plan to Distribute $15 million in additional SHIP funding
Half of the funds-$7.5 million-allocated by Congress in December 2007 will be distributed in 2008 according to the SHIP Basic Grant formula, which is a fixed amount per state based on demographic factors (i.e. number of Medicare beneficiaries and rural distribution). The remaining $7.5 million will be distributed based on a prorated estimate of potentially eligible LIS beneficiaries in each state.

SHIPs are required to apply for the additional funding by submitting a proposal and budget to CMS by April 1, 2008. CMS will provide separate instructions on the application process. The money should be used to identify and educate beneficiaries who may be eligible for the Low-Income Subsidy (LIS), and to assist with the application process. Funds may also be used to invest in infrastructure development, such as technology tools and training enhancements.

12/29/07: President Signs the Medicare, Medicaid and SCHIP Extension Act of 2007
This act provides $15 million to SHIPs for the 2008 fiscal year.

12/26/07: President Signs the Omnibus Appropriations Act
This act contains $39.3 million for SHIPs in FY08, which is an $8.3 million increase over $31 million allocation for fiscal year 2006.

12/20/07: Congress Increases Ship Funding by 75% in 2008
In two separate bills, Congress increased funding for SHIPs for Fiscal Year 2008 by 75% for a total of $54.3 million. President Bush is expected to sign both bills.

The Omnibus Appropriations Act, which funds the federal government, contains $39.3 million for SHIPs in FY08. That is an $8.3 million increase over last year's $31 million allocation. President Bush is expected to sign the bill in order to prevent a shut-down of the federal government, since the authorization that funds government operations expires on December 31. HAP has posted a summary of funding provisions for aging programs.

A second bill, the Medicare, Medicaid and SCHIP Extension Act of 2007 provides $15 million to State Health Insurance Assistance Programs (SHIPs) for FY08, and a total of $5 million for Area Agencies on Aging and Aging and Disability Resource Centers for FY08 and FY09. It contains language that will provide additional funds to SHIPS, Area Agencies on Aging, and Aging and Disability Resource Centers for Medicare outreach and enrollment.  The additional $15 million for SHIPs is to be expended by September 30, 2008.

11/14/07: Two Bills in Congress Highlight the Critical Role SHIPs Play

H.R. 3162: Also known as Children's Health and Medicare Protection (CHAMP) mandates $55 million for SHIPs beginning in 2009 and increases that amount annually in increments of $10 million. If passed, this bill would also make SHIP funding mandatory, currently SHIP funding is discretionary and must be debated and authorized each year. 

The Senate is currently working on its version of Medicare protection legislation, and it is likely that a provision for increased and mandated SHIP funding will be included.

H.R. 3043: H.R. 3043 funds the Departments of Labor, Health and Human Services, and Education. Both the House and Senate have passed H.R. 3043 which includes increasing SHIP funding to $45 million in 2008, a $14 million increase over 2007 funding.

• President Bush vetoed H.R. 3043 on November 13, 2007. 
• On November 15, the House was two votes shy of overriding the President’s veto.
• Congressional leaders are working with President Bush on a compromise.

U.S. House of Representatives Mandates Annual Increases in SHIP Funding

On August 1, 2007 the U.S. House of Representatives passed the Children's Health and Medicare Protection Act, HR. 3162. If enacted, the law would expand health insurance coverage to all children whose families cannot afford health insurance. The bill also contains a number of Medicare provisions, including mandating that in 2009 CMS fund SHIP in the amount of $55 million and that for all subsequent years SHIP funding be increased by at least $10 million (i.e. $65 million in 2010, $75 million in 2011, etc.). If enacted, this provision would supersede CMS’ current discretionary funding of SHIP. On August 2, 2007 the Senate  passed its version of the CHAMP bill, which unfortunately does not include any Medicare provisions, including those related to SHIP funding. The differences in the House and Senate bills will be negotiated and resolved by a conference committee consisting of House and Senate members (called conferees). HAP will provide SHIPs with the conferees’ names and contact information when they are appointed. SHIPs are in the best position to speak to Congress about the importance of increased and sustainable funding in order to continue helping Medicare beneficiaries, and we encourage you to send a message to the conferees to ask that the final bill contain all of the House’s Medicare provisions, including mandatory SHIP funding with yearly increases.

U.S. House of Representatives Approves $45 Million for SHIPs in 2008

A concerted effort by HAP, its parent agency Families USA, SHIPs, and SHIP partners has paid off. On July 19 the House of Representatives passed an appropriations bill that funds the federal Health and Human Services Department. Accompanying the bill is Committee report language that recommends CMS fund SHIPs in 2008 at $45 million. In support of the recommendation that CMS increase SHIP funding, the Committee report states that, "SHIP is an important vehicle to help the nearly 45 million Medicare beneficiaries grapple with changes in coverage and prescription drug plans. SHIP provides one-on-one counseling to those who have trouble accessing the internet or the toll-free hotlines."

The members of the Labor-Health and Human Services House Appropriations Committee are responsible for the recommended increase in SHIP funding. If a Committee member is from your state, we encourage you to send your thanks to the member for supporting increased SHIP funding. In the Senate, the Labor-HHS bill has only made it through the Senate Appropriations Committee and has not yet reached the Senate Floor for a vote. The Senate Committee is recommending that not less than $35 million be made available for SHIP.  The Senate will most likely pass the Labor-HHS appropriation with the $35 million recommendation. At that point, the differences in the House and Senate bills will be negotiated and resolved by a conference committee consisting of House and Senate members (called conferees). When the conferees are appointed, HAP will provide SHIPs with their names and contact information and a suggested message to be communicated to the conferees.

For more detailed information about the House and Senate actions regarding SHIP funding please click here.

CMS 2007-2008 Funding for SHIPs Announced

CMS announced its continued funding for Medicare counseling through the State Health Insurance Assistance Programs (SHIP) on April 11, 2007. CMS provides grants to all 50 states, the District of Columbia, Puerto Rico, Guam, and the U.S. Virgin Islands. Each state receives a share of $30 million in grant funds, which are also allocated to Area Agencies on Aging and the Native American Aging Programs, to help bring personal assistance to Medicare beneficiaries at the local level.

SHIP grants are calculated in two parts:

• The initial grant is distributed as a fixed award of $75,000 (although just $25,000 to Guam and the Virgin Islands) to each of the applicants.
  
• The second portion is a variable sum based on the percentage of nationwide Medicare beneficiaries who live in the state, the proportion of the state's Medicare beneficiaries to the total state population, and the proportion of the state's Medicare beneficiaries who live in rural areas. In a press release, CMS acknowledges SHIP programs as a key part of Medicare's education and outreach efforts to educate beneficiaries about health insurance coverage, the Medigap and Medicare Advantage options, along with Medicare prescription drug coverage, and long-term care financing.

Families USA presents testimony at a Hearing on Health Care Access and the Aging of America

On February 15, 2007 the Executive Director of Families USA, Ron Pollack, testified before the Subcommittee on Labor, Health and Human Services, Education and Related Services of the House Appropriations Committee at the Hearing on Health Care Access and the Aging of America. Highlights included the role of SHIPs in helping seniors navigate the increasingly complex Medicare program and the need for increased funding for the SHIP network.

HAP presents testimony before Senate Special Committee on Aging

On January 31, 2007 HAP’s Executive Director, Ellen Leitzer, highlighted the tremendous value of SHIPs to Medicare beneficiaries across the country and urged Committee Members to advocate for increased funding for the SHIP network in 2007 and future years.