States will receive varying shares of a $30 million federal grant to provide local health insurance counseling for Medicare beneficiaries, the Centers for Medicare & Medicaid Services has announced.
CMS announced the funding this week as part of the State Health Insurance Assistance Programs, or SHIPs. Enacted in 1990 under the Budget Reconciliation Act, SHIPs manage counseling efforts in all 50 states, the District of Columbia, Puerto Rico, Guam and the U.S. Virgin Islands.
State agencies, volunteer groups, state insurance departments and agencies on aging are among the organizations that provide counseling under SHIP. Counselors will educate seniors on insurance coverage options, including Medigap, Medicare Advantage, prescription drug coverage and long-term care financing.
"CMS continues to value the important role that SHIPs play in educating beneficiaries about Medicare," said CMS Acting Administrator Leslie Norwalk. "With these 2007 grant awards, SHIPs are expected to continue to achieve measurable accomplishments that support beneficiaries in local communities." Funding for SHIPs has more than doubled since 2003, Norwalk added.
Payments to states, which have been announced, are awarded in two stages. Initially, all 50 states and Puerto Rico receive $75,000, while Guam and the Virgin Islands each receive $25,000. A variable sum then is calculated for each state, based on factors such as total population and Medicare population.
Under this formula, California will receive $2.5 million, the largest total SHIP grant awarded this year. Most smaller states will receive $150,000 to $750,000. The majority of states will receive more funding in 2007 than in 2006, although a few will get the same amount.
Recent research supports the need for better information and guidance for seniors on Medicare coverage. For example, a study by the Commonwealth Fund and the Kaiser Family Foundation uncovered a significant lack of discussions between seniors and their physicians on issues pertaining to prescription drugs. Some 40 percent of seniors surveyed said they don't follow their doctors' orders on prescription drugs. In that group, 39 percent never discussed financial matters with a physician, the report said. In most cases, lower-cost drug plans or prescriptions were available.
Another study, by the Center for Studying Health System Change, found great variation in costs for the same prescription drugs offered in various states' lowest-cost Medicare drug plans. The study also found that drug costs for two beneficiaries in the same state can vary by as much as $10,000, depending on which plans seniors choose.