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The 2003 Medicare Prescription Drug Improvement and Modernization Act (Pub. L. No. 108-173) 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. This analysis was designed to provide an independent estimate of the LIS-eligible population as of 2006, to examine the robustness of the estimate against alternative assumptions and estimation methods, to examine the characteristics of the LIS-eligible population, and to project the size of the LIS-eligible population to 2008. An estimated 12 million persons, or 29 percent of Medicare beneficiaries, were potentially eligible for the LIS in 2006 and most were eligible for the full subsidy. The eligibility rate is higher for the under-age-65 population and for those in nursing homes. There is considerable uncertainty around the estimated number of LIS eligibles, however, due to differences in the two main data sources employed, the Survey of Income and Program Participation and the Health and Retirement Study.

Table of Contents

  • Chapter One


  • Chapter Two


  • Chapter Three

    Estimates of Medicare Part D LIS Eligibility

  • Chapter Four


  • Appendix A

    Analysis of Attrition, Nonresponse, and Selective Matching

  • Appendix B

    Medicaid/Medicare Savings Model

  • Appendix C

    Eligibility Regulations

  • Appendix D

    Methods for Eligibility Determination

  • Appendix E

    Comparison of Countable Income and Resource Distributions in the SIPP and the HRS

  • Appendix F

    LIS Eligibility Status by Population Group

The research described in this report was sponsored by the Social Security Administration and was conducted by RAND Labor and Population, a division of the RAND Corporation.

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