Dear Senator,

I am writing to strongly urge you to oppose the unprecedented proposed Senate Appropriations Committee 42% cut in funding for State Health Insurance Assistance Programs (SHIPs), from $52.1 million to $30 million. A cut of this magnitude would dramatically erode the SHIP national network of unbiased, reliable, and personalized health benefits information counseling to older adults, people with disabilities, and their families. In fact, if SHIP funding had simply kept pace with inflation and the increasing number of Medicare beneficiaries since FY11, spending for FY16 should be $63.8 million.

The SHIP program provides grants to 54 grantees (all states, Puerto Rico, Guam, DC, and the US Virgin Islands) and oversees a network of more than 3,300 local SHIP programs and over 15,000 counselors.[1] The proposed funding cut comes at a time when Medicare just celebrated its 50th anniversary, and about 10,000 Americans are becoming Medicare eligible each day Ė significantly increasing the need and demand for SHIP services. One-on-one assistance provided by SHIPs has grown from 1.2 million client contacts in 2005 to 3.4 million contacts in 2014, a 270% increase.

If a 42.5% cut resulted in an across-the-board reduction in services, almost 1.5 million fewer people with Medicare would receive assistance. Since over 57% of SHIP counselors are volunteers, who donate almost 2 million hours of assistance, such a reduction could also result in reduced or compromised volunteer training, which increases the risk of erroneous advice and reduces the quality of services beneficiaries receive.

Understanding the A, B, C, and Dís of Medicare is often an overwhelming process. It can also be an isolating experience if seniors and people with disabilities don't know where to get help. The SHIPs have provided local, in-depth, insurance counseling and assistance to Medicare beneficiaries, their families, and caregivers since 1992. Counseling services are provided via telephone, one-on-one in-person sessions, and approximately 94,000 public education presentations last year. These personal, face-to-face services are especially important for the significant number of Medicare beneficiaries with cognitive illness or other chronic conditions that make it more difficult to process complicated information.

The primary goal of the SHIP programs is to advise, educate, and empower individuals to navigate this increasingly complex program and to help beneficiaries make choices among a vast array of options to best meet their needs. Making an informed decision among 30+ prescription drug plans, as well as a wide variety of Medicare Advantage plans or Medigap supplemental policies can save money for both Medicare beneficiaries and the Medicare program. For example, research has indicated that if beneficiaries chose the least expensive Part D plan available in their region, they could save an average of $368 per year and that only 5.2 percent of the beneficiaries in the study sample chose the least expensive plan.[2] Given the significant differences in premiums, cost sharing, provider networks, and coverage rules, SHIPs play a critical role in ensuring that these choices are well informed and thoughtful for each beneficiary served. SHIPs also provide assistance with fraud and abuse issues, billing problems, appeal rights, and enrollment in low-income protection programs.

These are increasingly critical services that cannot be provided by 1-800 Medicare, on-line or written materials, or other outreach activities. In fact, all of these and other sources routinely refer beneficiaries to SHIP Counselors, including Medicare Advantage and Part D prescription drug plans, local and state agencies, 1-800-Medicare, the Centers for Medicare and Medicaid Services, the Social Security Administration, and members of Congress and their staff. Approximately one-third of SHIP referrals are from these partners, many of whom include SHIPs in their websites, publications, and correspondence to beneficiaries as the source of assistance when individuals need help.

Thank you for your attention to this matter. While our strong preference would be to index FY11 funding levels for FY16 to $64 million in order to better meet growing needs, we ask that the Senate reject this unprecedented proposed cut and level fund the program at $52.1 million, as the House Appropriations Committee has recommended.

Sincerely






1) See http://www.acl.gov/Programs/CIP/OHIC/SHIP.aspx

2) See "The Vast Majority of Medicare Part D Beneficiaries Still Donít Choose the Cheapest Plans That Meet Their Medication Needs;" Chao Zhou and Yuting Zhang; Health Affairs, October 2012 (http://content.healthaffairs.org/content/31/10/2259.full.pdf+html) and "Plan Selection in Medicare Part D: Evidence from Administrative Data;" Florian Heiss, Adam Leive, Daniel McFadden, and Joachim Winter; National Bureau of Economic Research, June 2012 (http://www.nber.org/papers/w18166)