June 14,2004

Grassley: Key Official Repeats No Loss of Food Stamps With Medicare Drug Card

WASHINGTON – Sen. Chuck Grassley, chairman of the Committee on Finance, today released a reiteration from a key Medicare official that no older American will lose eligibility forfood stamps with a new Medicare drug discount card. Grassley made public a letter from Dr. MarkMcClellan, administrator of the Centers for Medicare and Medicaid Services, correcting mistakenguidance from the Agriculture Department that the drug discount cards might interfere with foodstamp eligibility.

“Someone at the Agriculture Department made a mistake, and whoever made it should beheld accountable,” Grassley said. “Medicare administrators need to make sure no other federalagency makes the same kind of mistake. The new Medicare law is perfectly clear that low-incomeMedicare beneficiaries who take advantage of the drug discount card don’t lose any benefits. In fact,Congress said not a single low-income benefit from the federal government is affected by theMedicare drug discount card and low-income benefit.”

The text of the McClellan letter follows.

June 11, 2004

The Honorable Charles Grassley, Chairman
Committee on Finance
United States Senate
Washington, D.C. 20510

Dear Mr. Chairman:

During the June 8, 2004, Finance Committee hearing on the Medicare Prescription Drug DiscountCard, a question was asked of me by Democratic Leader Daschle regarding the $600 in transitionalassistance and discounted prices, and its application to determining an individual’s eligibility andbenefits under the USDA Food Stamp program. I am writing to reiterate my answer in response tothis question and to clarify any ambiguity on this important matter: Low-income beneficiaries whoget valuable new help with their drug costs by using a Medicare-approved drug discount card do notlose any eligibility or benefits in the Food Stamp program.

Section 1860D-31(g)(6) of the Social Security Act, as added by the Medicare Prescription Drug,Improvement, and Modernization Act of 2003, states: “The availability of negotiated prices ortransitional assistance under this section shall not be treated as benefits or otherwise taken intoaccount in determining an individual’s eligibility for, or the amount of benefits under, any otherFederal program.”

In response to the question, I said the law clearly states that assistance for low-income beneficiariesthrough the drug card and transitional assistance cannot take away or reduce any other existingfederal benefits. Low-income Medicare beneficiaries who receive food stamps and have prescriptiondrug costs should definitely apply for the card and the transitional assistance. Beneficiaries mayreduce their drug spending by literally thousands of dollars as a result of the financial assistance anddiscounts in the drug card program, and it will not affect the calculation of food stamp benefits.Please find attached a posting to the USDA website clarifying this policy.

Let me also thank you and your committee again for your leadership in providing relief from highdrug costs for Medicare beneficiaries without drug coverage. Thanks to your leadership and the newMedicare law, low-income Medicare beneficiaries can get help right now with drugs and food. I amsending a similar letter to Democratic Leader Daschle.


Mark B. McClellan, M.D., Ph.D.