Even with existing support programs, some Medicare beneficiaries can face high premiums as a percent of income for Part B and Part D. Medicare Savings Programs, administered by state Medicaid programs, provide financial assistance with Part B premium obligations to many low-income Medicare beneficiaries who are not eligible for full Medicaid benefits. Likewise, the federal Low-Income Subsidy program provides many low-income enrollees in Part D with subsidies to assist with premium payments and cost-sharing for prescription drugs. Even with these programs, low-income beneficiaries may still face very high financial burdens from premiums and cost-sharing (i.e., deductibles, and copayments) income and asset limits, and the state-administered Medicare Savings Programs often are less generous than federal laws allow. In an earlier brief, we estimated the effects and costs of policies that would limit the financial burden of premiums and cost-sharing for Part B. In this brief, we estimate the effects and costs of two national policies that would limit the financial burdens of premiums for Part B and Part D faced by Medicare enrollees with low incomes. We find a cap on premiums at 8.5 percent of income would provide some financial assistance to nearly all enrollees with incomes below the federal poverty level (FPL) and many with incomes between 100 and 200 percent of FPL without substantially raising Medicare program spending. Applying the more generous income caps that the Inflation Reduction Act sets for the ACA would provide financial assistance to all Medicare enrollees with incomes below 200 percent of FPL and nearly half of enrollees with incomes between 200 and 400 percent of FPL but would raise total Medicare Part B and Part D program spending by about 8 percent.
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