"AARP FEBRUARY 2023 PUBLIC POLICY INSTITUTE Insight on the Issues Underused Medicare Savings Programs Can Help Many More Older Adults Afford Health Care Tobey Oliver, Misty Williams, and Sari Siegel AARP Public Policy Institute Key Takeaways ¥ Medicare Savings Programs (MSPs) help low-income older adults pay Medicare premiums and other out-of-pocket costs. However, historically, MSP enrollment has been low, despite efforts over the years to increase participation. ¥ Renewed interest in promoting enrollment is leading to new state eligibility expansions and fresh looks at how best to conduct outreach and enrollment efforts in communities. ¥ States can increase enrollment in MSPs by streamlining the application process and expanding eligibility. They could, for example, raise income limits or eliminate asset tests. ¥ The federal government is proposing that states adopt a series of changes to the MSP eligibility process to boost enrollment. More than 64 million Americans depend on Medicare for access to the health care services they need, yet many still struggle to pay medical bills and some make the painful decision to forgo care entirely.' A crucial yet often overlooked government resource-the Medicare Savings Programs (MSPs)-could help ease that burden, but barriers have long stood in the way. Under MSPs," state Medicaid agencies pay Medicare premiums, deductibles, copayments, and other out-of-pocket costs for older adults with limited incomes and resources. As described below, at least 1.47 million Americans? could save approximately $2,000 or more each year through MSPs.* However, many people do not know this financial support exists. Federal officials have urged states for years to take advantage of existing flexibility in * MSPs refer to the four programs described in Table 1. the program that can enable states to make signing up easier and allow more people to qualify. Yet the program remains remarkably underenrolled. A 2017 Urban Institute report estimated that, on average, only about half of the people eligible for MSPs nationally are signed up.* The Centers for Medicare & Medicaid Services (CMS) is currently considering a series of new regulations that would push states to update and streamline how they determine who is eligible for MSPs, limit how much paperwork applicants must provide, and make other changes to increase enrollment. Meanwhile, advocacy organizations, health care providers, and other groups are testing out ways to more effectively educate people about MSPs and get them signed up. FEBRUARY 2023 The proposed CMS rule? brings timeliness and momentum to the ongoing challenge of MSP enrollment. To understand drivers of MSP underenrollment and identify strategies to overcome them, the AARP Public Policy Institute (PPI) reviewed more than a dozen studies, analyzed CMS and Social Security Administration (SSA) data, and interviewed stakeholders working on the front lines to enroll more Americans in MSPs. This paper explores PPI's findings and discusses their implications regarding solutions. MSPs Today: Enrollment, Enrollees, Barriers, Past Actions The MSP enrollment problem and what solving it would mean to people Out-of-pocket costs can add up quickly for many people with Medicare. A separate PPI analysis found that, in 2018, people with traditional Medicare spent an average of $6,168 for health care-nearly half of which (47 percent) went toward premiums alone-and 1 in 10 beneficiaries spent at least 52 percent of their income on health care.® Research has long shown that such costs lead enrollees to delay or skip needed care.' MSPs can play a key role in addressing this problem. Since its inception in 1965, Medicaid has covered some Medicare costs for low- income enrollees. Like Medicaid, MSPs are implemented by each state. Today, nearly 10.2 million Americans are enrolled in MSPs.*® The average MSP enrollee can save at least $165 each month on Medicare Part B (medical insurance) premiums in 2023.° But because MSPs also cover copays, deductibles, and coinsurance for the lowest-income enrollees, those savings could be substantially higher, depending on how often a person uses medical services and which MSP they are enrolled in. To address the range of needs of low-income Medicare beneficiaries, the federal government established four categories, or levels, of support $1,979 The minimum amount that MSP enrollment would save most individuals in 2023."° through MSPs, depending on an individual's income and asset levels: @ Qualified Medicare Beneficiary (QMB) e@ Specified Low-Income Medicare Beneficiary (SLMB) e Qualifying Individual (QD © Qualified Disabled Working Individual (QDWI) Each category covers different Medicare costs and has different income and asset limits that potential enrollees must meet (see Table 1). Minimum standards are set at the federal level, but states may choose to expand MSP eligibility beyond those criteria by increasing income limits and/or reducing or eliminating assets limits. However, most states have not, as discussed further below. Whom MSPs serve Nationally, about 16 percent of all Medicare beneficiaries are enrolled in MSPs. Studies show that MSPs disproportionately help people of color, women, and individuals under age 65 with disabilities." According to a Kaiser Family Foundation analysis: e@ 49 percent of MSP enrollees identify as non-Hispanic white, 21 percent as Black or African American, 19 percent as Hispanic, 7 percent as Asian/Pacific Islander, and 1 percent as American Indian/Alaska Native. @ 63 percent of MSP enrollees are 65 years old or older, with 35 percent between the ages of 65 and 74. FEBRUARY 2023 TABLE 1 2022 Federal MSP Eligibility Criteria Federal poverty level (FPL) UMMM hs (individual/married couple)+ Medicare savings CSM he reall married couple) WS) oS y) program type Qualified Medicare Beneficiary (QMB)* Specified Low-Income Medicare Beneficiary (SLMB)* Qualifying Individual (QI) Less than 100% FPL (i.e., $1,153/$1,546) 100%-120% FPL (i.e., $1,379/$1,851) 120%-135% FPL (i.e., $1,549/$2,080) Qualified Disabled Working Individual (QDWI) Up to 400% FPL (i.e., $4,615/$6,189) $8,400/$12,600 Medicare Part A premium and Medicare Part B premium, deductibles, coinsurance, and copays $8,400/$12,600 Medicare Part B premium $8,400/$12,600 Medicare Part B premium $4,000/$6,000 Medicare Part A premium Federal MSP eligibility criteria are codified in Section 1902(a)(10)(E) of the Social Security Act. Alaska and Hawaii have slightly higher federal income limits. "Individuals qualifying as QMBs and SLMBs who are also eligible for full Medicaid benefits are known as "QMB-Plus" and "SLMB-Plus" (or "full benefit duals"); those with only MSP benefits are known as "QMB-Only' or "SLMB-Only" (or "partial benefit duals"). *This amount does not include the $20 per month income disregard offered in all states except Connecticut. © 64 percent of MSP enrollees are enrolled in QMB-Plus, a subcategory under QMB and the highest level of assistance. State variations in MSP enrollment A PPI analysis of CMS data between 2015 and 2019" revealed that enrollment in MSPs nationally has increased at about the same average rate in each of those years (-1.7 percent) as Medicare (-2.1 percent). However, growth has varied significantly among states. From 2015 to 2019, MSP enrollment grew by 5 percent or more in 35 states, with several showing significantly greater growth than that-among them Nevada (43 percent), the District of Columbia (29 percent), Michigan (27 percent), Georgia (24 percent), and Arizona (23 percent). During this same period, MSP enrollment grew more rapidly than did overall Medicare enrollment in 15 states (see Table 2). Also varying by state is the share of total Medicare beneficiaries enrolled in MSPs, ranging from 30 percent in the District of TABLE 2 Top 10 States for MSP Enrollment Growth: 2015-19 TL K:) alice ata) Nevada 43% District of Columbia 29% Michigan 27% Georgia 24% Arizona 23% Oregon 18% Illinois 17% Indiana 16% Montana 16% Tennessee 15% Source: AARP PPI analysis of CMS program statistics, dual eligible enrollment data, 2015-19. Columbia to 5 percent in Wyoming (See Figure 1). Those states with larger shares of Medicare beneficiaries in MSPs tended to have taken advantage of available federal flexibility to expand the programs by increasing income limits, removing asset limits, or both. FEBRUARY 2023 FIGURE 1 Share of Medicare Beneficiaries Enrolled in the Medicare Savings Programs, 2019 16.9% r alae MSP asa % of Total Medicare Enrollment ! 30.2% 5.3% SPL 18.9% Source: AARP PPI analysis of CMS program statistics, dual eligible and Medicare enrollment data, 2019. The eligible but not enrolled TABLE 3 : : : : Enrolled and Eligible but Not Enrolled, by MSP Type Despite growing over time, enrollment in MSPs (2009 and 2010 deta) " vey yP remains stubbornly low. The percentage of people eligible but not enrolled ranges from rT % of eligible just under half for QMBs to 68 percent for . MSP type butnotenrolled who were enrolled SLMBs and up to 85 percent for QIs, according OMBs 47 53 to an Urban Institute study commissioned by OES a the Medicaid and CHIP Payment and Access Commission (MACPAC) in 2017 (See Table 3). Q's s® 1 The Urban Institute/MACPAC study found Source: Urban Institute's 2017 MACPAC study. that those individuals who were eligible but QDWI numbers were very small and thus excluded from the not enrolled in QMBs were more likely than analysis. QMB enrollees to be older, identify as white non-Hispanic, be married, and have private health coverage. Adults likely eligible but not _-_ Eligibility for MSPs overlaps substantially with in a QMB program were also less likely than another federal resource aimed at helping their QMB-enrolled counterparts to be enrolled low-income Americans pay their medical costs: in full-benefit Medicaid, have limitations in the Medicare Part D (i.e., prescription drug activities of daily living, be enrolled in the coverage) Low-Income Subsidy (LIS) program, Supplemental Security Income program, or also known as "Extra Help." This program receive Supplemental Nutrition Assistance helps Medicare enrollees with incomes up to Program (SNAP) benefits." 150 percent of the FPL pay Part D premiums, FEBRUARY 2023 deductibles, and prescription drug costs. Given the overlap, CMS notes that most LIS enrollees who receive the full benefit (with incomes up to 135 percent FPL) should also be enrolled in an MSP. However, CMS estimated in November 2021 that 1.25 million people enrolled in full LIS were not enrolled in MSPs, even though they were likely eligible.' This underenrollment remains persistent despite outreach efforts. As noted above, in 2022, SSA identified more than 1.47 million people it presumed to be eligible, but not enrolled, in MSPs and/or LIS. Our analysis of SSA data also found such individuals are three times more likely to live in rural rather than urban zip codes." State-level barriers and areas for improvement The federal government has consistently noted over the years that many states could be doing more to increase enrollment." States already have the option to expand eligibility by raising income and asset limits. As of 2022, at least five states and the District of Columbia have set income limits higher than the federal minimums, 10 states and the District have adopted no asset limit, and four states have increased asset limits. However, most states still use the federal minimum standards (see Figure 2)."8 Many states also have cumbersome application processes that could be streamlined-a barrier confirmed by qualitative evidence by SC Thrive, a statewide community-based organization that helps connect South Carolina residents with social services and benefits, and others on the front lines of enrollment. Medicaid agencies are required by federal statute to use LIS eligibility data to proactively initiate MSP applications." However, CMS has reported that some states are not meeting those requirements-and instead are putting the onus back on individuals by sending them a blank MSP application or a letter instructing them to apply."° A 2012 US Government Accountability Office GAO) report also found that 35 states required applicants to reverify at least some of their information," further extending the enrollment process. Why Is Enrollment Consistently Low? Insights From South Carolina Studies looking at underenrollment have found a lack of awareness of the program among potential beneficiaries and also cite cumbersome eligibility and enrollment processes as contributing factors." Some groups, such as people living in rural areas, may also be harder to connect with via outreach efforts and are less likely to encounter other government assistance programs where they might learn about MSPs. The on-the-ground experience of one South Carolina organization confirms a range of factors at play. According to staff at the nonprofit SC Thrive, would-be enrollees are often confused about what the program is, skeptical of potential fraud, hesitant to make any changes to their benefits for fear it will threaten other benefits, and overwhelmed by the application process." Most applicants that SC Thrive has helped have been well within the income and asset limits to qualify for an MSP, yet applicants are still hesitant to apply for fear of losing other benefits, says Katrina Seastrunk, director of data and reporting at SC Thrive. "There is no wiggle room for them... they are so afraid to make a mistake," she said, adding that 80 percent of the people SC Thrive has helped are between the ages of 60 and 80, and almost 80 percent are single. Stephanie McGuire, SC Thrive's chief development officer, uses the analogy of starting a new job and having a human resources staff person to explain all the benefits. In contrast, many people eligible for MSPs "don't have anyone to explain to them what benefits they might be eligible for,' McGuire says. "There is a great need for education in the community." FEBRUARY 2023 FIGURE 2 State MSP Eligibility Requirements in 2023 ) @ No asset test @ Federal for both (but rate is higher) Federal for both © Different asset level ™ Higher for both @ Temporary changes @ Higher for income Source: National Council on Aging." The GAO notes that states have financial redeterminations at least once a year (although incentives to enroll some people in MSPs but not some states may do them more often), which others. Specifically, for those with full Medicaid __can lead to MSP enrollees' losing eligibility."° benefits who qualify for Medicare, MSPsensure _ Dually eligible individuals lose Medicaid Medicare and not Medicaid is the primary coverage at significantly higher rates than payer for certain services-potentially resulting - those of people only on Medicaid because of in modest savings to the state." Alternatively, administrative application issues rather than beneficiaries who only receive MSP coverage are an actual change in circumstance.*° Losing likely to increase Medicaid costs for states since, coverage, even if just for a short period, is of the four MSP categories, only the Ql program _ disruptive and can be harmful to enrollees.*! is funded in full by the federal government. For the other programs, the federal government matches state dollars spent on MSPs, generally equal to their regular Medicaid federal match, . . or Federal Medical Assistance Percentage.' CMS estimates that, in 2020, nearly Some states have also reported administrative $200 million in federal funding cost savings by doing away with asset . . requirements and making other changes.2* available for the QI group remained unspent due to underenrollment.*" Further complicating enrollment, federal regulations require Medicaid eligibility FEBRUARY 2023 Past action to boost MSP enrollment Federal efforts to increase enrollment in MSPs have met with varying success over the years. In 2000, Congress directed SSA to notify Medicare beneficiaries that they may be eligible for MSPs.* In 2008, the Medicare Improvements for Patients and Providers Act (MIPPA) provided more specifics: e Requiring SSA to transfer LIS data to states for use in MSP applications and to coordinate outreach efforts for LIS and MSPs e Instructing CMS to translate MSP applications into 10 languages @ More closely aligning LIS and MSP asset limits MIPPA also supplied funding for state Medicaid agencies, state health insurance assistance programs, and national advocacy groups to conduct MSP outreach and education. In addition, CMS has issued guidance to states in 2010, 2018, and 2021, pointing out how they can align MSP eligibility standards with those of LIS to simplify the enrollment process.*4 Some of these efforts have netted positive results. The 2012 GAO report found that national MSP enrollment saw the biggest increase in the two years after MIPAA implementation (i.e., 5.2 percent in 2010 and 5.1 percent in 2011), which exceeded the concurrent rate of Medicare enrollment growth (i.e., less than 3 percent in both 2010 and 2011). Officials in 28 states reported enrollment increases as a result of SSA's efforts to share LIS data.* State solutions bubbling up One area that could benefit from further study is the effect on enrollment of expanding income limits and/or eliminating asset tests. For example, Maine broadened its MSP eligibility first by disregarding assets starting in January 2007 and then raising income eligibility limits three months later. Enrollment jumped from nearly 9,000 in January 2006 to more than 30,000 in July 2007. The biggest increase came after new income limits were implemented; roughly 13,500 beneficiaries gained MSP coverage in April 2007 alone.*6 States and Community Groups Work to Connect With Potential Enrollees Over the years, efforts to reach and educate individuals about MSPs have had mixed results. The State Solutions project funded and evaluated grantee outreach work and found that some grantees had success when targeting outreach to individuals who are enrolled in other public assistance programs that may have similar eligibility criteria. The State Solutions project also found that, while the effectiveness of mass mailings appeared limited, those missives with specific application guidance proved helpful. Input from potential beneficiaries in planning outreach and education strategies was also useful, for example, in helping researchers understand that would-be enrollees tended to trust communications from community leaders and local organizations.*' SC Thrive and the New York-based nonprofit Medicare Rights Center have found that in- person events and one-on-one interactions are particularly effective. Based in Columbia, South Carolina, SC Thrive partners with senior centers, libraries, churches, food pantries, farmers' markets, and other places people tend to gather. It also helps that the organization has established itself as a trusted resource for helping individuals enroll in other assistance programs, such as SNAP. SC Thrive uses an online application system called Thrive Hub, into which applicants enter their information once. Those data are then used to apply for multiple programs. "We try to get them all the benefits they're eligible for at the same time," says SC Thrive's McGuire. SC Thrive has found that potential enrollees are wary of information promising savings for fear it could be a scam. To help combat this fear, the agency cobrands materials with other trusted sources to reassure users that its information is trustworthy. It also focuses on simple messages highlighting the financial benefits of MSP enrollment to get attention and establish trust.*® FEBRUARY 2023 State Medicaid officials interviewed as part of the State Solutions project, an MSP enrollment improvement initiative administered in the early 2000s through the Center for State Health Policy at Rutgers University, reported that they did not think changes to the asset tests made a significant difference in enrollment. In 2001, Arizona's Medicaid staff, prior to eliminating the state's asset test, projected that eliminating the asset test would likely lead to only an additional 475 enrollees. However, the annual cost to the state, after factoring in administrative savings from staff time, was estimated to be only about $75,000.*° Alabama, Mississippi, and New York all have reported administrative savings in time and money from eliminating asset tests.*° More information on effective strategies may be on the horizon with new state-level MSP activity. Massachusetts included $73.2 million in its 2023 budget to expand MSPs to cover individuals with incomes up to 225 percent of the FPL," which the state estimates will enable approximately 65,000 additional Massachusetts residents to now qualify." Washington State introduced a bill in 2022 to eliminate its asset test for MSPs." Meanwhile, New York is also expanding its MSP (See box below). The Proposed CMS Rule and How It Changes the MSP Discourse In September 2022, CMS proposed technical changes to update and streamline the MSP eligibility processes to increase enrollment and reduce disenrollments due solely to administrative issues.** Many of the proposed changes aim to reduce the burden on applicants by requiring states to use more available data, and they require states to immediately enroll applicants and conduct any verifications postenrollment. For example, CMS proposes to do the following: e Take the burden off individuals to verify assets, financial information, citizenship, and identity by requiring states to rely on existing electronic data sources for that information, where possible. For MSP eligibility, this includes: directing states to fully use the LIS application data the state receives from SSA to begin assessing eligibility, avoiding requesting duplicative information from applicants, and accepting SSA-validated LIS data without additional information or proof from the applicant. Extending MSP Coverage to More New Yorkers Ages 65 and Older Up to 300,000 older New Yorkers could gain MSP coverage beginning in 2023 under a new expansion. The state recently raised the income limit to qualify for the QMB group from 100 percent to 138 percent of the FPL, eliminated the SLMB category, and increased the QI income limit from 135 percent to 186 percent of the FPL. The effort stemmed from a broader push to expand general Medicaid eligibility for adults ages 65 and older by increasing income eligibility to 138 percent of the FPL. The result: Many of those individuals who would have lost Medicaid coverage and faced Medicare premiums when they turned 65 may now remain on Medicaid and retain access to the medical services they need. Though the MSP expansion was initially introduced in legislation, it was ultimately included in the state budget. There will be no cost to the state for new QI enrollees, since that category is fully federally funded.* However, there will be some state cost for new QMB enrollees, since the state pays Medicare premiums for that group at its typical Medicaid matching rate (i.e., 50 percent); the federal government will fund the other half. FEBRUARY 2023 e@ Require states to automatically enroll into an MSP any applicant who attests to meeting income or asset requirements. States would then be allowed to conduct postenrollment verification. e Direct states that require proof of the cash- surrender value of a life insurance policy to assist the applicant in obtaining any necessary documentation from the life insurance company. e Require states to take steps to obtain an updated address if correspondence with an enrollee is returned as undeliverable. In the proposed rule, CMS also encourages states to align their MSP eligibility requirements with those of LIS. The suggested MSP changes are part of a broader CMS proposal that also addresses loss of eligibility for administrative reasons. It would require states to redetermine Medicaid eligibility no more frequently than once every 12 months. However, MSP redeterminations would not be included. CMS encourages states to voluntarily take this action on their own to reduce the number of enrollees who lose MSP eligibility solely for administrative reasons.** States and the proposed rule There are likely several reasons states have not made greater inroads in improving MSP enrollment rates. For instance, past efforts have shown that education and outreach to eligible individuals are not quick or easy. Some states may also need to make changes to eligibility systems that require staff time, technology upgrades, or other resources. However, if CMS's proposed rules are adopted, then states may have to make changes to MSP application processes to come into compliance. If the proposed rule is finalized, the mandated changes to state eligibility determination processes could create additional and costly administrative burdens-for example, allocating staff time to help applicants verify the cash value of life insurance policies. States could avoid these costs by proactively eliminating life insurance as a countable resource, as LIS has done. Similarly, states may need to assess their use of electronic data in the application process and, in doing so, may find opportunities to use new data sources that cut administrative work and streamline applications. The new rules would also require states to treat LIS data as already verified. Fully aligning MSP eligibility criteria with those of LIS would eliminate the administrative expense of having staff conduct posteligibility verifications. As anecdotal evidence suggests, saving on such administrative tasks could help compensate for the added costs to state budgets that come with enrolling more people in MSPs. To that end, the recent interest and activity around MSPs mark an opportune time for states to undertake a broader review of options that reduce administrative costs while also increasing enrollment. How the federal government can support efforts In its effort to help solve the enrollment challenge, the federal government can go beyond policy-it could help to maximize impact of the new rule by bringing states together to share best practices. It could also support efforts to offer technical assistance and disseminate such best practices-for example, by creating a checklist of potential data sources and program eligibility alignments. As CMS finalizes its proposed rules, it may consider where it can provide greater clarity and specificity on what actions states can take to meet the new requirements. It could also offer guidance and assistance to states as they review existing processes and develop new ones. State action steps If CMS finalizes the rule, states will have to evaluate their MSP enrollment processes to determine how best to meet the new requirements. States should take this opportunity to initiate a broader review of options to increase MSP enrollment and reduce FEBRUARY 2023 administrative burden on both program staff and potential enrollees. Even if all updates or improvements identified cannot be implemented immediately, states could evaluate the economic impact of each effort and develop a roadmap of priorities to be implemented over time or as opportunities arise. Because data collections and technology are not static, states should also continue to assess opportunities to make additional updates. Areas where states can tackle the enrollment challenge can be examined under two categories: increasing the enrollment of those already eligible and expanding eligibility. Reaching those currently eligible At a minimum, states should work to increase enrollment rates for those already eligible for MSPs. States can do this by employing some or all of the following tactics. Make applications simpler by using existing data. Align with LIS. States should align the methods they use for counting income and assets for MSPs with those for LIS, likely reducing administrative burden in the process. Although states have long had the ability to align the two programs' eligibility requirements, the proposed CMS rule gives states incentives to align the programs and reduce administrative burdens. Accept LIS application data received from SSA as fully verified. Officials in two states reported to the GAO that doing so enabled them to enroll applicants with little to no additional caseworker effort." Again, if CMS finalizes its proposed Medicaid eligibility rule, then states will be required to take this step anyway. Draw from other program data in the verification process. Using available data sources-for example, application data from SNAP and state pharmaceutical assistance programs-can reduce the onus both on applicants to secure the necessary documentation and on state staff to confirm applicant-supplied information.48 10 e Train (and retrain) caseworkers to identify those likely eligible for an MSP. For instance, states can screen for MSP eligibility applicants for other social benefit programs. The goal is to enable enrollment at any touch point, a mechanism sometimes known as "No Wrong Door." Increase and improve outreach efforts. e Work with stakeholders, including potential enrollees themselves, to develop strategies to best connect targeted enrollment outreach activities with those individuals likely to be eligible for MSP enrollment. Use community leaders as trusted sources of information in spreading word of MSPs. Take advantage of federal funding. States can apply for federal grants both to educate Medicare beneficiaries about MSPs (and other programs) and to aid in applying for benefits. In April 2022, the federal government announced the availability of $33.8 million for such outreach." Expanding eligibility In addition to improving enrollment rates, states should consider broadening eligibility criteria to make more people eligible for MSPs. As the New York example discussed above demonstrates, states may be able to do this with minimal cost once all potential costs and savings are assessed. Options for expanding eligibility include the following: e Increase income limits. States could raise the income limits for individuals to qualify for MSP and/or increase income disregards. For example, according to National Council on Aging (NCOA), Mississippi increased the amount of income that it disregards when assessing income for MSP eligibility to $50/ month. Indiana has increased the amount of income that an individual can earn and still qualify to be a QMB to $1,699 per month (or 150% of the FPL in 2022). The federal minimum is $1,153, which is 100% of the FPL for 2022.°° FEBRUARY 2023 e Change or eliminate the asset test. States could increase the assets that an individual can have and still qualify for an MSP, or they could eliminate asset restrictions completely. MSP income and asset limits vary widely, giving states a broad range of options to consider when modeling changes. For example, Maine allows a single individual to have up to $50,000 in assets, while Alabama has no asset restrictions and thus no asset review at all.*'! Doing away with the asset test has the added benefit of saving on administrative costs. Potential challenges and implications Implementing these options could pose some challenges and costs for states. Certain changes--such as aligning MSP criteria with those of LIS or eliminating asset tests- could require legislation or Medicaid state plan amendments, depending on the state. Increasing enrollment could also raise state Medicaid costs. However, the federal government still bears a significant portion of MSP costs, including fully funding the QI group. States may also realize savings from other state programs. For example, when Maine increased income levels for its MSP program, effectively increasing LIS eligibility, state staff estimated at the time that it would save funds in its state pharmacy program.52 Administrative savings could also help offset any additional expenses. In addition, MSPs could lead to downstream savings for states and the federal government- and taxpayers-by improving access to health care services that help to keep people healthier and out of hospitals and other more costly institutions. An Opportunity to Tap the Potential of MSPs CMS's proposed rule and, more broadly, growing interest in using MSPs to their maximum potential present an opportunity to make health care more attainable and affordable for many Americans. New York and Massachusetts, which have enacted higher income limits and made other changes in recent years, serve as examples of what states can achieve under existing flexibilities to expand the eligible populations. The increased focus on MSPs at the federal level and in some states also makes the current environment ripe for community and advocacy organizations to launch or reinvigorate enrollment efforts. The proposed federal rule encourages states to fully leverage data and electronic verifications, where possible. That undertaking could be significant for states, but it also has the potential to yield large dividends in expanding enrollment. Combined, these efforts at the federal, state, and local levels could help hundreds of thousands of Americans access the vital medical care they need to stay healthy and continue to live independently as they age. 1 Centers for Medicare & Medicaid Services (CMS), "CMS Fast Facts," August 2022, https://data.cms.gov/sites/default/files/2022- 08/4f0176a6-d634-47c1-8447-b074f014079a/CMSFastFactsAug2022, pdf. 2 In 2022, the Social Security Administration (SSA) sent letters to more than 1.47 million Medicare beneficiaries who may be eligible for MSPs and/or the Medicare Extra Help program, which helps cover prescription drug costs. For more information about this process, see SSA, "Program Operations Manual System (POMS)," accessed October 10, 2022, https://secure.ssa.gov/poms.nsf/ Inx/0600815025. 3 CMS, "2023 Medicare Parts A & B Premiums and Deductibles 2023 Medicare Part D Income- Related Monthly Adjustment Amounts, " September 27, 2022, h medicare-part-d-income-related-monthly. For most enrollees, MSPs at minimum cover the cost of Part B premiums, which, for 2023, is $1979 annually. 4 Kyle J. Caswell and Timothy A. Waidmann, "Medicare Savings Program Enrollees and Eligible Non-Enrollees," Urban Institute, June 2017, https://www.macpac.gov/wp-content/uploads/2017/08/MSP-Enrollees-and-Eligible-Non-Enrollees.pdf; see also Medicaid and CHIP Payment and Access Commission (MACPAC), "Medicare Savings Programs: New Estimates Continue to Show Many Eligible Individuals Not Enrolled," August 2017, https://www.m V/WD- 2017 Medicare-Savings-Programs-New- Estimates-Continue-to-Show-Many-Eligible-Individuals-Not-Enrolled.pdf. FEBRUARY 2023 5 CMS, "Streamlining the Medicaid, Children's Health Insurance Program, and Basic Health Program Application, Eligibility Determination, Enrollment, and Renewal Processes, Federal Register,' Vi Vol. 87, No. 54760, September 7, 2022, 6 Claire Noel-Miller, "Medicare Beneficiaries' Out-of-Pocket Spending for Health Care," AARP Public Policy Institute, December 2021, https://www.aarp.org/content/dam/aar i/2021/12/medicare-beneficiaries-out-of-pocket-health-care-spending.doi.10.26419- 2Fppi.00105.002.pdf. 7 Ashley Kirzinger, Audrey Kearney, Mellisha Stokes, Liz Hamel, and Mollyann Brodie, "KFF Health Tracking Poll - October 2021: Home And Community Based Services And Seniors' Health Care Needs," Kaiser Family Foundation (KFF), October 15, 2021, https://www.kff.org/health-costs/poll-finding/kff-health-tracking-poll-october-2021/. See also Samantha Artiga, Petry Ubri, and Julia Zur, "The Effects of Premiums and Cost Sharing on Low-Income Populations: Updated Review of Research Findings," KFF, June 1, 2017, https://www.kff.org/medicaid/issue-brief/the-effects-of-premiums-and-cost-sharing-on-low-income-populations- updated-review-of-research-findings/; Aviva Aron-Dine, Liran Einav, and Amy Finkelstein, "The RAND Health Insurance Experiment, Three Decades Later," The Journal of Economic Perspectives 27, no. 1 (Winter 2013): 197-222, https://www.ncbi.nlm. nih.gov/pme/articles/PMC3943162/; Alex D. Federman, Bruce C. Vladeck, and Albert L. Siu, "Avoidance of Health Care Services Because of Cost: Impact of the Medicare Savings Program," Health Affairs 24, no. 1 (Jan-Feb 2005): 263-70, https://www.ncbi.nim. nih.gov/pmc/articles/PMC1464118/. 8 CMS, "Ever-enrolled Trends Report - Accompanying Data Tables (2006-2019 Data) (ZIP)," Medicare-Medicaid Coordination Office (MMCO) Statistical & Analytic Reports, https://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid- Coordination/Medicare-Medicaid-Coordination-Office/Analytics. This estimate is calculated by adding the number of QMB, SLMB, QI, and QDWI for 2019. 9 CMS, "2023 Medicare Parts A & B Premiums and Deductibles 2023 Medicare Part D Income-Related Monthly Adjustment Amounts." 10 Ibid; $1,979 is the annual amount of the Medicare Part B premium ($165 per month multiplied by 12), the minimum most MSP enrollees would get covered if enrolled. This applies to the QMB, SLMB, and QI categories but not to the QDWI program, which pays only Medicare Part A premiums. 11 Meredith Freed, Juliette Cubanski, Anthony Damico, and Tricia Neuman, "Help with Medicare Premium and Cost: -Sharing Assistance Varies by State," April 20, 2022, h : g 12 AARP analyzed CMS program statistics data for Medicare total enrollment and for Medicare-Medicaid dual enrollment from 2015 to 2019. See CMS, "CMS Program Statistics - Medicare Total Enrollment, " Accessed November 1, 2022, https: lidata, cms.gov/summary- 13 Caswell and Waidmann, "Medicare Savings Program." See also MACPAC, "Medicare Savings Programs: New Estimates." 14 Ibid. 15 Daniel Tsai and Tim Engelhardt, "Opportunities to Increase Enrollment in Medicare Savings Programs," Centers for Medicaid and CHIP Services Informational Bulletin, November 1, 2021, https://www.medicaid.gov/federal-policy-guidance/downloads/ cib1101202L.pdf. 16 In 2022, the SSA sent letters to more than 1.47 million Americans, informing them that they may be eligible for, but are not enrolled in, an MSP and/or LIS. (Data available from SSA, "Program Operations Manual System (POMS)." AARP's Public Policy Institute analyzed 2022 SSA-L448 data, identifying individuals as both enrolled in LIS and likely eligible for but not enrolled in MSP, and found that SSA sent three times as many letters to rural zip codes (16.7 letters per 1,000 residents) as urban ones (5.6 letters per 1,000 residents; p < 0.05.) 17 CMS, Center for Medicaid and State Operations, Medicare Improvements for Patients and Providers Act of 2008 (MIPPA)," SMDL #10-003, February 18, 2010, h ' "Ten Opportunities to Better Serve Individuals Dually Eligible for Medicaid and Medicare," SMDL #18-012, December 19, 2018, https://www.medicaid.gov/federal-policy-guidance/downloads/smd18012.pdf; Tsai and Engelhardt, "Opportunities." 12 FEBRUARY 2023 18 The National Council on Aging (NCOA) reports that the District of Columbia and 10 states-Alabama, Arizona, Connecticut, Delaware, Louisiana, Mississippi, New Mexico, New York, Oregon, and Vermont-have done away with asset limits for MSPs. California, Maine, Massachusetts, and Minnesota have increased the asset limit set by the federal government. Connecticut, Indiana, Maine, Massachusetts, New York, and the District of Columbia have increased income thresholds. NCOA, "Medicare Savings Programs Eligibility and Coverage," updated February 2022, https://www.ncoa.org/article/medicare-savings-programs- 19 MIPPA required SSA to automatically send LIS eligibility data to state Medicaid agencies that, in turn, were to use it to proactively initiate applications. 20 Tsai and Engelhardt, "Opportunities." 21 GAO, "Medicare Savings Programs: Implementation of Requirements Aimed at Increasing Enrollment," Report to Congressional Committees, September 2012, https://www.gao.gov/assets/gao-12-87L.pdf. 22 US Government Accountability Office (GAO), "Medicare Savings Programs: Results of Social Security Administration's 2002 Outreach to Low-Income Beneficiaries," March 26, 2004, https://www.gao.gov/products/gao-04-363. See also MACPAC, "Medicare Savings Programs: New Estimates." 23 AARP Public Policy Institute interview with Stephanie McGuire, SC Thrive chief development officer, and Katrina Seastrunk, SC Thrive director of data and reporting, October 10, 2022. 24 In 2021, SC Thrive received a grant from AARP Foundation for MSP outreach. 25 NCOA, "Medicare Savings Program Eligibility." 26 Individuals who may move to Medicare and MSP from Medicaid are likely to be those who did not enroll in Medicare when they became eligible, most often because they did not qualify for premium-free Part A and could not afford to pay the premium. Savings to states in this category are likely to be limited, but they will vary by state. 27 CMS, "Program Overview and Policy, Chapter 1 (Revision 4)," August 21, 2020, https://www.cms.gov/files/document/chapter-1- program-overview-and-policy,.pdf. 28 Amy M. Tiedemann and Kimberley Fox, "Promising Strategies for Medicare Savings Program Enrollment: State Solutions Project: An Initiative to Improve Enrollment in Medicare Savings Programs," Rutgers University, Center for State Health Policy. May 2005. http://www.cshp.rutgers.edu/Downloads/5300.pdf. 29 CMS, Navigating | the Medicare © Savings Program SP) Eligibility Experience," " Accessed January 10, 2023, https://www.cms.gov/ 30 CMS, "Full-Benefit Dual Eligibility Loss Report (2015-2018 Data)," August 31, 2022, https://www.cms.gov/files/document/ fullbenefitdualeligibilitylossoverview2015-2018.pdf. See also Erin Weir Lakhmani, Alicia Lomas, and Elizabeth Wood, "Preventing and Addressing Unnecessary Medicaid Eligibility Churn Among Dually Eligible Individuals: Opportunities for States," Integrated Care Resource Center, March 2022, https://www.integr: rer r nter.com/si fi fi RC-Addressing-Medicai Churn.pdf. 31 Andrew B. Bindman, Arpita Chattopadhyay, and Glenna M. Auerback, "Interruptions in Medicaid Coverage and Risk for Hospitalization for Ambulatory Care--Sensitive Conditions," Annals of Internal Medicine 149, no. 12 (December 2008): 854-60, https://pubmed.ncbi.nlm.nih.gov/19075204/; Allyson G. Hall, Jeffrey S. Harman, and Jianyi Zhang, "Lapses in Medicaid Coverage: Impact on Cost and Utilization Among Individuals With Diabetes Enrolled in Medicaid," Medical Care 46, no. 12 (December 2008): 1219-25) https://pubmed.ncbi.nlm.nih.gov/19300311/. 32 In its November 2021 informational bulletin, CMS noted that in calendar year 2020, $200 million in federal funding for the QI category went unspent. CMS encouraged states to implement policies and procedures to help more individuals enroll in QI to access additional federal funding; see Tsai and Engelhardt, "Opportunities." 33 Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) (114 Stat. 2763A-572) (as enacted into law by section 1(a)(6) of Public Law 106-554). 34 CMS, "Medicare Improvements for Patients and Providers Act," "Ten Opportunities"; Tsai and Engelhardt, "Opportunities." 35 GAO, "Medicare Savings Programs: Implementation." 13 FEBRUARY 2023 36 Medicare Payment Advisory Commission (MedPAC), "Chapter 5: Increasing Participation in the Medicare Savings Programs and the Low-Income Drug Subsidy," Report to Congress, March 2008, https://www.medpac.gov/wp-content/uploads/import_data/ r fi fault-source/reports/Mar h f. As part of the increase in income limits, the state raised the QI program threshold to 185 percent of the FPL, which corresponded to the income limits for the state's pharmacy assistance program, known as the Low-Cost Drugs for the Elderly or Disabled Program (DEL). When the new income limits took effect, the state deemed DEL enrollees eligible for MSPs. 37 Laura L. Summer, "Accomplishments and Lessons from the State Solutions Initiative to Increase Enrollment in the Medicare Savings Program: State Solutions Project: An Initiative to Improve Enrollment in Medicare Savings Programs," Rutgers University, Center for State Health Policy. May 2006. https://georgetown.app.box.com/s/h59h4paa6616oxqmsde 38 In 2021, SC Thrive received a grant from AARP Foundation for MSP outreach. It helped more than 3,100 individuals apply for MSPs, exceeding its initial goal. 39 Tiedemann and Fox, "Promising Strategies." 40 NCOA, "State Policies Can Streamline Access to Medicare Savings Programs for Low-Income Older Adults," as cited in MACPAC, "Medicare Savings Programs: New Estimates." 41 Commonwealth of Massachusetts, "Senate Committee on Ways and Means Fiscal Year 2023 Budget Recommendations," executive summary, h {im i r v/B FY202 nateWaysMeansBi Ex iv mmary. 42 Commonwealth of Massachusetts, "Governor Charlie Baker Signs Fiscal Year 2023 Budget," press release, July 28, 2022, 43 Washington Senate Bill 5693 (p. 189), introduced Jan. 6, 2022, https://lawfilesext.leg.wa.gov/biennium/2021-22/Pdf/Bills/ Senate%20Bills/5693.pdf?q=20220131070326. 44 For more information, see CMS, "Streamlining the Medicaid, Children's Health Insurance Program, and Basic Health Program Application, Eligibility Determination, Enrollment, and Renewal Processes," Federal i Register, Vol. 87 FR, No. 54760, September 7, rogram-and- ic-health-program- ication. 45 42 U.S.C. § 1396u-3. State coverage of Medicare cost-sharing for additional low-income Medicare beneficiaries. 46 See 42 C.F.R. § 435.916 (a)(2). 47 GAO, "Medicare Savings Programs: Implementation." 48 Jennifer Wagner, "Streamlining Medicaid Renewals Through the Ex Parte Process," Center on Budget and Policy Priorities, March 4, 49 For more information, see Department of Health and Human Services, Administration for Community Living, "Availability of Program Application Instructions for MIPPA Program Funds," Federal Register, Vol. 87, No. 23867, EE April 21, 2022, https://www.govinfo.gov/content/pkg/FR-2022-04-21/pdf/2022- J 08511.pdf. Insight on the Issues 1545901, February 2023 © AARP PUBLIC POLICY INSTITUTE 50 NCOA, "Medicare Savings Programs Eligibility and Coverage." 601 E Street, NW 51 Ibid. Washington DC 20049 52 MedPAC, "Chapter 5." Follow us on Twitter @AARPpolicy on facebook.com/AARPpolicy WWW. aar is For more reports from the Public Policy Institute, visit http://www.aarp.org/ppi/. '/Idoi 10.26419/ppi.00181,001 14