Unlocking Medicare Savings Programs’ Potential: State Policy Approaches to Health Care Affordability
Medicare Savings Programs (MSPs) help make healthcare more affordable and accessible for low-income, Medicare-eligible older adults by lowering their Medicare costs. MSPs, which are administered by state Medicaid agencies, provide financial assistance to qualifying individuals to help pay premiums for Medicare coverage and cost sharing for services they receive. This assistance enables access to care for individuals who might otherwise forgo needed services due to cost and helps free up limited resources for other life necessities.
Despite the benefits MSPs can provide, there is a history of low participation rates among eligible individuals. Less than half of states have raised MSP eligibility thresholds beyond federal minimums. However, some states have taken steps to increase MSP eligibility and address participation challenges that can offer insights for others considering similar strategies.
To explore opportunities to expand access to MSPs, West Health partnered with Aurrera Health Group (Aurrera Health) to identify state policy levers and strategies to expand MSP eligibility and increase participation among eligible individuals. As part of this work, Aurrera Health conducted key informant interviews with states, federal policymakers, national experts, and advocates for healthcare affordability. The work culminated in an issue brief – “Expanding Medicare Savings Programs (MSPs) to Increase Healthcare Affordability and Accessibility for Medicare Beneficiaries with Limited Financial Resources” – that provides a review of the role of MSPs in supporting affordability among low-income older adults, challenges and opportunities for expanding MSP eligibility and enrollment, and insights from key informants. Below are key takeaways from this work.
State efforts to raise financial eligibility thresholds can increase MSP enrollment and improve healthcare affordability for older adults.
Increasing income eligibility is more effective than raising or eliminating asset limits for expanding access to and increasing MSP enrollment.
Aligning MSP eligibility with eligibility for other programs that serve low-income adults (e.g., Aged, Blind, and Disabled Medicaid and the Part D Low-Income Subsidy program) can support expanded access to more robust benefits.
Careful budgetary analysis can help identify opportunities to offset some MSP expansion costs and leverage available federal resources.
Payment policies, such as lesser-of policies, reduce provider payments and can compromise the value and protections offered by MSPs.
State efforts to streamline enrollment and conduct outreach can help address MSP participation challenges.
Recent federal action to maximize MSP enrollment will require state investment in system changes and federal support and coordination.
Bolder solutions for improving the accessibility of MSPs, such as consolidating MSP program types or shifting financing and administration to the federal government, could help further reduce complexity and ease burdens on beneficiaries and states.
In addition to the issue brief, Aurrera Health wrote an article entitled “State Policy Levers Can Increase Enrollment in Medicare Savings Programs” – that was published in Health Affairs as part of a recent series on Medicare and Medicaid integration. The article highlights findings from the work that provide context and are actionable for states considering strategies to expand MSP eligibility to increase healthcare affordability.
If you are interested in learning more about Aurrera Health’s experience with policies and programs that impact older adults, people living with disabilities, and dually eligible beneficiaries, or our approach to policy research and interviews across other related topics please reach out to Kristal Vardaman.
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