Medicare Savings Program Enrollment Increases When States Expand Financial Eligibility Criteria

Medicare Savings Programs (MSPs) help individuals with low incomes pay their Medicare premiums and, in some cases, their out-of-pocket costs like deductibles and cost sharing. These programs save most individuals who enroll approximately $2,000 or more in out-of-pocket costs each year.

Federal law sets minimum standards for MSP eligibility, but states can use more generous eligibility criteria. To date, 17 states have chosen to use more generous income and/or asset criteria for MSPs than the federal standards, and more states are considering their own changes.

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Four Case Studies

Because information has remained limited on how eligibility criteria changes have affected enrollment, Mathematica, working with the AARP Public Policy Institute, analyzed MSP enrollment patterns in a sample of four states before and after they expanded MSP eligibility criteria.

1. Indiana raised the income limit for its QMB (Qualified Medicare Beneficiary) program from 100 percent to 150 percent of the FPL (federal poverty level) and raised SLMB (Specified Low-Income Medicare Beneficiary) and QI (Qualifying Individual) income limits to 170 percent and 185 percent of the FPL, respectively, in 2014.
2. Louisiana eliminated the asset test for all MSPs (meaning they do not look at assets at all in determining MSP eligibility) as of 2019.
3. Massachusetts raised its income limits for the QMB program to 130 percent of the FPL, for the SLMB program to 150 percent of the FPL, and for QI to 165 percent of the FPL (with a $20 disregard for all three) in 2020. The state also increased its MSP asset limits that year to $15,720 for an individual and $23,600 for a couple.
4. Oregon eliminated the asset test for all MSPs as of 2016. 

The four sample states represent several types of financial eligibility criteria changes (changes to income criteria, asset criteria, or both). These four states also made their eligibility criteria changes sufficiently long ago to allow for examination of the policy changes’ effects on MSP enrollment but not so long ago as to make the data less reliable.

Key Findings

• In the four states studied (Indiana, Louisiana, Massachusetts, and Oregon) that expanded MSP eligibility criteria, MSP enrollment rates increased after the change.
• In the states analyzed, MSP enrollment rates increased immediately when states increased the income levels for MSP eligibility, whereas in states that eliminated asset limits, enrollment increases took longer to materialize.
• All states experienced long-term growth in MSP enrollment rates after their policy changes. By the end of 2022, the actual enrollment rates were 54 percent, 14 percent, 28 percent, and 10 percent higher than would have been expected in Indiana, Louisiana, Massachusetts, and Oregon, respectively, if the state’s enrollment had continued with the trajectory before the policy change.

Policy implications: eligibility changes lead to enrollment changes

Research has long shown that individuals are prone to delay health care because of cost. Delays in care can detrimentally affect health, which can lead to higher health care costs over time, lost productivity, and other consequences that may have wider, indirect economic effects in the state. Potential state savings could come from eliminating MSP asset limits by reducing administrative burden for both beneficiaries and state eligibility staff because there would no longer be a need to review asset documentation during initial and annual eligibility determinations. Additionally, expanding MSP eligibility criteria could help more low-income Medicare beneficiaries access preventive and community-based care, thus helping reduce the need for states to cover higher-cost long-term services and supports through their Medicaid programs. These study results can help states plan for their own changes to financial eligibility criteria.