Trends in Medicare Savings Programs, Part D Subsidy Enrollment

The number of Medicare beneficiaries enrolled in the Medicare Savings Programs and receiving Part D low-income subsidies varied by state, as states have the individual power to expand eligibility and eliminate asset tests, an issue brief from the Kaiser Family Foundation (KFF) found.

Due to the different income limits and control states have over these programs, enrollment in the Medicare Savings Programs and the Part D low-income subsidy benefit varies from state to state.

Using Medicare beneficiary data from the 2019 Chronic Conditions Data Warehouse, researchers noted the trends in Medicare premium and cost-sharing assistance across the country.

The brief found that 10.3 million Medicare beneficiaries—16 percent of all beneficiaries—were enrolled in the Medicare Savings Programs in 2019. But the share of beneficiaries enrolled in the program varied by state. More than 25 percent of beneficiaries in the District of Columbia and Connecticut were enrolled in the program. Meanwhile, states like North Dakota, New Hampshire, and Wyoming had less than 10 percent enrolled.

The states that have expanded the income and asset limits typically had higher shares of beneficiaries enrolled in the Medicare Savings Programs, the brief noted.

The District of Columbia, Connecticut, Indiana, Maine, and Massachusetts raised the qualifying federal poverty limit above the federally defined minimum level. In addition, ten states and the District of Columbia eliminated the asset test for the Medicare Savings Program, while Massachusetts, Maine, and Minnesota have an asset limit above the federal limit.

For example, the 2021 federal asset limits for the Medicare Savings Programs are $7,790 for individuals and $11,960 for couples. Massachusetts raised its asset limits to $15,490 for individuals and $23,920 for couples.

The various income and asset limit expansions only apply to Medicare premium and cost-sharing benefits, the brief noted. Beneficiaries must meet state-defined eligibility criteria to qualify for full Medicaid benefits.

While the variation in Medicare Savings Programs enrollment is likely based on expanded income and asset limits, a handful of states with no limits or higher limits still had low shares of enrollment. In addition, poverty rates and different application processes may influence enrollment numbers, the researchers said.

Nearly 1.6 million Medicare beneficiaries received financial assistance from the Part D low-income subsidy but did not receive assistance through the Medicare Savings Program. More than 1.1 million of these individuals who were eligible for the Medicare Savings Program did not enroll, while 440,000 beneficiaries did not qualify for the program because their incomes or assets were too high.

The number of beneficiaries who receive a low-income subsidy but were not enrolled in the Medicare Savings Program varied from state to state, ranging from one percent in Connecticut to 21 percent in South Carolina.

The researchers noted this might be due to the differences in how eligibility is determined for the subsidy versus the Medicare Savings Programs. A lack of awareness of the Medicare Savings Programs may also be a driving factor behind low enrollment.

These programs primarily serve individuals of color, beneficiaries under age 65 with disabilities, and women. Despite efforts to increase enrollment, participation has been low, the brief stated.

The Medicare Savings Programs provide financial assistance for low-income Medicare beneficiaries. Through the program, state Medicaid programs help cover premiums costs, deductibles, and cost-sharing for beneficiaries with incomes up to 135 percent of the federal poverty level (FPL) and limited assets. Most beneficiaries who qualify for the program are also dually eligible for full Medicaid benefits. 

Beneficiaries with incomes up to 150 percent of FPL and limited assets are eligible for the Medicare Part D low-income subsidy, which provides financial assistance for premiums, deductibles, and cost-sharing under the Part D prescription drug benefit. Unlike the Medicare Savings Program, states do not administer this federal benefit. 

Individuals who qualify and are enrolled in the Medicare Savings Programs automatically receive full Part D low-income subsidies. Beneficiaries who are not enrolled in the program can apply for low-income subsidies if they meet the federal income and asset requirements. 

The asset test for both benefits may present a significant enrollment barrier, the researchers said. The test requires individuals to have savings, stocks, and bonds below a certain limit to meet the asset eligibility. These requirements go against the Affordable Care Act policies that use incomes only—not assets—to determine eligibility for marketplace coverage and Medicaid expansion.