Improving the Medicare Savings Programs

Federal action is needed to enroll more low-income elderly and disabled people in the Medicare Savings Programs, according to this report by an independent expert panel of the National Academy of Social Insurance. The roles and responsibilities of federal and state governments need to be sorted out, and additional federal financing should be provided.

Fewer than one in three eligible low-income persons is receiving benefits from the Medicare Savings Programs, which help pay Medicare’s premiums and cost sharing for hospital and physician services. A separate subsidy helps with the premiums and cost sharing for Medicare’s prescription drug benefit. Better aligning the Medicare Savings Programs with Medicare’s low-income prescription drug subsidy offers an opportunity to increase enrollment in both programs.

The report identifies the major barriers to enrollment in the Medicare Savings Programs and offers several options for increasing participation. The options build on the Social Security Administration’s ongoing efforts to enroll people in the low-income drug subsidy. One approach would use the information gathered by Social Security to make the current Medicare Savings Programs work better, without changing eligibility rules or administrative responsibilities. A more expansive, and expensive, course of action would simplify and liberalize the eligibility rules to provide greater uniformity between the Medicare Savings Programs and the low-income drug subsidy. Still another alternative is to adopt more limited changes that would facilitate a gradual increase in the federal financial and administrative role.

The panel’s conclusions are described in detail in its final report, Improving the Medicare Savings Programs. The panel also published three working papers:

• Current Processes for Enrolling Medicare/Medicaid Dual Eligibles in Medicare Savings Programs and Efforts to Increase Enrollment by Elizabeth Cusick and Ken Nibali
• Eligibility Standards for Medicare/Medicaid Dual Eligibles: Issues and Options for Reform by Mark Merlis
• Budget Estimates for Selected Medicare Savings Program Reform Proposals by James Verdier.

The Commonwealth Fund, a New York City-based private, independent foundation, provided the primary financial support for the project. Dissemination of the report was made possible by support from the W.K. Kellogg Foundation.