Study Finds Room for Improvement in Medicare Savings Programs

May 27, 2003
A new study by the Kaiser Family Foundation examines the efforts of five states to bolster enrollment in their Medicare Savings Programs for beneficiaries who qualify for Medicaid assistance with premiums and co-insurance.

The study found that Medicare Savings Programs asset limits are a major barrier to enrollment. Both state officials and other stakeholders reported that the asset limits, which have not been changed since 1989, do not reflect the financial status of most low-income beneficiaries. In addition, they said that the onerous task of verifying the worth of various assets deters or prevents many eligible individuals from completing applications and causes additional paperwork for state agencies.

The researchers found that eliminating the asset test for the Medicare Savings Programs could enable more individuals to qualify for benefits, simplify enrollment for both beneficiaries and state agencies, and be cost-neutral for states.

The study also found that individuals' fear of Medicaid estate recovery often deters enrollment and undermines state efforts to promote participation. The case studies revealed widespread misunderstanding of estate recovery rules and fear among potential enrollees that receipt of benefits would allow states to immediately seize their homes. Even those who understand estate recovery rules may resist enrolling in order to preserve a small inheritance for their families.

Enhancing the benefits available to Medicare Savings Program enrollees -— for example, by offering the full range of Medicaid benefits or linking eligibility to a state-operated pharmacy assistance program —- can persuade eligible individuals to apply for benefits, the study found. Researchers said the limited nature of the program discourages many individuals from applying.

The full text of the survey is available at http://www.kff.org/content/2003/20030522.