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. 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 (Indiana, Louisiana, Massachusetts, and Oregon) before and after they expanded MSP eligibility criteria. 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. We found that MSP enrollment rates increased in all four states 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.