MEDICARE SAVINGS PROGRAMS VASTLY UNDERENROLLED

Less than one–third of those eligible are enrolled in Medicare Savings Programs (MSPs), according to a new report by the National Academy of Social Insurance (NASI). The programs, created 15 years ago, help low-income individuals pay Medicare premiums and cost sharing.

A lack of awareness about MSPs, the difficulties in reaching the target population, and the lengthy and difficult application process are among key barriers to enrollment, said Jack Ebeler, chair of the NASI study panel, at a June 12 briefing sponsored by Alliance for Health Reform on Capitol Hill. In many states, potential enrollees must apply in a Medicaid office, invoking a stigma of welfare that deters many eligible people. In addition, the complicated array of programs and requirements and the multistep enrollment process are confusing to many people with Medicare.

The NASI report recommends the use of Social Security information to target potentially eligible people, better coordination of individual assistance, and closer alignment between eligibility criteria for MSP and the Part D Extra Help program.

NASI recommends excluding financial assets, such as Individual Retirement Accounts, from the resource test and counting their estimated annual value as income. This would put individuals with such assets on an equal footing with those who receive a defined–benefit pension and expand eligibility. The report cautions that this would complicate the application process, creating new burdens both for states and people with Medicare.

NASI also advocates a gradual shift of administrative and financial responsibility away from states toward the federal government. Currently, state Medicaid agencies must bear most of the enrollment responsibility, an arrangement many state officials "understandably resent." Since the Social Security Administration now collects most of the necessary income and asset information, requiring Medicaid agencies to handle the enrollment process and share costs is an unnecessary burden, says the report.

Jennifer Young, former assistant secretary for legislation for the U.S. Department of Health and Human Services, expressed concern during the briefing about expanding eligibility for the programs, stating that the government needs to be cautious about increasing the tax burden on people who themselves lack health insurance.

(reproduced with permission from Medicare Watch, Issue 14)