Don’t Believe them! The Proposed Reconciliation Act Harms Medicare Beneficiaries & Older Adults
The proposed Medicaid work requirements in the bill will harm people with disabilities and older adults by cutting them off from part-time work or simply by the inevitable fallout that occurs when additional administrative burdens are forced on states and Medicaid beneficiaries. Excellent analysis has been done about how implementing the bill’s proposed Medicaid work requirements will harm people with disabilities and older adults by cutting off those whose health conditions prevent them from engaging in part-time work or merely by the inevitable fallout that occurs when additional administrative burdens are forced on states and Medicaid beneficiaries.
The reconciliation bill would also have a direct and intentional impact on Medicaid eligibility for those enrolled in Medicare – that is, older adults and those who have a disability. The proposed legislation would halt the implementation of two newly-adopted rules to improve the administration of Medicare Savings Programmes (MSPs). T
he Congressional Budget Office (CBO)
estimates that the consequences of stopping this rule will mean 1.3 million Medicare enrollees would lose Medicaid coverage of Medicare costs. CBO stated that Medicare enrollees would not be able access Medicare services, to a tune of $11 billion dollars. Cuts to Medicaid will be used to help pay for tax cuts for corporations and wealthy individuals.What are MSPs? Medicare can be expensive. MSPs are Medicaid-funded programs that pay Medicare premiums. They can also cover deductibles and copayments. MSP participants can also receive help with Medicare prescription drug expenses through the Low-Income Subsidy program. MSPs are key to making Medicare affordable.
Who Is Eligible for an MSP? MSPs are designed for low-income Medicare enrollees. They typically have incomes below $1,781 per person although some states may have higher income limits. Because the pathways to Medicare eligibility require a person to be over 65 or qualify for Social Security Disability Income (SSDI), MSPs offer targeted financial support to low-income older adults, people with disabilities, and their families.
What Are the New MSP Rules?
Despite the fact that MSPs offer critical financial assistance to low-income Medicare enrollees, complex enrollment rules had historically led to low enrollment, with only about half of those eligible actually enrolled. The new MSP rules, which were finalized in the years 2023 and 2024, accomplish their goal of increasing MSP involvement in multiple ways. Within a few short months of implementation, hundreds thousands of eligible Medicare beneficiaries were enrolled in MSPs. They also received additional financial assistance. The rules adopt strategies which have been successful in other parts the Medicaid program in order to ensure that eligible individuals remain enrolled in an MSP. This is done by simplifying eligibility requirements, and requiring that states process applications and renew promptly. These strategies reduce unnecessary costs and stress for beneficiaries, as well as poor health outcomes associated with churn. The rules also require that states eliminate redundant requests for eligibility information, provide clear notice of the evaluation process, as well as inform individuals about MSP applications assistance. Additionally, the rules align eligibility requirements with the Low Income Subsidy program, ensuring that, in determining MSP eligibility, states account for the financial pressures older adults and people with disabilities face when caring for dependents by requiring states to count those dependents in the household when setting individual income limits.
How Do the New Rules Benefit Older Adults & People with Disabilities?
As noted in the new rules, MSPs “are essential to the health and economic well-being of low-income Medicare enrollees, helping to free up limited income for food, housing, and other life necessities.”
The rule also supports second generation caregivers who generously volunteer to look after their grandchildren and adults who care for their aging parents at home. Stalling the implementation of these new rules would significantly increase financial stress on these caregivers who – even with the support MSPs provide – can barely afford life’s necessities for them and their loved ones.
Furthermore, for people with significant disabilities and complex medical diagnoses who regularly see specialists and take expensive prescription medications, MSP enrollment can be their only safeguard against the medical debt they would otherwise incur. MSPs also increase access to financial support for prescription drug coverage, which is shown to improve medication adherence, improve access to cancer treatment, and decrease mortality.
How Does the Reconciliation Bill Impact the New Rules?
Many of the streamlining regulations are already in place, and full implementation is scheduled for June 2027. The proposed budget bill would put a moratorium on rules’ implementation until the year 2035. If the reconciliation bill becomes law, many of the benefits that these rules have for Medicare-enrolled older adults, persons with disabilities, including saving them money, improving access to health care and protecting them against exorbitant medical bills, will be lost.
