By Lisa Watts
What happens when low-income people who access Medicaid under the Affordable Care Act become eligible for Medicare? LTSS Center researchers wanted to know.
In 2020, the Affordable Care Act allowed many states to expand access to Medicaid for low-income adults aged 19 to 64 with incomes up to 138% of the federal poverty level. When these individuals reach age 65, qualify for Medicare, and have incomes greater than 100% of the federal poverty level, they face higher premiums, deductibles, and co-payments because they lose their Medicaid eligibility. The situation, known as the “Medicare cliff,” affects more than a quarter million people every year.
Over the last three years, researchers at the LeadingAge LTSS Center @UMass Boston have partnered with colleagues at the National Council on Aging (NCOA) to study who is affected by the coverage cliff, how and why the situation occurs, and what can be done to soften the blow for those affected. Arnold Ventures funded the three-year project.
Those who hit the cliff each year are more likely to be retired women (58%) with a median age of 67 who live with an average of two or more chronic health conditions, according to researchers Marc Cohen, Jane Tavares, and Eileen Tell.
“Not surprisingly, the financial challenges are greatest for those with the lowest income,” says Cohen, co-director of the LeadingAge LTSS Center @UMass Boston. “Having to pay more under Medicare plans means cutting back on other necessities. The cliff disproportionately affects women, people of color, and people with complex medical conditions.”
Medicare Savings Programs (MSP) exist at the state level to help individuals with low incomes afford the costs of Medicare. Yet, beneficiaries reported that they didn’t understand the program in their state and found it challenging to navigate. The researchers made several recommendations to address the concerns of these beneficiaries:
- Improve education about MSPs and their enrollment processes.
- Allow the Medicare cliff population to maintain Medicaid eligibility as they enter Medicare.
- Change the eligibility criteria for MSPs, possibly synchronizing the income threshold with other benefit programs so more people can qualify.
Recommendations for supporting the researchers’ proposed policy reforms include:
- Convene states with strong Medicare consumer outreach and education programs to share their best practices with states currently struggling with outreach and education.
- Fund testing and development of improved training to help State Health Insurance Assistance Programs counsel this population about health insurance coverage.
- Host a policy forum and invite experts representing state agencies, think tanks, advocacy organizations, consumers, and academia. Invite participants to identify and prioritize policy objectives and policy reforms.
- Invest in analysis and modeling to identify the cost implications of researchers’ policy recommendations and sources of revenue to support those policy reforms.
Read a summary of the study.