A new report from AARP Public Policy Institute (PPI) examines the challenges faced by low-income adults who enroll in expanded Medicaid coverage and later must transition into coverage under Medicare. Under the Affordable Care Act (ACA), states can expand Medicaid coverage to adults ages 19-64 earning up to 138% of the Federal Poverty Level (FPL). The Supreme Court ruled in 2012 that Medicaid expansion is a state option. To date, 28 states and the District of Columbia have chosen to expand the program to adults under age 65 who in most cases would not have qualified before the expansion.
Individuals enrolled in expansion Medicaid have little or no out-of-pocket costs when accessing covered health care, prescription medications, and other Medicaid-covered services, and these individuals rarely pay a premium. When a person turns 65 or becomes eligible for Medicare under the age of 65, however, that person generally can no longer qualify for expansion Medicaid and must instead be covered under Medicare.
The AARP PPI report highlights additional costs for low-income adults transitioning from expansion Medicaid into Medicare, and discusses restrictive income and asset limits associated with programs available to help low-income Medicare beneficiaries with their Medicare premiums and cost sharing. Specifically, the report highlights the Medicare Savings Programs (MSPs), all of which pay a Medicare beneficiary’s Part B premium, and automatically qualify that individual for assistance with Medicare prescription drug costs, through the Extra Help program. Eligibility for full Medicaid benefits and for MSPs for individuals age 65 or older (and those with Medicare who are under 65) are often stricter and can count a person’s assets, whereas assets are not counted to determine eligibility for expansion Medicaid.