Medicare Savings Programs

Dually Eligible Beneficiaries

Under mandatory Medicaid eligibility pathways referred to as Medicare Savings Programs (MSPs), dually eligible beneficiaries may qualify for assistance with payment of Medicare premiums and, in some cases, Medicare cost sharing. Individuals who only receive assistance through the MSPs, but do not receive full Medicaid benefits, are referred to as partial-benefit dually eligible beneficiaries. Individuals who qualify for full Medicaid benefits through other pathways, known as full-benefit dually eligible beneficiaries, may also receive assistance through the MSPs. There are four types of MSPs, with the level of assistance varying by income and whether the beneficiary is eligible for full or partial Medicaid benefits (Table 1).

In calendar year 2013, 8.8 million full and partial-benefit dually eligible beneficiaries received Medicaid assistance under the MSPs. Enrollment was primarily concentrated in the Qualified Medicare Beneficiary (QMB) program with about 7 million individuals enrolled.

MACPAC has found that participation rates are low across all MSPs:

  • 53 percent for the Qualified Medicare Beneficiary (QMB) program
  • 32 percent for the Specified Low-Income Medicare Beneficiary (SLMB) program
  • 15 percent for the Qualifying Individual (QI) program

States are not obligated to pay the full amount of Medicare cost sharing if the provider payment would exceed the state’s Medicaid rate for the same service. States have the option to pay, for a given Medicare service received by a dually eligible beneficiary, the lesser of (1) the full amount of Medicare deductibles and coinsurance or (2) the amount by which Medicaid’s rate for the same service exceeds what Medicare has already paid. MACPAC’s analysis of state policies has documented that more than 30 states are using the lesser of option. For a state-by-state compendium of Medicaid payment policies for Medicare cost sharing, see MACPAC’s State Medicaid Payment Policies for Medicare Cost Sharing.

Medicaid policies for covering Medicare cost sharing have modest but statistically significant effects on access to care.  MACPAC’s analysis found that paying a higher percentage of Medicare cost sharing increases dually eligible beneficiaries’ likelihood, relative to that of non-dually eligible Medicare beneficiaries, of using selected Medicare outpatient services and decreases the use of safety net provider services. For more information, see Effects of Medicaid Coverage of Medicare Cost Sharing on Access to Care from our March 2015 report to Congress.

For more information on enrollment in MSPs, see our issue brief Medicare Savings Programs: New Estimates Continue to Show Many Eligible Individuals Not Enrolled. To read the contractor report with a full analysis of enrollment in the MSP programs, see Medicare Savings Program: Enrollees and Eligible Non-Enrollees.