Proposed changes to Medicare Savings Program would impact 45,000 older Mainers’ eligibility for health care benefits

Last year, Governor Mills signed a budget into law that expanded eligibility to the Medicare Savings Program (MSP), a profound investment in helping older Mainers pay for the cost of health care. Now, Mills’ supplemental budget proposes to reverse most of those changes, which could cause as many as 45,000 older Mainers to either lose eligibility for a program that provide thousands of dollars in critical support each year, or become eligible for less generous benefits.

The MSP helps older Americans with lower incomes pay for the costs of health care. There are several different tiers of assistance, for which states set eligibility criteria following certain federal standards. The program is funded through Medicaid with a combination of federal and state dollars, and more than 70 percent of last year’s eligibility expansion was projected to be paid for by federal funds. Maine, along with other states including Alaska, Connecticut, and Indiana, has set higher income eligibility limits to help more residents cope with the cost of health care later in life.

The two-year budget signed into law last July expanded eligibility for MSP in two ways: it removed the asset test, meaning older Mainers with low incomes would no longer have to spend down their savings or sell most of their assets before qualifying for assistance; and it expanded eligibility for different categories of beneficiaries based on their income relative to the federal poverty level (FPL).1 After the legislature passed the budget last July, DHHS touted the changes in a blog post, and since that time organizations representing retirees and other older Mainers have been informing their constituents of the anticipated expansion. For fiscal year 2024-25, the changes represented an investment of nearly $59 million in state and federal dollars to expand access to health care.

Now, less than eight months later, the supplemental budget proposes to roll back the income eligibility expansions. The administration proposes reverting MSP eligibility to its previous income levels, except for a higher QI cap of 202% FPL. The proposed benefit cuts are estimated to save the state approximately $14 million while foregoing $38 million in federal investments, all but approximately $7 million from the budget signed last July.

These proposed changes threaten tens of thousands of people in every community across the state. An analysis of from the US Census Bureau finds an estimated 45,000 Maine residents would either lose benefit eligibility or become eligible for less valuable benefits if these changes become law. This includes five percent of Aroostook County residents, 22 percent of Oxford County residents aged 65 and older, and more than 7,300 people in Cumberland County.

As Mainers continue to grapple with rising costs and the state has an extra surplus now is not the time to take health care supports away from some of the people who need it the most. MECEP urges legislators to keep their commitment to older Mainers and reject cuts to the Medicare Savings Program.


Notes

[1] The income limit for qualified Medicare beneficiaries (QMB), for whom MSP helps pay for Part B premiums, deductibles, copayments, and coinsurance, was increased from 150 to 185 percent of FPL. Eligibility for qualified individuals (QI), for whom MSP helps pay for Medicare Part B premiums if they have both Medicare Parts A and B, went from 170-185 percent FPL to 185-250 percent FPL. (Another tier, called specialized low-income Medicare beneficiaries (SLMB) which had an eligibility range of 150-170% FPL, was eliminated.)