Good news for Medicare-eligible patients: the Centers for Medicare & Medicaid Services (CMS) is making it easier for individuals with limited income to apply and reenroll in Medicare Savings Programs (MSPs).

On Sept. 21, CMS issued a final rule that will streamline the enrollment and eligibility processes for the MSPs and align them with the requirements and processes for other public programs. The rule will also serve to reduce the complexity of the application and reenrollment process for eligible individuals. 

What is an MSP?

The MSP is a program that coordinates with state Medicaid agencies to provide Medicare Parts A and B copayment and premium support for Medicare enrollees with limited resources and income. Medicaid pays Medicare Part B premiums every month for over 10 million individuals and Part A premiums for over 700,000 individuals. CMS says that millions more are eligible but not enrolled, citing a 2017 study estimating that only half of persons eligible for Medicare are enrolled in MSPs.

Consistent with several of President Biden’s executive orders focusing on removing barriers and improving access to affordable healthcare, CMS sought to improve access to MSPs, which was the impetus for this rule.

What does the new rule do?

This new rule creates requirements for coordination between several different low-income assistance programs to reduce the effort for eligible persons to be enrolled in multiple programs for which they qualify. It builds on previously enacted laws, including the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), which was enacted to improve low-income benefit programs for Medicare beneficiaries. MIPPA included some requirements for states to streamline enrollment of Medicare Part D Low-Income Subsidy (LIS) program enrollees into the MSPs; the new rule codifies some MIPPA provisions and further streamlines enrollment of LIS enrollees into MSPs.

In particular, the rule requires states to utilize data from the Medicare Part D LIS program (sometimes called the “Extra Help” program) in an effort to streamline eligibility and enrollment efforts. The LIS and MSP programs both use a similar methodology to determine eligibility.  Current regulations require that beneficiaries enrolled in MSPs automatically be enrolled in LIS.  However, the converse is not true: individuals enrolled in LIS are not automatically enrolled in an MSP, even though they are likely eligible. The new rule proposes several regulatory changes that should help efficiently enroll LIS beneficiaries into an MSP, including through the use of LIS data as an MSP application.

The goal for this new rule is that it should reduce the burdensome paperwork requirements of applying for multiple assistance programs so that the large numbers of eligible older adults and individuals with disabilities can access crucial financial and health benefits that MSPs provide.

Although the rule provides that the regulations are to take effect on November 17, 2023, most of its provisions would actually not take effect until 2026 so states can have time to enact the necessary regulatory infrastructure to comply with the rule. 

Reed Smith will continue to monitor the progress of states’ implementation of the new rule. If you have any questions about how to assist your patients or how the new rule could impact them, please reach out to the health care lawyers at Reed Smith.