From Medicaid to Medicare: How States Can Help Those Facing the Cliff
After the Affordable Care Act gave states the opportunity to expand Medicaid to adults with incomes up to 138% of the Federal Poverty Level (FPL), 32 states and the District of Columbia extended coverage to millions of adults who lacked insurance. However, these individuals with expansion/Adult Group Medicaid often encounter confusion about whether they automatically get to keep their Medicaid coverage when they transition to Medicare.
A new issue brief drafted for NCOA by the Medicare Rights Center reveals that, depending on where they live, the answer differs widely. Yet at the same time many states are easing this transition process through practices that may be replicable in other areas.
For individuals becoming Medicare-eligible who are no longer eligible for Adult Group Medicaid, the possible outcomes are:
- Those with very low income and assets may qualify for Aged, Blind, and Disabled (ABD) Medicaid and a Medicare Savings Program (MSP). These benefits provide wraparound coverage to Medicare.
- People with low income and assets who may not qualify for ABD Medicaid still may be eligible for one of the MSPs. All MSPs pay the Medicare Part B premium; however, only the Qualified Medicare Beneficiary (QMB) program pays for other out-of-pocket cost-sharing in Medicare.
- They do not qualify for either ABD Medicaid or MSPs and lose financial assistance when they enroll in Medicare.
- In limited circumstances, an individual can enroll in Medicare and remain in Adult Group Medicaid (see our FAQ for further information).
This third scenario is sometimes called the “Medicare cliff.” Often Adult Group Medicaid enrollees fall off the cliff not because they don’t qualify for assistance, but because they don’t hear about or get help with these programs.
In an ideal world, states have—and are able to implement—a seamless process for transitioning Adult Group Medicaid beneficiaries into Medicare. This process might look something like Figure 1.
In reality, Medicare Rights found that states have very different processes, each with its own state-specific promising practices and challenges related to:
- Identification of Adult Group Medicaid beneficiaries transitioning to Medicare
- Beneficiary communications
- Determinations and redeterminations for ABD Medicaid and MSP eligibility
Examples of promising practices
Several states exhibit promising practices related to the three stages noted above.
- New York sends Adult Group Medicaid recipients a letter three months before they turn 65; the letter explains the Medicare enrollment process and provides instructions for how individuals can qualify for ABD Medicaid and an MSP.
- Louisiana uses data-matching that allows the state to make preliminary determinations about ABD Medicaid and MSPs. The state then sends a notice to individuals alerting them not only of the termination of their Adult Group Medicaid, but also of their potential eligibility for other programs. The notice includes clear language about when the new benefits will begin.
- Connecticut includes an ABD Medicaid application and an MSP application with its notice regarding an individual’s upcoming ineligibility for Adult Group Medicaid. Connecticut also simplifies the redetermination process by allowing beneficiaries to align the redetermination dates for multiple benefits programs (Medicaid, MSP, and SNAP).
- Several states have used the flexibility offered by the Centers for Medicare & Medicaid Services (CMS) to eliminate asset tests in MSPs and/or increase the income eligibility thresholds, enabling a smoother transition from Adult Group Medicaid to these programs.
Nevertheless, numerous challenges persist in ensuring seamless transitions for Adult Group Medicaid beneficiaries enrolling in Medicare, including:
- IT systems issues
- The inability to easily identify Medicare eligibility date for persons with disabilities
- Delivering timely communications to beneficiaries and ensuring they can read and understand them, and
- Incorrect determinations and short redetermination periods.
The current health care debate has led to doubt about the long-term prospects for Adult Group Medicaid and may also affected how states have prioritized issues with this population. It is also clear that some systemic issues do not have an easy solution.
However, the many promising practices that Medicare Rights identified when talking to states is cause for optimism that states can learn from one another and take small steps toward improving transitions from Adult Group Medicaid to Medicare. The population depending on Medicare and Medicaid continues to grow, and improvements made now will benefit individuals and their families for decades to come.
Are you in a state that expanded Medicaid? What challenges have you faced as people age into Medicare? Share your thoughts in the comments.