Governor Baker, Advocates Celebrate Expanded Eligibility for Medicare Savings Program

Governor Charlie Baker joined Health and Human Services Secretary Marylou Sudders and leaders of health care advocacy organizations on September 16th for a ceremonial signing of key sections of the Fiscal Year 2020 (FY20) budget that aim to create health care savings for individuals and the Commonwealth.

The ceremonial bill signing marked the enactment of two sections of the FY 2020 budget: (1) reforms that allow MassHealth to directly negotiate with drug manufacturers, establishing enhanced accountability and transparency of drug prices and incorporating drug manufacturers into public processes similar to those that already exist for health care providers and health plans in Massachusetts; and (2) a measure that authorizes expanded eligibility for the Medicare Savings Program, which will bring more than $100 million in federal subsidies directly to roughly 40,000 low income older adults and people with disabilities to significantly reduce their health care costs.

Medicare Savings Program Changes

Through reforms proposed by the Baker-Polito Administration and enacted by the Legislature, the FY20 budget authorized expanded eligibility for the Medicare Savings Program.

The Medicare Savings Program (MSP), also known as “MassHealth Buy-In”, helps low-income older adults and people with disabilities pay for their health care costs. Under the MSP, MassHealth and the federal government share the cost of assisting older adults and people with disabilities with premiums and out-of-pocket costs in Medicare Parts A and B, which cover hospital and medical services. MSP participants also automatically qualify for federal subsidies for pharmacy coverage through Medicare Part D, which eliminate premiums, deductibles, and most cost-sharing.

Starting January 1, 2020, income eligibility will be expanded for the MSP program from 135% FPL to 165% FPL and the asset limit for MSP will be doubled. The expansion will significantly reduce Medicare costs for ~40,000 individuals, providing thousands of dollars in out-of-pocket savings on average per year to promote economic security.

The expansion generates over $100 million in federal subsidies that will flow directly to low income older adults and people with disabilities, with a new state investment of $7 million net annually ($4 million in FY20). The $100M in federal subsidies directly to older adults and individuals with disabilities comes from increasing the number of individuals eligible for federal Medicare Part D subsidies.

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