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Summary Model Legislation Analysis Q&A

Simplifying Access to the Medicare Savings Programs State Model Policy

Eliminate the Asset Test

Problem	Many older adults and people with disabilities skip medical care and struggle financially because of high Medicare premiums and cost sharing. By leveraging the Medicare Savings Programs, states can ease the financial strain of Medicare. However, confusing and time-consuming asset verification requirements delay or prevent many eligible individuals from enrolling.
Solution	Remove the asset test for the Medicare Savings Programs; determine eligibility solely by income.
Benefits for older adults and people with disabilities	Significantly reduce burdens. Improve health care access. Reduce financial strain. Reduce mortality.
Benefits for states	Significantly reduce administrative burden. Lower administrative costs. Increase automated (ex parte) renewal rates. Lower error rates.
State cost implications	Modest new Medicaid costs in initial years.

Summary

Medicare Savings Program (MSP) eligibility is limited to people with incomes near or below the poverty level. In most states, MSP applicants must also separately demonstrate having no more than $9,950 in countable assets (or $14,910 for a couple) in 2026 even though people with poverty-level income generally have limited assets.¹⁶ This asset test often requires extensive documentation.

As one advocate reported:

“The asset requirement is the biggest slowdown in the approval process. Income is, for many people, just their social security checks, so it’s very straightforward. It’s the assets that are a lot more complicated and intimidating.”¹⁷

The model state legislation below would effectively remove the asset test for the Qualified Medicare Beneficiary, Specified Low-Income Medicare Beneficiary, and Qualifying Individuals categories by disregarding the value of all assets, as permitted by section 1902(r)(2) of the Social Security Act.¹⁸ This model policy does not include the Qualified Disabled Working Individual category because states cannot disregard assets for this group, unlike other MSP categories.¹⁹

States must obtain federal approval for this policy, but the process is routine. It just requires a standard amendment to their State Medicaid Plan.

Where this model policy could apply:

As of the date of this publication, thirteen states—Alabama, Arizona, Connecticut, Delaware, Louisiana, Maine, Massachusetts, Mississippi, New Mexico, New York, Oregon, Vermont, and Washington—plus the District of Columbia have already removed the asset test for the MSPs.²⁰ As such, this specific option is only relevant in the remaining states.

History for this model policy:

First published: 05/11/2026

Modified: N/A

¹⁶ We use the term, “asset,” though the terms “assets” and “resources” are interchangeable.

¹⁷ Silberman, Susan, Rocki Basel, Jane Tavares, Marc A. Cohen, and Eileen J. Tell. Standing Back from the Medicare Cliff: Research and Policy Options to Help Low-Income Older Adults. National Council on Aging and LeadingAge LTSS Center @UMass Boston, 2024. https://assets.ncoa.org/ffacfe7d-10b6-0083-2632-604077fd4eca/467f43a0-d595-483b-8fdb-be068ab9cbbf/2024_Medicare_Cliff_Report.pdf.

¹⁸ SSI asset methodologies are used to determine asset eligibility for the MSPs, but states can apply less restrictive asset methodologies to the QMB, SLMB and QI categories under section 1902(r)(2) of the Social Security Act. States can effectively eliminate the asset test for the MSPs by disregarding all countable assets. Centers for Medicare & Medicaid Services (CMS), “Implementation Guide: Medicaid State Plan Eligibility Less Restrictive Resource Methodologies under 1902(r)(2),” Medicaid.gov, n.d., https://www.medicaid.gov/resources-for-states/downloads/macpro-ig-less-restrictive-resource-methodologies-1902r2.pdf.

¹⁹ CMS, “Implementation Guide: Medicaid State Plan Eligibility. Eligibility Groups – Mandatory Coverage Qualified Disabled and Working Individuals,” Medicaid.gov, n.d., https://www.medicaid.gov/resources-for-states/downloads/macpro-ig-qualified-disabled-and-working-individuals.pdf.

²⁰ In addition to the states that disregard all assets, two states have used authorities at section 1902(r)(2) of the Social Security Act to effectively increase the asset limits above the federal levels: California ($130,000 for an individual and an additional $65,000 for each household relative) and Minnesota ($10,000 for an individual and $18,000 for a couple). Rachel Gershon, “Final Rule to Streamline Enrollment in Medicare Savings Programs,” Justice in Aging, October 30, 2025, https://justiceinaging.org/final-rule-enrollment-in-medicare-savings-programs; “Asset Limits Frequently Asked Questions,” California Department of Health Care Services, https://www.dhcs.ca.gov/Medi-Cal/Pages/Help/asset-limits-faqs.aspx; “4.2.3.1 MSP Assets,” Minnesota Health Care Programs, Eligibility Policy Manual, 1: Minnesota Health Care Programs, section 4.2.3.1, September 1, 2016, https://hcopub.dhs.state.mn.us/epm/4_2_3_1.htm.

Model Legislative Text

WHEREAS the Medicare Savings Programs can save [state residents] thousands of dollars on health care expenses.

WHEREAS a substantial portion of eligible [state residents] have not yet enrolled in the Medicare Savings Programs.

WHEREAS eligibility for the Medicare Savings Programs is limited to individuals with low incomes.

WHEREAS providing documentation of certain types of asset values is difficult for many older adults and people with disabilities and can prevent eligible individuals from successfully applying for benefits.

WHEREAS numerous other states have already simplified access to the Medicare Savings Programs by eliminating asset tests.

BE IT ENACTED that:

[Agency or agency head] shall seek approval from the Centers for Medicare & Medicaid Services as necessary to simplify enrollment in the Medicare Savings Programs for [state residents] by disregarding all countable assets for the purpose of establishing eligibility for the Qualified Medicare Beneficiary, Specified Low-Income Beneficiary, and Qualifying Individuals eligibility groups, effective no later than [date].

Upon approval by the Centers for Medicare & Medicaid Services of the change, [agency or agency head] shall promptly:

Update state regulation, operational guidance, and eligibility and enrollment systems as necessary to implement the change, and
Revise notices, forms, and other communications as needed to remove reference to the asset test as a Medicare Savings Program eligibility requirement.

Nothing in this [legislation] is intended to require state expenditures that could not be federally matched as part of the Medicaid program.

Analysis

Primary effects:

Make the application process easier. Gathering paperwork to verify the value of assets like certain life insurance, farm equipment, and real property can take hours or even days, especially for people who lack comfort with modern technology or have cognitive impairments or limitations. This challenge may deter or prevent eligible individuals from applying.²¹ For people who successfully enroll, the same process often repeats each year during the required annual renewal of eligibility. Eliminating the asset test would save significant time and paperwork for older adults and people with disabilities who are only applying for MSP enrollment.²² While each person is different, we estimate that this policy would reduce the average time needed to complete each MSP application or renewal by four hours.

Help more eligible people get and keep benefits. Some individuals previously over the asset limit would newly qualify for the MSPs. However, individuals meeting the income limits for MSPs usually have minimal assets.²³ Many do not apply or are denied because they cannot obtain the necessary documentation to verify their assets (or lack thereof) due to the difficulty it presents.²⁴ Therefore, eliminating the asset test would enable more eligible individuals to qualify and retain benefits.²⁵ Each state is unique, but we estimate that overall MSP enrollment would increase by about 2% 12 months after and 5% 24 months after removing the asset test. The Qualifying Individuals (QI) category, which is fully federally funded, would undergo the largest percentage increase (9% by month 12, 23% by month 24). We estimate that Qualified Medicare Beneficiary (QMB) and Specified Low-Income Medicare Beneficiary (SLMB) enrollment would rise by about 1% by month 12 and 3% by month 24. For more on our estimates, see the technical notes in this section.

Improve access to treatment and save lives. The MSPs enable low-income Medicare beneficiaries to start treatment sooner²⁶ and better adhere to medical treatment.²⁷ New research links the loss of Medicaid coverage and, with it, Part D Extra Help, to higher death rates among low-income Medicare beneficiaries.²⁸ The evidence suggests, therefore, that simplifying access to the MSPs would save lives.

Reduce financial strain and support independence. The Medicare Part B premium ($202.90/month in 2026), usually withheld from Social Security checks, takes over 15% of the monthly income for those at or below the federal poverty level.²⁹ Enrolling in an MSP stops this deduction, letting individuals keep more income for essentials like food, rent, and utilities.³⁰ While the main benefit of eliminating the asset test is reducing an administrative barrier to enrollment, it also enables people to qualify without depleting their limited assets. This allows people to save for unexpected expenses (e.g., car repairs or hiring a plumber to fix a leak) or essential costs (e.g., home or vehicle modifications and medical equipment not covered by Medicare), helping older adults and people with disabilities remain active and self-sufficient.³¹

Reduce administrative burden and costs for states. Verifying assets is often time-consuming for the government eligibility workers who review MSP applications. Asset verification systems are intended to minimize paperwork and speed up eligibility determinations. However, challenges persist, including non-participation by some financial institutions, slow responses, lack of data on assets like life insurance, and inaccurate or outdated information. Further, states must pay extra fees to access information on assets beyond bank accounts, such as real property. Eliminating the asset test would facilitate faster eligibility determinations and support automated annual renewals (“ex parte renewals”), ultimately reducing administrative time and costs.³² While processing times vary by state, we estimate this policy would reduce eligibility worker processing time for each MSP application or renewal by 1.5 hours. In most states, this would generate over $1 million in annual administrative savings. For more on our estimates, see the technical notes in this section.

Increase benefit costs for states. Expanding enrollment would raise state spending on Medicare Part A and B premiums and cost sharing for QMBs and SLMBs. Each state’s circumstances are unique, but we estimate that the typical state’s spending on Medicare premiums and cost sharing for these MSP categories would increase by about 0.5% in the first full year of implementation and 3% by the end of the second year. At least half of the new costs would be federally funded at the standard FMAP rate.³³ For more on our estimates, see the technical notes in this section.

Other marginal effects:

Improve state performance on Medicaid eligibility-related metrics. The federal government estimates state-specific Medicaid eligibility-related improper payment rates. Most of what the federal government considers to be eligibility-related improper payment is attributable to state maintenance of insufficient documentation to demonstrate the beneficiary was eligible for Medicaid, not fraud or covering services for ineligible people.³⁴ For instance, if an eligibility worker doesn’t properly record beneficiary documents or electronic data used to verify the value of assets, subsequent Medicaid payments may be deemed improper. New federal law would apply financial penalties to states with eligibility-related error rates over 3%.³⁵ Under this model policy, states can reduce their risk of incurring these penalties because they would have fewer eligibility-related errors due to insufficient MSP asset documentation, as they would only need to verify income eligibility.

Help avoid higher costs and coverage disruptions when beneficiaries in the adult Medicaid expansion group switch to Medicare. Medicaid expansion doesn’t include an asset test, but when people switch to Medicare as their primary insurer at age 65, in most states they must prove their assets for the first time to qualify for Medicaid coverage of their Medicare costs under the MSPs. Since this process is unfamiliar and can be challenging, eligible individuals may end up paying premiums and other costs themselves, causing worse health and economic outcomes.³⁶ Removing the asset test would help prevent people from being denied MSP eligibility for procedural reasons during the transition from Medicaid to Medicare.

Bring additional federal funding into state and local economies. Increasing QI enrollment brings more federal funding into state and local economies, as states receive 100% federal funding to cover Part B premiums for QIs, who then have higher purchasing power when Part B premiums are no longer deducted from their Social Security checks.

Incur one-time state administrative costs. States would incur one-time costs to update eligibility systems, amend their State Medicaid Plan with the federal government, update related rules and guidance, and fulfill other administrative functions.

Potentially reduce state Medicaid costs for long-term services and supports. Increasing enrollment in the MSPs would likely enable more low-income Medicare beneficiaries to access the health care and community-based services that can minimize state Medicaid costs for more expensive long-term services and supports in the future. However, empirical evidence supporting this effect is limited.

There is a modest body of evidence related to this model policy. In this appendix, we discuss the evidence base and ways for state analysts to project state-specific impacts from this model policy.

Each state has a unique starting point. Therefore, the impacts of eliminating the asset test for the MSPs will vary by state, even after adjusting for differences in population. Nonetheless, we illustrate below the types and approximate scope of impacts on MSP enrollment, state benefit costs, and administrative burdens for states and MSP applicants.

Enrollment impacts

We estimate that, on average, eliminating the asset test for the MSPs would increase total MSP enrollment by an average of about 2% by month 12 and 5% by month 24 after eliminating the asset test. However, we expect the enrollment effects to vary by eligibility group. We estimate that the largest impact (in percentage terms) would be on QI enrollment (9% by month 12, 23% by month 24). We estimate that enrollment in QMB and SLMB would increase by about 1% by month 12 and 3% by month 24.

Our estimates stem from independent analysis of CMS administrative data⁴¹ on MSP enrollment in three states (Louisiana, Oregon, and Washington) that eliminated the MSP asset test in 2019, 2016, and 2023, respectively. We chose these three states because they eliminated the asset test relatively recently and had not adopted other MSP eligibility expansions, such as increasing the MSP income limits, during the same period that might confound the results.

We compared our results to previously published analysis from the AARP Public Policy Institute (PPI) and Mathematica. That analysis compared MSP enrollment changes in Louisiana and Oregon after elimination of the asset test relative to prior state enrollment trends, projected forward over the same period. (In contrast, our analysis compared post-policy enrollment to national enrollment changes during the same period.) The AARP/Mathematica analysis concluded that MSP enrollment initially declined in both states after implementation but began steadily increasing in year two. Enrollment rose by 14% in Louisiana after three years and by 10% in Oregon after six years, relative to earlier trends.⁴²

Both sources generally support our conclusion that increases in enrollment would be small in the first two years after eliminating the asset test for MSPs. The AARP/Mathematica report concluded that enrollment effects further increase over time. This is directionally plausible, although the methodology deployed in the AARP analysis should be taken with caution over a longer time horizon, since it rests on increasingly lengthy projections from pre-policy trends.

Benefit costs for states

The cost implications diverge from the enrollment effects in year one for two reasons. First, enrollment effects are greatest (in percentage terms) for the QI category, which is 100% federally funded. Therefore, there are no new state benefit costs for the QI category.

Second, we expect any increases in enrollment from eliminating the asset test to be evenly spread across the year because individuals apply and are determined eligible on a rolling basis throughout the year. As such, new enrollment attributable to the elimination of the asset test would have an average span of MSP enrollment that is less than six months in year one, or roughly half of the length of enrollment of other MSP beneficiaries in the same year. Therefore, we expect that a state’s total share of Medicaid expenditures for Medicare premiums and cost sharing for QMBs and SLMBs would grow by about 0.5% in year one, about half of the percentage increase in QMB and SLMB enrollment by the end of the year. This effect diminishes in future years, when costs would more closely reflect enrollment patterns.

Budget analysts should consider several variables when projecting benefit costs in individual states, including:

Their state’s standard FMAP rate, which determines the state and federal share of expenditures for Medicare Part A and B premiums and cost sharing for QMBs and Part B premiums for SLMBs. (QI is 100% federally funded in all states.)
The start date for a policy change may significantly affect the budget effects for the first state fiscal year. The fiscal impact for the state fiscal year is significantly lower if the policy change occurs midway through the fiscal year.
States that choose to (a) concurrently expand income-related eligibility standards for the MSPs and/or (b) also eliminate asset limits for full-benefit Medicaid will experience greater increases in enrollment and costs than by just removing the MSP asset test alone.

Administrative savings for states

Changes in administrative burden associated with this model policy depend on state deployment of an application specific to MSP enrollment (an MSP-only application). Numerous states have created MSP-only application forms, and these can be paper or electronic. These applications are usually much shorter and simpler than applications for other Medicaid eligibility categories for older adults or people with disabilities. Other states only offer a standard application process for all types of Medicaid, including the MSPs. In the latter circumstance, the application would still ask for information on assets, because even states that disregard assets for MSP enrollment still apply asset tests for other forms of Medicaid coverage for people on Medicare.

Any state can choose to offer an MSP-only application process, although states that have not already done so would incur one-time administrative costs.⁴³ The analysis and examples below apply in states with MSP-only application processes.

Initially, all states would incur one-time expenses when implementing this policy, including to update eligibility systems and, in some states, remove asset-related questions from MSP-specific application forms.⁴⁴ Over time, we expect substantial administrative savings from reducing state burden and other costs, as described below.

State burden reduction: Based on prior federal estimates regarding state burden associated with MSP application processes,⁴⁵ we estimate that, on average, this policy would save state eligibility workers 1.5 hours per MSP-only application (or annual eligibility renewal) by eliminating asset verification tasks (e.g., reviewing documents, checking electronic data, contacting applicants regarding missing or data discrepancies, and processing supplemental documents submitted by the individual).

The impact adds up. For example, for a hypothetical state with 200,000 MSP applications/renewals each year:⁴⁶

1.5 hours of time saved per MSP-only application
Multiplied by number of MSP-only applications/renewals in our hypothetical state, using the federal government’s assumption that 25% of MSP applicants use the MSP-only application (25% x 200,000 = 50,000)
Reduced state administrative burden: 75,000 hours per year (50,000 x 1.5 hours)

Building again on prior federal estimates⁴⁷ we estimate that the reduction in state burden would in turn save a hypothetical state with 200,000 MSP applications/renewals over $1.8m per year in state funds. Our calculations:

75,000 hours saved per state for eligibility workers
Multiplied by the mean hourly adjusted wage for state eligibility workers ($49.84/hour), based on the Bureau of Labor Statistics May 2023 report and inclusive of fringe benefits and other direct costs
Subtotal: $3,738,000 (75,000 hours x $49.84/hour)
Multiplied by a 50% federal matching rate for state administrative expenses
State share of savings on labor costs: $1,869,000 per year

Asset verification fees: States pay fees to private vendors that check MSP application data against electronic data sources (e.g., bank records). We are not aware of data on the average vendor fees for asset verification. However, this model policy would result in savings where states no longer need to pay these fees for MSP-only applications.

Limitations. Our estimates for new MSP benefit costs have not factored for any potential state spending effects from:

Changes in eligibility for full Medicaid (e.g., delays in becoming eligible for full Medicaid due to protection from Medicare cost sharing),
Changes in service utilization (e.g., potential delay in nursing facility placement due to having the financial resources to remain at home),
Reduced demand for state pharmaceutical assistance programs, due to MSP enrollment automatically conferring Part D Extra Help enrollment, or
Mortality risk associated with coverage (or loss thereof).

We also have not estimated effects from increased local economic activity due to:

Increases in spending power for Medicare beneficiaries (who newly have an extra $202.90/month in their Social Security checks after MSP enrollment), or
Additional federal funds entering the state.

Therefore, on net, our modeling above is likely a conservative representation of the net fiscal impact for a state.

Administrative burden reduction for MSP applicants

Burden reduction for new MSP applicants and MSP beneficiaries renewing their eligibility: The federal government has estimated that the average time to complete an MSP-only application and collect documentation related to assets is 4.5 hours, with approximately four of those hours specifically related to asset documentation,⁴⁸ including reading instructions, gathering documents, contacting institutions, traveling, copying, and submitting materials. As such, we estimate that this policy would save each applicant an average of four hours per year by removing asset-related aspects of the MSP application/renewal process.

²¹ CMS Office of Burden Reduction & Health Informatics, “Navigating the Medicare Savings Program (MSP) Eligibility Experience,” n.d., https://www.cms.gov/files/document/navigatingmedicare-savings-program-msp-eligibilityexperience-journey-map.pdf; Michael Perry, Susan Kannel, and Adrianne Dulio, “Barriers to Medicaid Enrollment for Low-Income Seniors: Focus Group Findings.” (The Kaiser Commission on Medicaid and the Uninsured, 2002), 18-19, https://files.kff.org/attachment/Barriers-to-Medicaid-Enrollment-for-Seniors-Findings-from-10-Focus-Groups-with-Low-Income-Seniors-Report; Kim Glaun, “Medicaid Programs to Assist Low-Income Medicare Beneficiaries: Medicare Savings Programs Case Study Findings” (The Kaiser Commission on Medicaid and the Uninsured, 2002), 14, https://www.kff.org/wp-content/uploads/2013/01/medicaid-programs-to-assist-low-income-medicare-beneficiaries-medicare-savings-programs-case-study-findings-background-paper.pdf#:~:text=The%20Medicare%20Savings%20Programs%20asset%20limits%20are,and%20causes%20additional%20paperwork%20for%20state%20agencies.

²² See, for example, “Navigating the Medicare Savings Program Eligibility Experience;” Silberman et al., Standing Back from the Cliff; Glaun, Medicaid Programs to Assist Low-Income Medicare Beneficiaries: Medicare Savings Programs Case Study Findings; Laura Summer and Lee Thompson, How Asset Tests Block Low-Income Medicare Beneficiaries from Needed Benefits (The Commonwealth Fund, 2004), https://www.commonwealthfund.org/publications/issue-briefs/2004/may/how-asset-tests-block-low-income-medicare-beneficiaries-needed. Note that reductions in burdens may be more limited if applicants need to submit asset information when applying through integrated applications for MSP, full-benefit Medicaid, or programs like the Supplemental Nutrition Assistance Program (SNAP).

²³ AARP Public Policy Institute analysis shows most income-eligible individuals possess assets below MSP limits, with values remaining stable. Oliver, Tobey, Wenjia Zhu, Erin Weir Lakhmani, and Matt Niedzwiecki. Medicare Savings Programs: Most Who Are Eligible Hold Few Assets. AARP Public Policy Institute, 2026, https://www.aarp.org/content/dam/aarp/ppi/topics/health/coverage-access/medicare-savings-programs-most-who-are-eligible-hold-few-assets.doi.10.26419-2fppi.00406.001.pdf. According to another study, in 2020, individuals age 60 or older with a median income of $19,560 had zero net assets. Jane Tavares et al., The 80%: Low-Income Older Adults Die 9 Years Earlier than Those with Greatest Wealth (National Council on Aging, LeadingAge LTSS Center @UMass Boston, 2025), https://assets.ncoa.org/ffacfe7d-10b6-0083-2632-604077fd4eca/df44501b-7c8e-43ac-8e12-2373288f71d4/2025_80_Percent_Report.pdf. See also, Increasing the Rate of Ex Parte Renewals; Alex Cottrill et al., “Income and Assets of Medicare Beneficiaries in 2024,” KFF, August 25, 2025, https://www.kff.org/medicare/income-and-assets-of-medicare-beneficiaries.

²⁴ See, for example, Increasing the Rate of Ex Parte Renewals (MACPAC, Sept. 2023), 5-6, https://www.macpac.gov/wp-content/uploads/2023/09/Increasing-the-Rate-of-Ex-Parte-Renewals-Brief.pdf; CMS Office of Burden Reduction & Health Informatics. “Navigating the Medicare Savings Program (MSP) Eligibility Experience.” Centers for Medicare & Medicaid Services, April 2022. https://www.cms.gov/files/document/navigating-medicare-savings-program-msp-eligibility-experience-journey-map.pdf.

²⁵ See Oliver, Tobey, Wenjia Zhu, Erin Weir Lakhmani, and Andrea Wysocki. Medicare Savings Program Enrollment Increases When States Expand Financial Eligibility Criteria. AARP Public Policy Institute, 2023. https://www.aarp.org/content/dam/aarp/ppi/topics/health/coverage-access/medicare-savings-program-enrollment-increases.doi.10.26419-2Fppi.00210.001.pdf; Summer and Thompson, How Asset Tests Block Low-Income Medicare Beneficiaries from Needed Benefits (The Commonwealth Fund, 2004); Glaun, Medicaid Programs to Assist Low-Income Medicare Beneficiaries: Medicare Savings Programs Case Study Findings. Coverage gains may be tempered if applicants must provide asset information when applying through integrated applications for MSP, full-benefit Medicaid, or programs like the Supplemental Nutrition Assistance Program (SNAP).

²⁶ Alex D. Federman et al., “Avoidance Of Health Care Services Because Of Cost: Impact Of The Medicare Savings Program,” Health Affairs 24, no. 1 (2005): 263-70, https://doi.org/10.1377/hlthaff.24.1.263.

²⁷ Yi-Ting Chou et al., “The Association Between Medicare Low-Income Subsidy and Anticancer Treatment Uptake in Advanced Lung Cancer,” Journal of the National Cancer Institute 112, no. 6 (2020): 637-46, https://doi.org/10.1093/jnci/djz183.

²⁸ Eric T. Roberts et al., “Loss of Subsidized Drug Coverage and Mortality among Medicare Beneficiaries,” New England Journal of Medicine 392, no. 20 (2025): 2025-34, https://doi.org/10.1056/NEJMsa2414435.

²⁹ In 2026, the federal poverty level is $1,330 per month. The Part B premium of $202.90 is over 15% of that amount. See U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, “2026 Poverty Guidelines: 48 Contiguous States (All States except Alaska and Hawaii),” 2026, https://aspe.hhs.gov/sites/default/files/documents/b1bfa16b20ae9b89d525bc35de7c1643/detailed-guidelines-2026.pdf; Centers for Medicare & Medicaid Services (CMS), “2026 Medicare Parts A & B Premiums and Deductibles,” Nov. 14, 2025, https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles.

³⁰ In 2023, more than one in four Medicare beneficiaries indicated health expenses made it harder for them to afford food and utility bills in the past 12 months. Additionally, research suggests that expanding eligibility for Medicaid coverage of Medicare premiums and cost sharing could mitigate racial and economic disparities among low-income Medicare beneficiaries. See Gretchen Jacobson et al., “Can Medicare Beneficiaries Afford Their Health Care?,” October 2023, https://www.commonwealthfund.org/sites/default/files/2023-10/PDF_Jacobson_can_medicare_beneficiaries_afford_health_care_2023_survey_chartpack_final.pdf; Eric T. Roberts et al., “Racial and Ethnic Disparities in Health Care Use and Access Associated With Loss of Medicaid Supplemental Insurance Eligibility Above the Federal Poverty Level,” JAMA Internal Medicine 183, no. 6 (2023): 534-43, https://doi.org/10.1001/jamainternmed.2023.0512.

³¹ See Amber Christ et al., Expanding Health Care Affordability for Older Adults and People with Disabilities: A Guide for State Medicaid Advocates (Justice in Aging, 2022), 5-6, https://justiceinaging.org/wp-content/uploads/2022/03/Expanding-Health-Care-Affordability.pdf; Kathleen Romig, et al., “The Case for Updating the SSI Asset Limits: Raising or Eliminating Limits Would Reduce Administrative Burdens Without Dramatically Increasing Enrollment,” Center on Budget and Policy Priorities, September 2023, 8, https://www.cbpp.org/sites/default/files/6-26-23socsec.pdf.

³² See Increasing the Rate of Ex Parte Renewals; Farah Erzouki and Jennifer Wagner, Using Asset Verification Systems to Streamline Medicaid Determinations (Center on Budget and Policy Priorities, June 23, 2021), 5-6, https://www.cbpp.org/sites/default/files/6-23-21health.pdf; State Compliance with Electronic Asset Verification Requirements (Medicaid and CHIP Payment and Access Commission (MACPAC), 2020), https://www.macpac.gov/wp-content/uploads/2020/10/State-Compliance-with-Electronic-Asset-Verification-Requirements.pdf; “Navigating the Medicare Savings Program (MSP) Eligibility Experience;”Oliver et al., Medicare Savings Programs: Most Who Are Eligible Hold Few Assets.

³³ CMS, “Chapter 1: Program Overview and Policy,” Manual for the State Payment of Medicare Premiums, Pub. 100-24, section 1.9, https://www.cms.gov/files/document/chapter-1-program-overview-and-policy.pdf.

³⁴ According to CMS, in 2025 about 60% of eligibility-related payment errors stemmed from insufficient documentation of eligibility. CMS, “2025 Medicaid & CHIP Supplemental Improper Payment Data,” January 2026, https://www.cms.gov/files/document/2025-medicaid-chip-supplemental-improper-payment-data.pdf.

³⁵ CMS, Working Families ‘Tax Cut’ Legislation, Public Law 119-21: Summary of Medicaid and Children’s Health Insurance Program (CHIP) Related Provisions, CMCS Informational Bulletin, November 18, 2025, 7, https://www.medicaid.gov/federal-policy-guidance/downloads/cib11182025.pdf.

³⁶ New research found that loss of Medicaid after Medicare eligibility leads to worse health, increased mortality, higher out-of-pocket expenses, and less use of preventive care compared to those who retained Medicaid or regained it after a temporary loss. Maryssa Pallis et al., “Long-Term Changes in Health Care Use and Outcomes Among Groups Maintaining Versus Losing Medicaid Upon Medicare Enrollment,” Milbank Quarterly, 104, no. 2 (February 27, 2026): 7-15, https://doi.org/10.1111/1468-0009.70076. See also, Silberman et al., Standing Back from the Cliff.

⁴¹ “MMCO Statistical & Analytic Reports | CMS,” March 4, 2026, https://www.cms.gov/data-research/research/statistical-resources-dually-eligible-beneficiaries/mmco-statistical-analytic-reports.

⁴² Tobey Oliver et al., Medicare Savings Program Enrollment Increases When States Expand Financial Eligibility Criteria (AARP Public Policy Institute, 2023), https://www.aarp.org/content/dam/aarp/ppi/topics/health/coverage-access/medicare-savings-program-enrollment-increases.doi.10.26419-2Fppi.00210.001.pdf.

⁴³ The federal government has estimated that creating a new MSP-only application process would cost each state about $12,300 in state funds. “CMS-10891, Medicaid Program; Medicare Savings Program Application and Eligibility Determinations,” CMS.gov, November 27, 2024, https://www.cms.gov/medicare/regulations-guidance/legislation/paperwork-reduction-act-1995/pra-listing/cms-10891.

⁴⁴ We examined federal estimates of state burden for other one-time Medicaid eligibility changes that include similar tasks as would be necessary to implement this model legislation (e.g., updating state policy documents, revising application forms, and modifying eligibility systems). Two recent examples estimated one-time state costs (i.e., not including any federal match) of less than $20,000. Even if one-time costs in a given state are multiple times higher than this federal estimate, the one-time cost in a typical state would still be far less than the labor savings associated with removing the asset test.

⁴⁵ CMS.gov, “CMS-10891, Medicaid Program; Medicare Savings Program Application and Eligibility Determinations.”

⁴⁶ This is hypothetical, but it’s around the state average, considering the national MSP beneficiary count (about 10 million) over 51 states plus DC.

⁴⁷ CMS.gov, “CMS-10891, Medicaid Program; Medicare Savings Program Application and Eligibility Determinations.”

⁴⁸ CMS.gov, “CMS-10891, Medicaid Program; Medicare Savings Program Application and Eligibility Determinations.”

Questions & Answers

For over two decades, advocates, researchers, and policymakers have cited the MSP asset test as a major barrier to enrollment for eligible beneficiaries. Interviews with beneficiaries, caregivers, and Medicare counselors reveal that the asset test can discourage eligible individuals from applying. As one older adult explained:

“I think a great amount of this problem is … you feel kind of alone in filling out the paperwork and it just really is so intimidating. It’s easy enough to just say, ‘Well, I’ll do it tomorrow or whatever,’ and you try again and then you go, ‘forget it’.”³⁷

Thirteen states and the District of Columbia eliminated the asset test to reduce these obstacles.

Costs result in stress and foregone health care at an immense scale. Consider:

36% of Medicare beneficiaries report delaying or going without health care services in the last year because of the cost.³⁸
41% of callers to the Medicare Rights Center National Helpline had questions about Medicare affordability.³⁹
Cost issues are especially acute for people with disabilities. More than one in three people with Medicare under age 65 with disabilities report they had a problem paying a medical bill in the past 12 months (35%), compared to one in ten (9%) of those 65 or older.⁴⁰

The MSPs are the most direct, immediate, and impactful mechanisms for reducing costs for eligible Medicare beneficiaries.

This option addresses a major barrier to MSP enrollment and retention for eligible individuals, making it easier for older adults and people with disabilities to enroll, while also reducing administrative burdens for states.

It’s improbable, as MSPs require very limited income to qualify, and individuals near the poverty level usually have few assets. Wealthier people often receive higher social security retirement income, and/or may earn interest and dividend income, often putting them over the MSP income limit.

Yes. States can use the same authorities under section 1902(r)(2) of the Social Security Act to disregard certain asset amounts (essentially increasing the asset limit above the federal level) or to disregard certain categories of assets, such as non-liquid assets or the cash value of life insurance. (See the separate model policy to simplify eligibility by disregarding the value of non-liquid assets.)

The change would likely require short-term policy and operational steps to communicate the changes to the public, update eligibility systems, amend the State Medicaid Plan, and update manuals, related rules, and guidance.

We omit QDWIs because, unlike other Medicare Savings Program categories, federal law does not permit states to disregard assets for QDWIs. The policy includes the QMB, SLMB, and QI categories because federal rules permit asset disregards for these categories.

This is a policy decision for each state. Our model legislation applies to the QMB, SLMB, and QI eligibility groups, but a state can choose to apply the policy to other eligibility groups (although not QDWI). Applying the change only to the MSP eligibility groups costs less than also applying it to additional Medicaid eligibility groups but benefits fewer people, and applicants would still need to document the value of their assets if they are seeking full Medicaid coverage.

³⁷ Michael Perry, Susan Kannel, and Adrianne Dulio, “Barriers to Medicaid Enrollment for Low-Income Seniors: Focus Group Findings.” (The Kaiser Commission on Medicaid and the Uninsured, 2002), 18-19, https://files.kff.org/attachment/Barriers-to-Medicaid-Enrollment-for-Seniors-Findings-from-10-Focus-Groups-with-Low-Income-Seniors-Report.

³⁸ Karen Pollitz et al., “KFF Survey of Consumer Experiences with Health Insurance,” KFF, June 15, 2023, https://www.kff.org/affordable-care-act/kff-survey-of-consumer-experiences-with-health-insurance.

³⁹ Sarah Murdoch et al., Medicare Trends and Recommendations (Medicare Rights Center, 2025), https://www.medicarerights.org/pdf/2023-helpline-trends-report.pdf.

⁴⁰ Juliette Cubanski et al., “Overall Satisfaction with Medicare Is High, But Beneficiaries Under Age 65 With Disabilities Experience More Insurance Problems Than Older Beneficiaries,” KFF, October 26, 2023, https://www.kff.org/medicare/overall-satisfaction-with-medicare-is-high-but-beneficiaries-under-age-65-with-disabilities-experience-more-insurance-problems-than-older-beneficiaries.

Technical input, corrections, and implementation insights related to this policy set are welcome.

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