| Problem | Proving the value of non-liquid assets—like extra land, farm equipment, or second vehicles—is challenging and time consuming, preventing or delaying Medicare Savings Program (MSP) enrollment, especially in rural areas. Verifying non-liquid assets is especially burdensome and costly for states. |
| Solution | Exclude non-liquid assets from the MSP asset test. |
| Benefits for older adults and people with disabilities |
|
| Benefits for states |
|
| State cost implications | Minimal new Medicaid costs. |
Open for Public Comment
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Simplifying Access to the Medicare Savings Programs
State Model Policy
Simplify Eligibility by Disregarding the Value of Non-Liquid Assets
Summary
The model state legislation below would simplify eligibility for the Medicare Savings Programs (MSPs) by disregarding the value of non-liquid assets98—such as farm equipment or land separate from an individual’s primary residence—as permitted by section 1902(r)(2) of the Social Security Act.
Proving the value of non-liquid assets is challenging and time consuming. It prevents or delays MSP enrollment, especially in rural areas. As a beneficiary counselor at a social services organization explains:
“…Getting approved can be an issue, especially farm families, because you’re looking at tens of thousands of dollars worth of equipment, which will make you ineligible, that you no longer use that’s sitting in the barn. Some of these, a tractor will cost you more than a house, but it doesn’t do you any good when you’re hungry, or you’re cold, or you need in-home care. That’s a huge thing…. Yeah, you could sell it, but you’re not gonna get what it’s worth…”99
The policy would apply to three MSP eligibility categories: Qualified Medicare Beneficiary (QMB), Specified Low-Income Beneficiary (SLMB), and Qualifying Individuals (QI).100 This model policy does not include Qualified Disabled Working Individuals (QDWI) because states cannot disregard assets for this category, unlike other MSP categories.101
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 this publication, we are not aware of states with an asset test that have specifically excluded all non-liquid assets.102
However, 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 limit for the MSPs entirely.103 As such, this specific option is only relevant in the remaining states.
History for this model policy:
First published: 05/11/2026 (draft)
Modified: N/A
98 We use the term, “asset,” though the terms “assets” and “resources” are interchangeable.
99 “‘Jennifer’ #10,” The People Say, 2025, https://thepeoplesay.org/data/show/Jennifer-10.
100 Under SSI asset methodologies used to determine asset eligibility for the MSPs, states exclude the value of certain non-liquid assets like a primary residence and one car for the MSPs. Under section 1902(r)(2) of the Act, states can disregard all countable non-liquid assets for Qualified Medicare Beneficiaries, Specified Low-Income Beneficiaries, and Qualifying Individuals. See 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. CMS, “Implementation Guide: Medicaid State Plan Eligibility. Eligibility Groups – Mandatory Coverage: Qualified Disabled Working Individuals,” Medicaid.gov, n.d., https://www.medicaid.gov/resources-for-states/downloads/macpro-ig-qualified-disabled-and-working-individuals.pdf.
101 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.
102 At least three states with asset tests (Rhode Island, South Carolina, and Wyoming) disregard certain types of non-liquid assets. 210 R.I. Code R. § 40-00-3 3.55(A)(1)(d) (2025); South Carolina Department of Health and Human Services, Medicaid Policy and Procedures Manual, Eligibility, section 302.05, n.d., https://img1.scdhhs.gov/mppm/; Wyoming Department of Health, Eligibility Online Manual, Table 8, e.g., Recreational Vehicles, Vehicles- Licensed, Vehicles-Unlicensed, Jan. 2026, https://ecom.wyo.gov/tables/table8.
103 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, 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 complexity of application processes often impedes otherwise eligible individuals from accessing supports for which they are eligible.
WHEREAS certain types of assets are particularly difficult to sell and require extensive work to document a fair market value.
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 the value of non-liquid assets as defined at 20 CFR 416.1201(c) 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 and operational guidance, as necessary to implement the change.
Nothing in this [legislation] is intended to require state expenditures that would not be federally matched as part of the Medicaid program.
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 communications as needed to reflect that non-liquid assets do not count for Medicare Savings Program eligibility.
Analysis
Primary effects:
Make the application process easier, especially for people in rural areas. Determining and documenting the fair market value of non-liquid assets—such as real estate (other than the primary home), farm machinery, livestock, or second vehicles—is difficult and time-consuming for beneficiaries, especially for people without reliable internet or who lack comfort with technology and those with cognitive impairments or limited mobility. These challenges can discourage or prevent eligible individuals from successfully completing applications104 and may be most prevalent in rural areas where households are more likely to own non-liquid assets.105 This option would ease enrollment barriers by eliminating time and paperwork for income-eligible older adults and people with disabilities.106
Reduce administrative burden and costs for states. Eligibility workers often spend significant time verifying and valuing non-liquid assets because asset verification systems frequently lack up-to-date or detailed information—such as item condition or equity—leading to discrepancies with applicant reports and additional requests for information. Disregarding the value of these assets would help to streamline initial state eligibility decisions and support automated annual renewals (“ex parte renewals”), ultimately reducing administrative time and costs.107
Other marginal effects:
Help more eligible people get and keep benefits, especially those in rural areas. Disregarding non-liquid assets would allow more people, especially in rural areas, to enroll in and keep MSP benefits, including those previously ineligible or unable to document asset values.
Better align the Medicare subsidy programs. This change would better align MSP asset rules with Part D Extra Help, which already excludes the value of certain non-liquid assets.108 If other eligibility policies were similarly aligned, states could better use Part D application data for Medicare Savings Program applications, thus reducing paperwork burdens for applicants, their families, and state eligibility workers.
Slightly increase benefit costs for states. This policy would minimally increase state outlays for Medicare Part A and B premiums and cost sharing.109 At least half of the new costs would be federally funded at the state’s standard Federal Matching Assistance Percentage rate.
Improve access to treatment and save lives.110 MSPs enable low-income Medicare beneficiaries to start treatment sooner.111 New research links the loss of Medicaid coverage and, with it, Part D Extra Help to higher death rates among low-income Medicare beneficiaries.112 The evidence suggests, therefore, that simplifying access to the MSPs would save lives. As one daughter caring for her father attested:
“My dad, he’s worked hard all of his life. There’s a lot of farmers out there that, when it comes to retirement, they don’t end up with a whole lot. There’s not just him out there. I know a lot of ’em, elderly people that are just barely getting by. If it wasn’t for the Medicaid or the Medicare, they would; they would totally be homeless or they would just die because they wouldn’t have the money for medication.”113
Reduce financial strain and support independence. Expanding access to MSPs can improve the economic security and independence of older adults and people with disabilities with limited incomes. The Medicare Part B premium ($202.90/month in 2026) is usually withheld from Social Security checks, taking more than 15% of the monthly income of an individual living at or below the federal poverty level.114 Enrolling in an MSP stops this deduction, enabling individuals to keep more of their income for food, rent, utilities, and other necessities.115
Require short-term state administrative costs. The change would likely require short-term policy and operational investments to update eligibility systems, amend the State Medicaid Plan, and update manuals and related rules and guidance.
104 See, for example, The People Say, “‘Jennifer’ #10”; “‘Rebecca #06,” The People Say, 2024, https://thepeoplesay.org/data/show/Rebecca-06. See also, 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 J. Perry et al., Barriers to Medicaid Enrollment for Low-Income Seniors: Focus Group Findings (The Kaiser Commission on Medicaid and the Uninsured, 2002), 18-19; 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.
105 Feedback from State Health Insurance Assistance Program directors in states with large rural populations suggests that challenges with non-liquid resources are more common in rural areas. Also, rural residents are generally more likely to own non-liquid assets than their counterparts in metro areas. Mathieu R. Despard et al., “Material Hardship among Lower-Income Households: The Role of Liquid Assets and Place,” Journal of Poverty 26, no. 5 (2022): 361-84, https://doi.org/10.1080/10875549.2021.1925801; Monica Fisher and Bruce A. Weber, “Does Economic Vulnerability Depend on Place of Residence? Asset Poverty across Metropolitan and Nonmetropolitan Areas,” Review of Regional Studies 34, no. 2 (2004), https://doi.org/10.52324/001c.8381; Lutheran Services in America. “Rural Voices Shaping Transformation – Policy Recommendations.” https://lutheranservices.org/rural-voices/?utm_medium=email&_hsenc=p2ANqtz-9Gl2h4f6HqNxwpgfJEfhWZf5cF3OIrmStmOKJ-EXkq-hH8ebOuZiXklC28fSm69x7EYJlAfHuvc5kcpRgNP4MGkC8ToogrvGTSAKoSbMfYFFtFgtQ&_hsmi=411335418&utm_content=411335418&utm_source=hs_automation#page3:~:text=PEOPLE%20AND%20CONTEXT-,POLICY%20RECOMMENDATIONS,-LOOKING%20FORWARD
106 See, for example, “Navigating the Medicare Savings Program Eligibility Experience”; 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; Glaun, Medicaid Programs to Assist Low-Income Medicare Beneficiaries: Medicare Savings Programs Case Study Findings; Summer, Laura, 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).
107 See, for example, “Navigating the Medicare Savings Program Eligibility Experience;” Susan Silberman et al., Standing Back from the Medicare Cliff, 10-12; Oliver, Tobey, Wenjia Zhu, Erin Weir Lakhmani, and Matt Niedzwiecki. Medicare Savings Programs: Most Who Are Eligible Hold Few Assets. AARP Public Policy Institute, April 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; Glaun, Medicaid Programs to Assist Low-Income Medicare Beneficiaries, 15; Summer and Thompson, How Asset Tests Block Low-Income Medicare Beneficiaries from Needed Benefits, 6-9.
108 LIS disregards all non-liquid assets, except for the equity value of any real property that is not connected to the primary residence. 20 CFR 418.3425(b).
109 We are unaware of authoritative data on non-liquid assets among Medicare beneficiaries, but reports from State Health Insurance Assistance Programs suggest that challenges documenting the value of such assets are infrequent—even as they are extremely problematic for the affected individuals when they do arise. As noted above, most income-eligible individuals possess few assets overall. As such, we anticipate a slight increase in enrollment and state costs for Medicare premiums and cost sharing, and a slight decrease in administrative costs, though the net effects will differ by state. Individual states may have data on denials linked to non-liquid assets to help inform their cost projections.
110 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.
111 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.
112 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.
113 “‘Tiffany’ Transcript,” The People Say, 2025, https://thepeoplesay.org/transcripts/show/tiffany-july-2025.
114 See 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; CMS, “Chapter 1: Program Overview and Policy,” Manual for the State Payment of Medicare Premiums, Pub. 100-24, section 1.2, https://www.cms.gov/files/document/chapter-1-program-overview-and-policy.pdf.
115 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.
Questions & Answers
In certain cases, selling real estate is not an option:116 for example, if an ex-spouse refuses to cooperate with the sale of a co-owned cottage, if an individual inherited their parent’s home with four siblings and sale requires unanimous agreement, or a remote plot of land lacks interested buyers. States count the equity value of property and may exclude real estate considered unavailable. However, unless individuals provide proof—such as the amount still owed on a mortgage, an alternate appraisal, or evidence of attempts to sell—the state will count the asset’s fair market value by default.117 These complexities can keep otherwise-eligible individuals from enrolling in the MSPs and increase administrative work for states.
This is a relatively low-cost option that improves access to the MSPs while reducing administrative burden for applicants and state workers.
We omit QDWIs because, unlike other MSP 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.
While possible, people already spend down to MSP asset limits with excluded expenses like home improvements. If someone were attempting to “hide” assets to gain MSP eligibility, it is unlikely they’d buy items like vehicles or equipment that quickly lose value or land that can create issues if they later need Medicaid long-term services and supports.
This model policy excludes all non-liquid assets from the asset test, while Part D Extra Help excludes all except certain real estate. Thus, the policies are similar but not identical.
Yes. States may use the same authorities under section 1902(r)(2) of the Social Security Act to exclude specific non-liquid assets. At least three states—Rhode Island, South Carolina, and Wyoming—already do so.
The change would likely require short-term policy and operational investments to update eligibility systems, including amending the State Medicaid Plan, and updating manuals and related rules and guidance.
116 See Joseph Shapiro, “These Disabled People Tried to Play by the Rules. It Cost Them Their Federal Benefits,” Investigations, NPR, June 8, 2024, https://www.npr.org/2024/06/08/g-s1-3475/social-security-ssi-asset-limits.
117 See e.g., Social Security Administration, Program Operations Manual System (POMS), SI 01140.100 Non-home real property (NHRP) at https://secure.ssa.gov/poms.nsf/lnx/0501140100 and
SI 01130.140 Real Property Following Reasonable but Unsuccessful Efforts to Sell It Throughout a 9-Month Period of Conditional Benefits at https://secure.ssa.gov/poms.nsf/lnx/0501130140.
Technical input, corrections, and implementation insights related to this policy set are welcome.
Provide FeedbackRelated Policies
Eliminate the Asset Test
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.
Open for
Comment
Comment
Flatten the Benefit Cliff from Medicaid to Medicare
Enrolling in Medicare results in many people losing Medicaid and facing much higher out-of-pocket costs. These costs amount to a financial shock—a problem known as the “Medicare cliff.”
Open for
Comment
Comment
End the MSP Family Caregiver Penalty
Most states only include the applicant and their spouse to calculate eligibility for the Medicare Savings Programs (MSPs). This means caregivers—such as grandparents raising grandchildren or parents with dependent adult children—can only qualify for the MSPs at lower incomes (relative to the federal poverty level) than non-caregivers. We refer to this as the “MSP family caregiver penalty.”
Open for
Comment
Comment