A “modest” increase in Medicaid asset limits can increase eligibility for seniors at risk

December 29, 2021

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This study was supported by the Agency for Health Research and Quality.

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Raising wealth limits for low-income Medicare beneficiaries seeking Medicaid supplemental coverage, which has remained unchanged in many states for 30 years, could increase eligibility by as much as 7.5%, researchers say.

Going further, replacing the asset test with a “High Wealth Category Test” and thus giving all Medicare low-income beneficiaries who lack investments, second homes or businesses the opportunity to qualify would qualify for Medicaid Population will rise by 20.5%, they added. The researchers – from the University of Pittsburgh, Tufts University, and the College of William & Mary – published these and other recommendations in Health Affairs.

Raising wealth limits for low-income Medicare beneficiaries seeking Medicaid supplemental coverage, which has remained unchanged in many states for 30 years, could increase eligibility by as much as 7.5%, researchers say. Source: Adobe Stock.

“For many low-income seniors, supplemental medication coverage is critical as the out-of-pocket expenses for Medicare can be high and seniors may have to decide whether to spend their limited income on medical care or other essential expenses.” Noelle Cornelius a graduate student at the University of Pittsburgh Graduate School of Public Health and lead author of the article told Healio Rheumatology. “The medical wealth caps for the low-income elderly are low and have not been updated since 1989, making eligibility requirements more restrictive over time as inflation continues to rise.”

According to Cornelio and colleagues, around 8.7 million low-income elderly or disabled Medicare benefit recipients also participate in Medicaid with full benefits. This additional Medicaid coverage is used to pay for Medicare premiums, co-payments, and other services, including visual and dental care.

Noelle Cornelius

However, in order to receive Medicaid insurance, Medicare beneficiaries must first undergo a wealth test, which limits eligibility by capping the value of the beneficiary’s assets. In most states, that limit was set at $ 2,000 for an individual and $ 3,000 for a couple in 1989, and has stayed the same since then, the researchers said.

Adjusted for inflation, that $ 2,000 in 1989 is worth less than $ 900 today.

To explore how an alternative wealth test might affect Medicaid eligibility for low-income Medicare beneficiaries, Sabik and colleagues looked at income and wealth tests in all states from 2006 to 2018. The team interviewed state Medicaid insurance companies. Administrators and created a database in which each was compiled rules of the state. They also analyzed similar programs, current policy proposals and possible solutions to improve the current system.

Based on their research, the authors suggested four possible solutions:

• Update the wealth test based on inflation rates since its inception in 1989, which would increase Medicaid full eligibility among Medicare beneficiaries by 1.7%.
• Compare the Medicaid Asset Test to other federal programs with similar tests that are roughly $ 7,280 for individuals and $ 10,930 for couples. This would increase eligibility by 4.4% and target people who are more likely to be ignorant and report poorer health, the researchers said.
• Increase in wealth limit to $ 10,000 for individuals and $ 20,000 for couples, as proposed in the Supplemental Security Income Restoration Act of 2019. This would increase eligibility by 7.5% and again cover people who are less likely to be white and in poorer health.
• Replace the asset test with a High Wealth Category Test, which allows all low-income Medicare members who do not own investments, second homes, or businesses to qualify. This would increase eligibility by more than 20.5% for a population that is demographically similar to their lower-income peers who would fail a high net worth test on their net worth.

According to the researchers, states could also consider doing without wealth tests altogether. This policy, currently practiced in Arizona and being adopted in California, would increase full Medicaid eligibility by nearly 31%, they said.

“The goal of asset restrictions is to limit the benefits of Medicaid to a population with limited resources,” said Cornelio. “However, most low-income seniors have few or no assets. While 60% of seniors who meet both Medicaid income and wealth limits have no net worth, 50% of seniors who meet the income limit but not the wealth limit had net worth less than $ 50,000. Gradually increasing the Medicaid asset limits could not significantly increase the number of newly eligible Medicaid beneficiaries, but would target specific populations, including minorities and those in poor health.

“We found that seniors in poor health were more likely to benefit from modest increases in Medicaid asset limits,” she added. “This finding is significant as an increase in the Medicaid asset limit will benefit low-income seniors who often forego required care, which could ultimately lead to serious health problems and more expensive care.”

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