Governor proposes asset test for Medicare Savings Program
Before 84-year-old Natalie Torranto qualified for the state’s Medicare Savings Program three years ago, the former nurse used to skip her chemotherapy pills every other day.
Now the program covers her health care premiums and her leukemia drugs, which cost more than $600 a month. The Easton resident doesn’t have to decide between paying for her medication and buying vegetables at the market, she said.
But Torranto is worried. Connecticut lawmakers will soon decide if they want to remove this assistance from about 18,000 elderly residents, as Gov. Ned Lamont’s budget proposes doing.
The cut would save the state $25.6 million in fiscal year 2021. It’s one of very few reductions in Lamont’s budget and by no means an easy sell: lawmakers have previously united in bipartisan opposition to reductions in eligibility for the Medicare Savings Program.
“I would much rather try to find other ways to account for that (money) in the budget than MSP,” said Matt Ritter, House Majority Leader.
Lamont’s budget would implement an asset test for the Medicare Savings Program, which helps people 65 and older afford their health care costs. Effective in July 2020, individuals with 7,560 in assets in their checking or savings accounts, stocks or bonds would be excluded from the program by the Department of Social Services. The asset cap would be $11,340 for a family. Some assets like someone’s home, one car, a burial plot and personal items would not be counted.
Torranto believed she would be kicked off the program.
“If they set asset limits at those small amounts, none of us will be able to qualify, so we will be using up any monies we have set aside to take care of ourselves and then we’re ultimately going to be wards of the state,” she said. “My assets will go very fast, and somebody else is going to have to pay for my medication and what not.”
Melissa McCaw, secretary of the Office of Policy and Management, said Lamont “struggled” over whether or not to propose the asset test. Connecticut is one of eight states that does not have one, she said.
State operations were already lean when Lamont took office, so the Greenwich cable entrepreneur had few easy penny-pinching measures to reach for. The biggest savings in Lamont’s budget comes from asking unionized state employees for more concessions and shifting some of the teachers’ pensions costs to towns. Those two changes will save the state about $180 million each in fiscal year 2020.
Trimming state spending by cutting Medicare Savings Program was tried by lawmakers in 2017, as they battled to past the last state budget.
But the cut, which would have impacted more than 90,000 elderly, prompted so much outcry from Connecticut seniors that it was reversed by the General Assembly with a temporary fix — even after Gov. Dannel P. Malloy vetoed the measure in attempt to force legislators to reckon with the state’s growing deficit. Lawmakers voted to take millions from the teacher’s retirement account, Department of Administrative Services and other areas of state spending in order to replenish the funds for this program.
Adding an asset test to the program has been proposed before by lawmakers and never made it out of committee, said Sen. Marilyn Moore, D-Bridgeport, who chairs the Human Services committee, which must approve Lamont’s proposal first. She predicted with the governor’s support, this year might be different, however.
“If it works in other places and people aren’t being hurt by it, I think we should take a really good look at it,” Moore said.
Even with an asset test, the state’s program will still be generous, McCaw argued, because the income threshold to qualify for the program is high, compared to most states.
That may be true, but Connecticut’s cost of living is also higher than that of most other states, said Rep. Susan Johnson, D-Willimantic. She worried without this assistance, people would be forced to sell their homes.
Sen. George Logan, R-Ansonia was open to the concept of an asset test, but worried the $7,500 cap was too low.
Reducing access to the Medicare Savings Program may end up increasing what Connecticut’s overall Medicare spending, said Marie Allen, executive director of the Southwestern Connecticut Agency on Aging and Independent Living. More seniors may end up hospitalized or in nursing homes, which come with an even bigger Medicare price tag, if they cannot afford their medications or preventative care.
“Connecticut successfully reduced costs, and in many cases, increased benefits for lower to middle-income Medicare recipients through the Medicare Savings Program,” said Nora Duncan, Connecticut director of AARP, which opposes the asset test. “It was the result of significant negotiations, designed to reduce state budget expenditures and maximize federal dollars.”
The Medicare eligibility process is already lengthy, said Allen. Adding an asset test may increase the time before a senior can access benefits and receive care.
The state would delay implementation of the asset test until 2020 so it can implement new technology to accurately and quickly assess senior’s assets, McCaw said.
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