Background

Last year, New York State passed a landmark budget that expanded income eligibility for Medicare Savings Programs (MSPs), a long-overdue reform that the Medicare Rights Center championed alongside partner organizations, with the goal of increasing health access and economic security. Upon taking effect in January 2023, this expansion immediately made around 300,000 additional New Yorkers eligible for MSPs, programs that help enrollees afford Medicare premiums and other costs, and lead to automatic enrollment in the federal Extra Help drug subsidy. Enrollment in an MSP and Extra Help is estimated to save each enrollee at least $7,300 annually and enable access to needed care and medicines. The expansion was particularly welcome news for New York’s older adults and people with disabilities after years of economic fallout and other challenges related to the COVID-19 pandemic. The number of New Yorkers living in poverty has increased by more than 37% over the past decade, and every form of assistance is needed to help these individuals live with dignity.

Lessons learned in New York are applicable to other states, most of which have far less generous MSP eligibility criteria. Lack of MSP access exacerbates longstanding health access inequities facing people of color and others with low incomes. Half of all beneficiaries—nearly 30 million people—live on $29,650 or less per year, and one in four lives on $17,000 or less. Low-income beneficiaries, most of whom are people of color, often struggle to afford needed care and prescription drugs. An estimated 40% of those living on incomes below 150% of the federal poverty level (FPL: $21,870 for a single person in 2023) spend 20% or more of their income on premiums and other health care costs. In 2016, average out-of-pocket health care spending for Original Medicare beneficiaries was $5,460. While those with very low incomes may be eligible for Medicaid, most states offer very little help for those who are just above the Medicaid limit.

To support the efforts of other states to expand eligibility for MSPs, Medicare Rights has compiled lessons learned from the campaign to increase access to MSPs in New York. At the same time, this paper explores obstacles to MSP enrollment that persist in New York and makes recommendations to ensure that as many eligible individuals as possible receive the benefit.