Certain Medicaid Eligibility Changes Allowed for People with Medicare During COVID

At the end of 2020,  federal guidance was issued that prompted the Pennsylvania Department of Human Services to issue an Operations Memorandum to the County Assistance Offices. The new guidance changed Medicaid eligibility rules that had been established during the COVID Public Health Emergency.  Over the last several months, PHLP has heard from clients whose Medicaid benefits were ended erroneously or who were confused about why their Medicaid benefits changed.  Since most of these new changes apply to people on Medicare, PHLP wants our readers, especially those on Medicare or those who help Medicare beneficiaries, to understand what changes are allowed and not allowed.   

The COVID Public Health Emergency (PHE) declaration by the U.S. Department of Health & Human Services remains in place until the end of July 2021.  The federal government may extend it another three months before it expires.  During the COVID PHE, people on Medicaid generally cannot have their Medicaid benefits terminated even if they no longer qualify. There are some exceptions to this policy, including people who move out of Pennsylvania, people who pass away, and people who request to have their benefits ended or who voluntarily withdraw from Medicaid.  

New Eligibility Changes Allowed for People on Medicare and Medicaid  

Reducing Benefits When Someone Only Qualifies for a Medicare Savings Program  

When someone on Medicaid becomes eligible for Medicare, or when someone who is dually eligible has their situation reviewed at renewal, the County Assistance Office caseworker will review their case to determine if the person qualifies for Medicaid to pay their Medicare Part B premium.  The programs that pay the Medicare Part B premium are known as the Medicare Savings Programs (MSP) or “buy-in.”  

If the individual is only eligible for a Medicare Savings Program and no longer eligible for full Medicaid benefits, the CAO is allowed to change her or him from full Medicaid to MSP after sending a written notice to the individual.  This means the person loses full health benefits through Medicaid and will only get the reduced benefit of the MSP; generally just the payment of the Medicare Part B premium.  If the CAO review finds that the person is over the income and/or resource limits for the Medicare Savings Programs, then that person remains on full Medicaid for the duration of the COVID PHE.  

Below are some examples to clarify the information above. Please note that any action by the County Assistance Office to end or change benefits must be communicated in writing and can be appealed. Appealing quickly keeps the benefits in place during the appeal process.   

Example 1: Bridget is on Medical Assistance for Workers with Disabilities (MAWD).  She turned 65 in April.  Her income is over the limit for the Medicare Savings Programs.  In this situation, she  stays on full Medicaid until the end of the COVID PHE.  

If Bridget’s income were under the limit for the Medicare Savings Program, the CAO would notify her in writing that her MAWD benefits were ending and that she would start only getting help with the payment of the Medicare Part B premium.  

Example 2: Paul is on Medicaid in the Medicaid Expansion/MAGI category. He turns 65  and now has Medicare.  The CAO reviews whether he qualifies for help with the Part B premium and finds that he is under both the income and resource limit for MSP.  The CAO notifies Paul in writing that his Medicaid benefits are changing and he will only qualify for the Medicare Savings Program moving forward.  

If Paul’s income or resources were over the limit for any of the MSPs, then he would stay on full Medicaid until the end of the COVID PHE.  

Example 3: Alice has Medicare and Medicaid and has been covered by the Healthy Horizons category of Medicaid.  She recently did a renewal and her resources are now over the Healthy Horizons’ limit.  Alice’s resources are under the limit for the MSPs, so she is moved to the program that will pay her Medicare Part B premium and her Medicare cost-sharing but she loses her full Medicaid benefits.  

If Alice’s resources were too high for any of the MSPs, she would continue to get full Medicaid and not have her benefits reduced until the end of the COVID PHE.  

Ending Medicare Savings Program When Someone Qualifies for Higher Level of Medicaid  

The new policy also allows people to lose the help with the Medicare Part B premium if they become eligible for a higher level of Medicaid that would give them full coverage. This typically applies to people who become eligible for Medicaid long term care including a Medicaid Home and Community Based Services Waiver or the Medical Assistance for Workers with Disabilities (MAWD) Program.  When people qualify for these programs, they must meet certain income and resource limits to also get help with the payment of the Medicare Part B premium.  

Below is an example of the changes described above. If the CAO takes action to end someone’s MSP as allowed by the new policy, they must send written notice and the individual can file an appeal.   

Example: John has been getting the MSP benefit that pays his Medicare Part B premium. In May, John is approved for a Medicaid Waiver.  Because of his income level, John is not eligible to have the Medicare Savings Program and Medicaid Waiver at the same time.  The CAO notifies John that he cannot get both benefits and asks him to decide whether he wants to keep the MSP or change to the Medicaid Waiver.  If John chooses the Medicaid Waiver, then he will get full Medicaid (and the Waiver benefits) but will no longer get help with the Medicare Part B premium.  If John chooses to keep the MSP benefit, then he would continue to get the help with the Medicare Part B premium but would get no additional benefits through Medicaid or the Waiver.  

Important Reminders 

First, the above changes became effective December 7, 2020.  Before this date, people on Medicare should generally not have had their Medicaid benefits reduced or ended. 

Second, the County Assistance Offices cannot end or reduce people’s Medical Assistance (Medicaid) benefits without written notice before the action takes effect.  People can appeal these notices.  One of the flexibilities in place during the COVID PHE is that the appeal deadline is extended from 30 days to 90 days.  Also, people can request continued benefits during the appeal even if they missed the normal 15-day filing window to keep their benefits in place while they appeal the County Assistance Office’s decision.  

Third, people should continue to report changes to their income, resources, household members, and address as required.  People should also complete their Medicaid renewals, although benefits cannot end for failing to return the renewal paperwork.  

Finally, people on Medicare who get any help from Medicaid, even if it is only payment of the Medicare Part B premium, automatically qualify for full Extra Help with their Medicare Drug Costs.  People who are impacted by the changes detailed above continue to get full Extra Help at least until the end of this year.  

We will update readers of any changes to this new policy.  Click here to see the current Medicaid income and resource limits. Please contact PHLP’s Helpline at staff@phlp.org or 1-800-274-3258 if your Medicaid benefits have ended or changed and you need help.  People on Medicare who had their Medicaid benefits reduced or who have questions about Medicare Extra Help are encouraged to call the APPRISE Program at 1-800-783-7067.