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Medicare Savings Program Cuts on Hold

The state budget passed in late October after 123 days of the state operating in the current fiscal year without a budget. As the dust began to settle and people were able to digest some of the cuts in the new bipartisan budget, seniors across the state soon realized they were about to take a big healthcare hit. Cuts to the Medicare Savings Program (MSP) would have kicked nearly 113,000 seniors in the state off the program in the new year, but after serious backlash, the Department of Social Services (DSS) recently announced it has delayed the cut to March 1, 2018 and legislators are going back in to try to restore funding to the program.

The program is designed to help eligible residents cover Medicare Part B premiums and other Medicare out-of-pocket costs. Starting Jan. 1, 2018, the state was lowering the eligibility thresholds in an effort to save close to $70 million.

The previous annual income threshold for low-income seniors and the disabled to participate in the MSP was $25,447. The state budget’s new threshold for help is half that annual income, or $12,060 or less per year. In fiscal year 2016, the monthly average number of Guilford residents using MSP was 334.

People enrolled in the program received a letter shortly after the budget passed informing them that they were no longer eligible. State Representative Sean Scanlon (D-98) said he started to get a lot of calls from concerned seniors after the letter.

“In the budget that we passed in October and were able to come to on a bipartisan basis, we had to make some very difficult cuts in order to balance that budget without major tax increases and one of the most difficult cuts in there was this program,” he said. “In the weeks that followed, people came to realize that was going to have a more significant impact on people than we originally thought and that is why we are now talking about trying to find a way to fix this.”

By “fix,” Scanlon said he means legislators will find the money that the cuts would have generated by taking the funds from another program. Scanlon said it won’t be easy, but it can be done.

“It does speak to the difficulty of this,” he said. “We were able to come to a bipartisan deal and getting there required a lot of difficult choices. When we go to fix this…that money we find is going to come out of somebody else’s important priority. This budgeting is like a game of Jenga—if you take away one block, you might make that side happy, but there will be another group that is going to be adversely affected and that is the challenge we face trying to figure this out.”

Scanlon said the delay on the part of DSS to March 1 essentially gives legislators some time to find the money. State Representative Vincent Candelora (R-86) said he is already up in Hartford talking to both parties and Republicans have identified some possible options to fund this program.

“The governor [Dannel P. Malloy] had held back different areas in the budget that we had not agreed to, like the town aid to the education funds and other departments where he cut some funds,” he said. “There are still other avenues that we can look at. He has not taken our policies on reducing overtime and some of our policies on reducing management staff and some of our policies on office expense line-items that could be reduced, so those are the areas that we are going to take a look at again.” Candelora said he thinks the legislature needs to find roughly $53 million to cover the program at normal levels until the end of the fiscal year on July 1, 2018. After that, Candelora said the legislature is going to need to take a look at the structure and design of the program to determine eligibility and funding moving forward.

“I think we know that we are going to have to look at how to modify the program to make sure the people that truly need the benefits receive them,” he said. “For instance, there is no asset test, so you could have $5 million in the bank and if you have no income because you are retired, you are eligible for those benefits. I think there is some conversation about maybe there needs to be an asset test in place…Right now the income threshold is about $24,000 and the new legislature would have lowered it to $12,000 and in the State of Connecticut, trying to live off $12,000 or even $24,000 is just not a lot of money. I think we need to look at creating that number where it is affordable for seniors.”

Candelora said he expects the legislature will decide this week if they will try and fix the project funding before the end of the year or in January. Candelora said he is hopeful the fix can be made sooner rather than later and Scanlon said the important things for residents to know is the legislature is working to fix this.

“The most important thing here is for the seniors that have called my office or who are worried about this, they can breathe a sigh of relief here because their benefit is not being shut of in 20 days at the end of the year,” he said. “There’s going to be a lot of time now for us to figure this out and I am confident that we will figure it out. It’s just a question of where can we go to find the money for this.”