Final Rule to Streamline Enrollment in Medicare Savings Programs – Justice in Aging

Introduction

In 2023, the Centers for Medicare & Medicaid Services (CMS) took action to improve access to affordable Medicare coverage through Medicare Savings Programs (MSPs). On September 21, 2023, CMS finalized updates to Medicaid regulations that make it easier for individuals to enroll in MSPs and retain coverage. The Streamlining Medicare Savings Program Eligibility Determination and Enrollment final rule (“final rule”) takes steps to: 

• Automatically enroll certain Supplemental Security Income (SSI) recipients into the Qualified Medicare Beneficiary (QMB) program, the most comprehensive MSP.
• Maximize use of Medicare Part D Low-Income Subsidy (LIS, or Extra Help) program data to enroll people with LIS into MSPs.
• Align MSP and LIS definitions of “family size”.
• Reduce the burdensome documentation required for MSP applications.
• Simplify the process for verifying life insurance assets in the MSP application process.
• Ensure alignment of QMB and premium Part A effective dates.

CMS anticipated that over a half million people would become newly enrolled for MSPs as a result of these rule changes, which would help individuals better afford their health care. This issue brief outlines each change in detail, and flags opportunities where advocates can pursue additional state policies to increase enrollment and expand health care affordability for older adults and people with disabilities enrolled in Medicare. 

On April 2, 2024, the Centers for Medicare and Medicaid Services (CMS) finalized another rule streamlining Medicaid eligibility and enrollment (including further improvements for Medicare Savings Programs), and Justice in Aging summarized it in a brief entitled, “Final Rule to Streamline Access to Medicaid.” Together, the September 2023 and the April 2024 final rules are referred to as the “streamlining rules.”

What Are Medicare Savings Programs (MSPs)?  

For 65 million older adults and people with disabilities, Medicare offers essential health coverage. Most Medicare enrollees have modest income—in 2024, one in four Medicare enrollees had an income below $24,600.^[2] One in three enrollees reported avoiding care due to cost, and more than seven million Medicare enrollees spend more than 10% of their income on Medicare Part B premiums alone.^[3]

MSPs are Medicaid programs that help with Medicare costs. They serve as a bridge for low-income individuals who would otherwise face high premiums and out-of-pocket costs as barriers to accessing Medicare-covered services. Unfortunately, these programs are underutilized, with less than half of individuals eligible for an MSP enrolled.^[4]

There are three main MSPs, all administered by state Medicaid agencies:^[5]

1. Qualified Medicare Beneficiary, or QMB, covers Part A premiums for individuals without free Part A; Part B premiums; and cost-sharing including co-payments, co-insurance, and deductibles. 
2. Specified Low-Income Medicare Beneficiary, or SLMB, covers Part B premiums. 
3. Qualified Individual, or QI, covers Part B premiums.

While federal law establishes minimum financial eligibility criteria for MSPs, states have the authority to go beyond these minimums.^[6] In recognition of how much individuals struggle with Medicare costs, many states have taken steps to expand access to MSPs by adopting more generous asset and income limits.^[7]

• Thirteen states plus the District of Columbia (AL, AZ, CT, DE, DC, LA, ME, MA, MS, NM, NY, OR, VT, WA) have eliminated their asset limits for MSPs. Two additional states have increased their asset limits (CA, MN).
• Eight states plus the District of Columbia (CT, DC, IL, IN, ME, MA, MS, NY, WA) have gone beyond the federal minimum levels set for MSP income eligibility, and two states (IL, MS) have income disregards that are more than the federal minimum.

Adopting more generous standards can improve access to health care, allowing low-income residents to use their Medicare benefits.

Automating QMB Enrollment for SSI Recipients

42 C.F.R. § 435.909. H.R. 1 did not change this provision; it is currently in force.

Individuals can be enrolled in both full Medicaid (i.e., a package of healthcare services) and QMB.^[8] On top of full Medicaid, QMB helps with Medicare costs and triggers federal protection against improper billing by health care providers.

People who are eligible for SSI are generally eligible for both full Medicaid and QMB. Yet, many SSI recipients are not enrolled in QMB. SSI recipients particularly benefit from QMB since many do not have enough qualifying work credits to be eligible for premium-free Medicare Part A, and QMB pays for the Part A premium along with other Medicare costs.

Starting October 1, 2024, states are required to auto-enroll individuals into QMB as follows:^[9]

• In all states, the state is required to auto-enroll an individual in QMB when the individual is both: (a) Enrolled in SSI-based Medicaid and (b) Enrolled in premium-free Medicare Part A.
• In Part A Buy-In states^[10], the state is also required to auto-enroll an individual in QMB when the individual is (a) Enrolled in SSI-based Medicaid; (b) Eligible for premium Part A but not enrolled; and (c) Enrolled in Part B. In “group payer” states, it is optional for states to automatically enroll this population.

Enforcing Requirement for States to Accept LIS Data as MSP Applications

42 C.F.R. § 435.4; 42 C.F.R. § 435.911(e). H.R. 1 delayed specific deadline, but statutory requirement remains in effect.

Even though the eligibility standards for the low-income subsidy (LIS) and Medicare Savings Program are similar, there remains a significant number of LIS enrollees who remain unenrolled in an MSP. This means that low-income Medicare enrollees are unnecessarily paying premiums and out–of–pocket costs. To mitigate this problem, Congress passed a law in 2009 that requires states to begin MSP applications for people who have applied for LIS.

Under this federal statute, the Social Security Administration sends data (“leads data”) on who is enrolled in LIS to state Medicaid agencies. Since January 1, 2010, each state has been required to accept this LIS leads data and treat it as an MSP application.^[14] Unfortunately, despite the fact that states have been required to treat leads data as an MSP application for over 15 years, many states do not. The final rule reiterated federal law and set a new date for states to come into compliance.^[15]

Aligning MSP and LIS Family Size

42 C.F.R. § 435.601. H.R. 1 delayed enforcement, but states still have the option to implement this provision.

A person’s eligibility for MSPs depends in part on their income level and on their family size. For example, in 2025 a family size of two people would be considered under the federal poverty level (and thus eligible for QMB) at $1,643 monthly, whereas a family size of four people would be considered under the federal poverty level at $2,500 monthly. Please note that some states have higher income limits for QMB; not all states require individuals to be below the federal poverty level.^[16]

States can establish which family members count for determining family size for the purposes of MSP eligibility. Under long-standing requirements governing income counting (i.e., deeming), states are prohibited from deeming income from family members other than the individual’s spouse or parents, even if additional individuals count towards the person’s family size. A state can choose to also exclude a spouse’s income from deeming.^[17]

The final rule, starting April 1, 2026, would have established a federal standard for defining family size for the purpose of MSP eligibility that is aligned with the LIS definition of family size.^[18] It would have required states to include in the definition of “family size,” at a minimum:^[19]

• The applicant;
• The applicant’s spouse (if the spouse is living with the applicant); and
• Other individuals living in the household if they are (1) related to the applicant (by blood, marriage, or adoption) and (2) dependent on the applicant and the applicant’s spouse for at least half of their financial support.

This final rule recognizes intergenerational families that might depend on the applicant for their support and would require states to determine those applicants’ MSP eligibility under a more accurate and consistent definition of family size. States that align family size between LIS and MSPs will likely improve the rate of MSP applications processed using LIS leads data since the family size definition of these two programs will be aligned.

Reducing Documentation Required for MSP Applications

42 C.F.R. § 435.952(e). H.R. 1 delayed enforcement, but states still have the option to implement this provision.

Documentation of financial eligibility is one of the main barriers individuals face in MSP enrollment. Under the final rule, CMS encourages states to align their MSP financial eligibility with LIS financial eligibility, which excludes forms of income and resources that some states count for MSP eligibility.

The rule also would have required those states that do not elect to align their MSP standards with LIS to accept less documentation from individuals applying for MSPs.^[21] Specifically, less documentation would have been required for the following categories of income and assets:

• Amount of interest income;
• Amount of dividend income;
• Amount of non-liquid resources (such as property or cars); and
• Certain information about burial funds.^[22]

At the time of application: Starting April 1, 2026, the final rule would have required states to allow an applicant to attest to information about the four income and asset categories listed above, without further verification before enrollment. This would have prohibited states from requiring individuals, at the initial application, to submit additional documentation (for example, account statements or tax returns) for those categories. States would have been required to accept the information from the application process on those categories without seeking further information, unless the state had other information that is not reasonably compatible with the information provided by the applicant.^[23]

Post enrollment verification: After a person has been determined eligible for an MSP and is enrolled, the state can (but does not have to) seek additional information to verify eligibility. Starting April 1, 2026, the final rule would have required the state to provide at least 90 days for the individual to respond to any request for information.^[24]

Simplifying the Process for Verifying Assets from Life Insurance

42 C.F.R. § 435.952(e)(4). H.R. 1 delayed enforcement, but states still have the option to implement these provisions.

In some states, documenting the value of a Medicaid applicant’s life insurance can be one the biggest barriers to coverage. The applicant may have been sold an insurance policy years ago. Life insurance companies can go bankrupt and can transfer policies to other companies. Advocates report that life insurance companies have been unresponsive to requests for information, requiring multiple attempts and months of delay.

The final rule simplifies the process of verifying assets from life insurance for the purposes of MSP eligibility.^[30] First, some background on how life insurance is treated in Medicaid. There are two broad types of life insurance:

Term life insurance, which typically lasts for a set number of years and does not have a vested dollar amount that a person can “cash out.” Term life insurance does not affect Medicaid eligibility because it is not considered an asset. States are not allowed to ask about the face value of term life insurance policies.^[31]

Whole life insurance, which includes a vested dollar amount that a person can “cash out.” Whole life insurance can affect Medicaid eligibility because it is considered an asset. According to existing federal rules for MSP eligibility, the cash surrender value (the amount that a person could cash out the policy for) of whole life insurance is countable when the face value (the amount to be paid out in the case of death) exceeds $1,500.^[32] States can adopt methodology that is more generous, e.g., disregarding the cash surrender value of life insurance policies.^[33]

The final rule would have, starting April 1, 2026, set up the steps below to simplify the process of applying for an MSP with a whole life insurance policy.

At the time of application (whole life insurance face value): The applicant attests to the face value of their whole life insurance policy. Under the final rule, at this point the state must accept this information during the application process without seeking further information, unless the state has information that is not reasonably compatible with the information provided by the applicant.

At the time of application (whole life insurance cash surrender value): If the applicant attests to a face value over $1,500, then a state could ask what the cash surrender value is. Under the final rule, the state may accept an attestation of cash surrender value. It can also seek additional information about the cash surrender value.

Post-enrollment: After determining that a person is eligible for MSP, the state can seek additional information to verify whole life insurance face value attested to at the time of application. The final rule would have required the state to provide at least 90 days for the individual to respond.^[34]

Additional help with obtaining the cash surrender value: Finding a cash surrender value of a policy can be really difficult and presents a large barrier to coverage. If the state requires an individual to provide further information than an attestation of the cash surrender value, the final rule would have required states to assist individuals with the task of obtaining the cash surrender value. The state must ask the individual for information about the policy and for authorization for the state to work directly with the life insurance company to obtain the needed information.

Clarifying the QMB Enrollment Date in Group Payer States

42 C.F.R. § 406.21(c)(5). H.R. 1 delayed enforcement, but states still have the option to implement this provision.

Enrollment in QMB for individuals who do not have premium-free Medicare Part A is particularly cumbersome in the 14 “group payer” states. Individuals in these states who do not enroll in Part A during their initial enrollment period must wait until the General Enrollment Period (January 1 – March 31) to “conditionally enroll” in Part A through the Social Security Administration and then enroll in QMB through their state Medicaid program.^[35] As of January 1, 2023, Part A entitlement (i.e., coverage) is now effective the first of the month following the month of enrollment (i.e., application).^[36]

Under long-standing policy, the federal government has allowed states to initiate QMB for the first month that an individual’s Medicare coverage starts. States receive federal financial participation for that first QMB month.

The final rule , would have codified and clarified this existing policy to align the QMB effective date with the new Part A effective date for people living in group payer states who enroll during the General Enrollment Period.^[37] For individuals who enroll in actual or conditional Part A during the General Enrollment Period, the final rule would have clarified that QMB starts the month that Part A entitlement (i.e., coverage) begins, if a state has determined that an individual is eligible for QMB the month Part A enrollment occurs (i.e., the month the Part A application is filed). If the state determines QMB eligibility starts the same month Part A entitlement (i.e., coverage) begins or after, the final rule would have clarified that QMB is effective the month after Part A entitlement (i.e., coverage) begins.

Examples:

• Jane lives in Kansas and applies for conditional Part A in January 2024. Kansas Medicaid agency determines that she is eligible for QMB in January 2024 as well. Jane’s Part A coverage will start February 1, 2024 and QMB will pay her premium.
• Lee lives in Virginia and also applies for conditional Part A in January 2024. Lee received income in January for some part time work they did over the holiday season. Virginia Medicaid determines that Lee is not eligible for QMB in January but is eligible in February. Therefore, QMB will not start until March 1, 2024. Medicare Part A coverage will also begin March 1, unless Lee pays the Part A premium on their own.

Conclusion

The final rule makes it easier for older adults and people with disabilities to access more affordable health care through Medicare Savings Programs. Though the H.R. 1 moratorium applies to many of these rules, states still have the opportunity to implement these strategies to improve access. If you are seeing issues with the implementation of the rule, please contact info@justiceinaging.org.

Table of MSP Streamlining Provisions (taking into account H.R. 1)

Endnotes

1. Public Law 119-21, to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14; Sections 71101 and 71102 address the streamlining rules. ↑

2. KFF, ”Income and Assets of Medicare Beneficiaries“ (Aug. 2025). ↑

3. Id. ↑

4. MACPAC, “Medicare Savings Programs: New Estimates Continue to Show Many Eligible Individuals Not Enrolled” (Aug. 2017). ↑

5. A fourth MSP, the Qualified Disabled Working Individual (QDWI) Program, pays the Part A premium of some people with disabilities who have returned to work. ↑

6. KFF, “Eligibility for Medicare Savings Programs“ (select Medicare Savings Programs). ↑

7. NCOA,”Medicare Savings Programs Eligibility and Coverage”(Oct. 2025); Justice in Aging,”Expanding Health Care Affordability for Older Adults and People with Disabilities: A Guide for State Medicaid Advocates” (Mar. 2022). ↑

8. Individuals can also be enrolled in both full Medicaid and SLMB. Full Medicaid can also pay for Medicare premiums and cost-sharing. See Chapter 1 of the CMS Medicare Manual State Payment of Medicare Premiums. ↑

9. 42 CFR §435.909. See Section 1.6.2.6 Chapter 1 of the CMS Medicare Manual State Payment of Medicare Premiums. For discussion, see the proposed rule at 87 FR 54,770 and the final rule at 88 FR 65,248. ↑

10. A “Part A buy-in state” is a state that has entered into a Part A buy-in agreement with the Social Security Administration. A list of Part A buy in states is available at SSA POMS HI 00801.140. ↑

11. Group payer states are: Alabama, Arizona, Colorado Illinois, Kansas, Kentucky, Missouri, Nebraska, New Jersey, New Mexico, South Carolina, Utah, and Virginia. See Appendix 1.D of Chapter 1 of the Medicare Manual State Payment of Medicare Premiums. ↑

12. For more information on becoming a Part A buy-in state, see Justice in Aging, ”Building the Path to Medicare Part A Buy-In: Strategies for Advocates” (Aug. 2024) ↑

13. Specifically, the regulation allows for group payer states to also automatically enroll individuals into QMB for individuals who are: (a) enrolled in SSI-based Medicaid; (b) eligible for premium Part A but not enrolled; and (c) enrolled in Part B. For more information, see Section 1.6.2.6 of Chapter 1 of the Medicare Manual State Payment of Medicare Premiums. ↑

14. 42 U.S.C. § 1396u-5, as added by Medicare Improvements for Patients and Providers Act (MIPPA). The requirement to initiate an MSP application is a condition of the Medicaid state plan and a condition of federal financial assistance. 42 U.S.C. 1396a(a)(66); 42 U.S.C. § 1396u-5(a)(4). For discussion, see the proposed rule at 87 FR 54,755 and the final rule at 88 FR 65,232. ↑

15. 42 C.F.R. §435.4; 42 C.F.R. 435.911(e). For discussion, see the proposed rule at 87 FR 54,763 and the final rule at 88 FR 65,231. ↑

16. KFF,”Eligibility for Medicare Savings Programs” (select Medicare Savings Programs). ↑

17.  Final rule at 88 FR 65,248. ↑

18. 42 C.F.R. 435.601. For discussion, see the proposed rule at 87 FR 54,770 and the final rule at 88 FR 65,247. ↑

19. The final rule kept the long-standing requirements around deeming. So, for example, if the final rule would have required the state to include a person’s adult child in the family size, the state would still have been prohibited from using that adult child’s income for the purposes of eligibility. ↑

20.  Final rule at 88 FR 65,247. ↑

21. 42 C.F.R. 435.952(e). For discussion, see the proposed rule at 87 FR 54,767 and the final rule at 88 FR 65,239. ↑

22.  Regarding burial funds, this information includes that up to $1,500 of their resources, and up to $1,500 of their spouse’s resources, are set aside in a separate account. Final rule at 88 FR 65,244.  ↑

23. 42 C.F.R. § 435.952(e). ↑

24. Id. ↑

25. The final rule addressed improper payment and recoupment issues around self-attestation: “In response to the commenters’ concerns about the potential for increasing improper payments, we note that self-attestation is an acceptable means of verification and that many States have incorporated it into their verification policies as a generally reliable alternative to requiring applicants to produce documentation. As such, the period during which an individual would be enrolled in an MSP based on self-attestation that proved to be incorrect would not be an improper payment, nor would an individual be subject to administrative benefit recovery if they are later found to be ineligible. In addition, we clarify that States would not administratively recoup payments already made on behalf of individuals if post-eligibility verification processes establish that the individual is ineligible for the MSPs. If a State suspects that an individual committed fraud or abuse in order to obtain or maintain MSP eligibility, the State should follow the processes described at 42 CFR part 455, subpart A of the regulations.” Final rule at 88 FR 65,243 ↑

26. 42 C.F.R. § 435.952(c) (as updated by the April 2024 streamlining rule and not subject to the H.R. 1 moratorium); also see CMS, ”Medicaid Eligibility and Enrollment Final Rule” (May 2024) slide 18; also see CBPP, ”Reasonable Compatibility Policies Presents an Opportunity to Streamlining Medicaid Determinations” (Aug. 2016) (discussing how reasonable compatibility process requirements apply to MAGI and non-MAGI populations). ↑

27. CMS Informational Bulletin re: Ensuring Timely and Accurate Medicaid and CHIP Eligibility Determinations at Applications (May 9, 2024) (slide 30). ↑

28. Id. ↑

29. Proposed rule at 87 FR 54,766 ; Final rule at 88 FR 65,260. ↑

30. 42 C.F.R. § 435.952(e)(4). For discussion, see the proposed rule at 87 FR 54,768 and the final rule at 88 FR 65,244. ↑

31. Proposed rule at 88 FR 54,768. ↑

32. Id., citing Sections 1613(a) and 1905(p)(1)(C) of the Social Security Act. ↑

33. Id. ↑

34. 42 C.F.R. § 435.952. ↑

35. Justice in Aging, “Medicare Part A Conditional Applications” (2025). ↑

36. See 42 C.F.R. §§ 406.21(c)(3)(ii); 407.25(b)(3); see also 42 U.S.C. § 1395q(a)(2) ↑

37. 42 C.F.R. § 406.21(c)(5). For discussion, see the proposed rule at 87 FR 54,775 and the final rule at 88 FR 65,254. ↑

38. 42 C.F.R. § 435.909. This regulation is not subject to the H.R. 1 moratorium. ↑

39. 42 C.F.R. § 435.4; 42 C.F.R. § 435.911(e). These regulations are subject to the H.R. 1 moratorium. The federal statutory requirements are at 42 U.S.C. § 1366a(a)(66) and 42 U.S.C. § 1396u-5(a)(4) and are not subject to the H.R. 1 moratorium. ↑

40. 42 C.F.R. § 435.601. This regulation is subject to the H.R. 1 moratorium. ↑

41. 42 CFR § 435.952(e). This regulation is subject to the H.R. 1 moratorium. ↑

42. 42 C.F.R. § 435.952(e)(4). This regulation is subject to the H.R. 1 moratorium. ↑

43. 42 C.F.R. § 406.21(c)(5). This regulation is subject to the H.R. 1 moratorium. ↑