MEDICARE SAVINGS 

PROGRAMS

Implementation of 

Requirements Aimed 

at Increasing 

Enrollment

Report to Congressional Committees

September 2012

GAO-12-871

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United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-12-871, a report to 

congressional committees

September 2012

MEDICARE SAVINGS PROGRAMS

Implementation of Requirements Aimed at 

Increasing Enrollment

Why GAO Did This Study

Congress established four MSPs and 

the LIS program to help low-income 

beneficiaries pay for some or all of 

Medicare’s cost-sharing requirements. 

Historically low enrollment in MSPs 

has been attributed to lack of 

awareness about the programs and 

cumbersome enrollment processes 

through state Medicaid programs. 

MIPPA included requirements for SSA 

and state Medicaid agencies aimed at 

eliminating barriers to MSP enrollment. 

Most notably, MIPPA created a new 

pathway to MSP enrollment by 

requiring SSA, beginning January 1, 

2010, to transfer the information from a 

LIS application to the relevant state 

Medicaid agency, and the state must 

initiate an application for MSP 

enrollment. MIPPA also required GAO 

to study the effect of these 

requirements. This report describes 

(1) SSA’s implementation of the 

requirements; (2) how MSP enrollment 

levels have changed from 2007 

through 2011 and the factors that may 

have contributed to those changes; 

and (3) the effects of the MIPPA 

requirements on states’ administration 

of MSPs. 

GAO reviewed documents and data on 

SSA’s efforts to transfer applications 

and implement other MIPPA 

requirements, analyzed MSP 

enrollment data from CMS, surveyed 

Medicaid officials from the 50 states 

and the District of Columbia, and 

contacted officials from 6 states 

selected, in part, because they 

accounted for over 20 percent of MSP 

enrollment. 

What GAO Found

The Social Security Administration (SSA) took a number of steps to implement 

the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) 

requirements aimed at eliminating barriers to Medicare Savings Program (MSP) 

enrollment and spent about $12 million in fiscal years 2009 through 2011 to do 

so. SSA reported transferring over 1.9 million Low-Income Subsidy (LIS) program 

applications to state Medicaid agencies between January 4, 2010 and May 31, 

2012. SSA also took steps to make information available to potentially eligible 

individuals, conduct outreach, and train SSA staff on MSPs. In fiscal years 2009 

and 2010, SSA spent $9.2 million of the $24.1 million appropriated by MIPPA for 

initial implementation costs, and in fiscal year 2011, SSA spent about $2.5 million 

of the $3 million appropriated by MIPPA for ongoing administrative costs. SSA 

officials told GAO that implementing the MIPPA requirements has not 

significantly affected its overall workload and that SSA expects funding provided 

under the law to be sufficient to carry out the requirements.

Using data from the Centers for Medicare & Medicaid Services (CMS), GAO 

estimates that MSP enrollment increased each year from 2007 through 2011. 

The largest increases occurred in 2010 and 2011 (5.2 percent and 5.1 percent 

respectively), the first 2 years that the MIPPA requirements were in effect. 

Several factors may have contributed to the higher levels of growth in MSP 

enrollment during these 2 years, including SSA application transfers and 

outreach, other MIPPA provisions related to MSPs, and the economic downturn. 

For example, while there are no nationwide data demonstrating the effects of the 

SSA application transfers, officials from 28 states reported that MSP enrollment 

had increased as a result of the transfers.

Officials from most of the six states GAO contacted to supplement its survey 

reported that the SSA application transfers led to changes in eligibility systems 

and had increased the state’s workload, that is, the time spent processing MSP 

applications. The extent to which the application transfers resulted in system or 

workload changes may have depended on whether states accepted SSA’s 

verification of the information transferred, as allowed under CMS policy. In 

response to GAO’s survey, officials from 35 states reported that the state 

required the applicant to reverify at least some of the information. GAO found 

from interviews with officials from selected states that requiring reverification from 

applicants included multiple steps by the state and applicant. In contrast, officials 

from two states that accepted SSA’s verification of the information told GAO that 

the state was able to enroll some of the applicants transferred by SSA with little 

to no work required by caseworkers. Differences in how SSA and states count 

income and assets when determining eligibility for LIS versus MSPs may have 

driven states’ decisions to require verification from applicants. States have the 

flexibility under federal law to align methods for counting income and assets for 

MSPs with those for LIS and doing so may reduce the administrative burden of 

processing the transferred applications. However, doing so would likely increase 

enrollment and, therefore, increase state Medicaid costs.

SSA, in an e-mail, agreed with GAO’s description of its implementation of MIPPA 

requirements.

View GAO-12-871. For more information, 

contact Kathleen M. King at (202) 512-7114 or 

kingk@gao.gov.
Page i GAO-12-871 Enrollment in Medicare Savings Programs

Letter 1 

Background 6

SSA Transferred Applications, Conducted Outreach and Training, 

and Reported That These Efforts Did Not Significantly Affect 

Workload 12

Estimated MSP Enrollment Increased from 2007 through 2011 with 

the Largest Increases Occurring after the Requirements Took 

Effect 16

States Reported That the Requirements Led to Various System 

Changes and Increased Workload 19

Concluding Observations 24

Agency Comments 25

Appendix I GAO Methodology for Estimating Change in Medicare 

Savings Program Enrollment 27

Appendix II GAO Contact and Staff Acknowledgments 29

Tables

Table 1: Medicare Coverage and Beneficiary Cost Sharing for 2012 

under the Medicare Fee-for-Service Program 7

Table 2: Federal Income Limits and Benefits for Medicare Savings 

Programs and the Low-Income Subsidy Program 10

Table 3: Social Security Administration (SSA) Letters Sent to 

Individuals Potentially Eligible for Medicare Savings 

Programs (MSP), 2010 through May 2012 14

Table 4: Change in Estimated Medicare Savings Program (MSP) 

Enrollment, 2007 through 2011 17

Table 5: Social Security Administration (SSA) Data Elements States 

Require Medicare Savings Program Applicants to Reverify 23

Contents
Page ii GAO-12-871 Enrollment in Medicare Savings Programs

Abbreviations

CMS Centers for Medicare & Medicaid Services

FPL federal poverty level

FTE full time equivalent

LIS Low-Income Subsidy 

MIPPA Medicare Improvements for Patients and Providers Act 

 of 2008

MSP Medicare Savings Program

NCOA National Council on Aging

QDWI Qualified Disabled and Working Individual

QI Qualifying Individual

QMB Qualified Medicare Beneficiary

SLMB Specified Low-Income Medicare Beneficiary

SSA Social Security Administration

SSI Supplemental Security Income

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Page 1 GAO-12-871 Enrollment in Medicare Savings Programs

United States Government Accountability Office

Washington, DC 20548

September 14, 2012

Congressional Committees

Medicare, which is administered by the Centers for Medicare & Medicaid 

Services (CMS), provided health insurance coverage for a broad array of 

services, including hospital, physician, home health, and other services, 

to almost 49 million Americans in 2011 who were elderly, disabled, or had 

end-stage renal disease.1 Medicare beneficiaries pay a portion of the 

program’s costs through cost-sharing provisions—including premiums, 

deductibles, and coinsurance—that can be difficult to afford for lowincome beneficiaries.2 In 2010, an estimated one third of all Medicare 

beneficiaries had annual incomes that were less than 150 percent of the 

federal poverty level (FPL),3 which in 2012 means an annual income 

below $16,755 for a single person. Between 1989 and 1998, to assist 

low-income beneficiaries, Congress established four Medicare Savings 

Programs (MSP)—the Qualified Medicare Beneficiary (QMB), Specified 

Low-Income Medicare Beneficiary (SLMB), Qualifying Individual (QI), and 

Qualified Disabled and Working Individual (QDWI) programs.4

 

1

Medicare is the federally financed health insurance program for persons age 65 or over, 

certain individuals with disabilities, and individuals with end-stage renal disease. Medicare 

Parts A and B are known as Medicare fee-for-service. Medicare Part A covers hospital 

and other inpatient stays. Medicare Part B is optional, and covers hospital outpatient, 

physician, and other services. Medicare beneficiaries have the option of obtaining 

coverage for Medicare services from private health plans that participate in Medicare 

Advantage—Medicare’s managed care program—also known as Part C. All Medicare 

beneficiaries may purchase coverage for outpatient prescription drugs under Part D, either 

as a stand-alone benefit or as part of a Medicare Advantage plan. 

MSPs help 

pay for some or all of Medicare beneficiaries’ cost-sharing requirements, 

each with differing income eligibility requirements and levels of benefits. 

Under MSPs, state Medicaid programs—under the oversight of CMS—

pay Medicare beneficiaries’ premiums and, for some beneficiaries, 

2

Throughout this report, we use the term “beneficiary” to refer to a Medicare beneficiary.

3

See “Distribution of Medicare Beneficiaries by Federal Poverty Level, states (2009-2010), 

U.S. (2010)” (The Kaiser Family Foundation), accessed Apr. 25, 2012, 

http://www.statehealthfacts.org. 

4

The QMB program was established in 1989, followed by the QDWI program in 1990, the 

SLMB program in 1993 and the QI program in 1998.

 
 

Page 2 GAO-12-871 Enrollment in Medicare Savings Programs

deductibles, copayments and coinsurance.5 In 2003, Congress created 

the Low-Income Subsidy (LIS) program, which is a separate program 

administered by the Social Security Administration (SSA) and states to 

assist low-income Medicare beneficiaries with the costs of outpatient 

prescription drug coverage under Medicare Part D.6

While federal law generally requires state Medicaid programs to provide 

MSP benefits to individuals who apply and meet federal eligibility 

requirements, there are financial incentives for states to enroll some 

beneficiaries and disincentives to enrolling others. Enrolling beneficiaries 

in an MSP can reduce state Medicaid spending for certain beneficiaries. 

For example, for beneficiaries eligible for full Medicaid benefits, paying 

beneficiaries’ Medicare premiums ensures that Medicare is the primary 

payer for certain services rather than the state Medicaid program. For 

beneficiaries who are only eligible for Medicaid coverage of Medicare cost 

sharing and no other Medicaid benefits, there is no immediate financial 

incentive for the state to enroll the beneficiary in MSPs. In these cases, 

providing MSP benefits generally increases the costs of the state 

Medicaid program.7

Historically, MSPs have had low enrollment rates. For example, in 2004, 

the Congressional Budget Office estimated that only 33 percent of eligible 

beneficiaries were enrolled for QMB benefits and only 13 percent were 

 

5

Medicaid is a joint federal-state program that finances health care for certain low-income 

populations. Under state Medicaid programs, QMB, SLMB, and QDWI are financed jointly 

by states and the federal government. QI is financed entirely by the federal government as 

long as costs fall within a state’s annual allotment for the program. The Kaiser 

Commission on Medicaid and the Uninsured reported that Medicaid paid $32.1 billion in 

federal fiscal year 2008 for Medicare premiums and cost-sharing for Medicare services. 

See Kaiser Commission on Medicaid and the Uninsured, Medicaid’s Role for Dual Eligible 

Beneficiaries (Washington, D.C.: April 2012).

6

GAO issued a report and two testimonies in 2007 and 2008 on SSA implementation of 

LIS. See GAO, Medicare Part D Low-Income Subsidy: Additional Efforts Would Help 

Social Security Improve Outreach and Measure Program Effects, GAO-07-555

(Washington, D.C.: May 31, 2007); Medicare Part D Low-Income Subsidy: Progress 

Made in Approving Applications, but Ability to Identify Remaining Individuals Is Limited, 

GAO-07-858T (Washington, D.C.: May 8, 2007); and Medicare Part D Low-Income 

Subsidy: SSA Continues to Approve Applicants, but Millions of Individuals Have Not Yet 

Applied, GAO-08-812T (Washington, D.C.: May 22, 2008).

7

The exception to this is that those enrolled in the QI program, which is financed entirely 

with federal funds, do not increase the costs of state Medicaid programs.
 

Page 3 GAO-12-871 Enrollment in Medicare Savings Programs

enrolled for SLMB benefits.8 Other researchers have found that 

beneficiaries’ lack of awareness and a cumbersome eligibility 

determination and enrollment process are the main barriers to enrollment. 

Congress has taken a number of steps to increase enrollment rates. For 

example, in 2000, Congress passed the Medicare, Medicaid and SCHIP 

Benefits Improvement and Protection Act, which included provisions 

requiring SSA to notify low-income Medicare beneficiaries that they may 

be eligible for MSP benefits.9 More recently, the Medicare Improvements 

for Patients and Providers Act of 2008 (MIPPA) included new 

requirements for SSA and state Medicaid agencies aimed at eliminating 

barriers to MSP enrollment.10 Most notably, MIPPA created a new 

pathway to MSP enrollment by requiring SSA, beginning January 1, 2010, 

to transfer the information from an LIS application to the relevant state 

Medicaid agency and requiring the state Medicaid agency to use that 

information to initiate an application for MSP enrollment.11 MIPPA also 

required SSA to make information on MSPs available to potentially 

eligible individuals, coordinate LIS and MSP outreach, and train 

personnel in explaining MSPs. MIPPA appropriated $24.1 million to SSA 

for initial implementation of these requirements and up to $3 million per 

year—to be provided by CMS to SSA under a funding agreement—

beginning in fiscal year 2011 for the ongoing administrative costs of 

meeting these requirements.12

 

8

The estimates completed by the Congressional Budget Office in 2004 are the most 

recent estimates available.

9

Pub. L. No. 106-554, App. F, § 911(a), 114 Stat. 2763, 2763A-583 (adding section 1144 

to the Social Security Act (SSA); codified at 42 U.S.C. § 1320b-14(b) (2010)). GAO issued 

a report in 2004 describing SSA’s efforts to meet those requirements. See GAO, Medicare 

Savings Programs: Results of Social Security Administration’s 2002 Outreach to LowIncome Beneficiaries, GAO-04-363 (Washington, D.C.: Mar. 26, 2004). 

10Pub. L. No. 110-275, § 113, 122 Stat. 2494, 2503 (amending sections 1144 and 1935(a) 

of the SSA; codified at 42 U.S.C. §§ 1320b-14, 1396u-5(a) (2010)) (hereafter, “MIPPA”). 

11Throughout this report, we describe these exchanges of information between SSA and 

states as application transfers, as SSA is transferring all of the information from the LIS 

application.

12MIPPA required that SSA and CMS execute an agreement by which CMS would provide 

SSA the full administrative cost of SSA’s MSP-related activities, starting in fiscal year 

2011, and appropriated not more than $3 million for each fiscal year for that purpose. 
 

Page 4 GAO-12-871 Enrollment in Medicare Savings Programs

MIPPA also directed GAO to report on the effects of the MIPPA 

requirements on participation in MSPs and on SSA and states.13

To describe SSA’s implementation of the MIPPA requirements aimed at 

eliminating barriers to MSP enrollment, we reviewed documents and data 

on SSA’s efforts to transfer applications to states to initiate MSP 

applications, make information available, coordinate outreach for LIS and 

MSPs, and train staff. We also reviewed documents on SSA spending of 

the $24.1 million appropriation it received for initial costs associated with 

implementing these requirements and documents related to funding 

agreements between SSA and CMS for expenses related to 

administering these requirements in fiscal years 2011 and 2012; and we 

reviewed SSA data on how implementing the requirements affected 

workload. To supplement this review, we spoke with SSA officials about 

implementation of the requirements, including any challenges 

experienced.

In this 

report, we describe (1) SSA’s implementation of the requirements aimed 

at eliminating barriers to MSP enrollment; (2) how MSP enrollment has 

changed from 2007 through 2011 and what factors may have contributed 

to those changes; and (3) any effects the requirements have had on 

states’ administration of MSPs.

To describe the change in MSP enrollment from 2007 through 2011, we 

used CMS data to estimate the annual change in enrollment. The data, 

reported by states to CMS, included state-level information on the number 

of Medicare beneficiaries for whom states will pay the Medicare Part B 

premium.14

 

13MIPPA, § 113(a), 124 Stat. at 2505 (amending section 1144(c)(6) of the SSA; codified at 

42 U.S.C. § 1320b-14(c)(6) (2010)).

In our estimates we used data from December of each year. 

The data do not reflect QDWI enrollment, which CMS officials estimated

at less than 300 beneficiaries nationally as of March 2012. In addition, the 

data reflect some Medicare beneficiaries who are not eligible for the 

QMB, SLMB, or QI programs but for whom states finance the Part B 

premium. We were able to exclude some but not all of these beneficiaries 

14The data were derived from CMS’s monthly Third-Party Buy-In file, which contains data 

from the CMS Enrollment Database. Data in the Enrollment Database are used by CMS to 

track enrollment and bill state Medicaid programs for the Part B premiums for individuals 

whose premiums the state has agreed to finance. States submit data regularly to CMS for 

updates to the Enrollment Database. 
 

Page 5 GAO-12-871 Enrollment in Medicare Savings Programs

from our estimates.15 We took a number of steps to assess the reliability 

of CMS’s data, including interviewing CMS officials on the limitations of 

the data and reviewing the CMS policy manual outlining the requirements 

states must follow in reporting the data. We determined the data to be 

sufficiently reliable for the purposes of estimating the changes in MSP 

enrollment nationally over time; where relevant we stated the limitations 

of the data in the findings. (See app. I for more information on our 

analysis of the CMS data and our assessment of the data’s reliability.) To 

describe the factors that may have contributed to changes in MSP 

enrollment, we surveyed state Medicaid officials on the effects of the 

application transfers on MSP enrollment and received responses from all 

50 states and the District of Columbia.16

To describe any effects of the requirements on states’ administration of 

MSPs, we asked officials from our six selected states about any changes 

the state made to information technology systems, business processes, 

or personnel—in particular, to receive and act upon the application 

transfers—and how the requirements have affected the state’s workload. 

To supplement our survey, we 

also contacted Medicaid officials from 6 selected states—Arizona, 

Colorado, Florida, Louisiana, Pennsylvania, and Texas—on the factors 

that may have contributed to changes in MSP enrollment and reviewed 

these states’ data on the outcomes of the application transfers where 

available. We selected these 6 states because together they accounted 

for over 20 percent of MSP enrollment in 2011, are geographically 

diverse, and vary in terms of their MSP eligibility requirements. In addition 

to the information collected from states, we reviewed SSA data on the 

outcomes of the application transfers. We also reviewed other MIPPA 

provisions that may have contributed to changes in enrollment.

 

15States have the option to provide Medicaid benefits and payment for Medicare Part B 

premiums to beneficiaries that do not meet the eligibility requirements for MSPs but who 

otherwise qualify for Medicaid. For example, some states finance premiums for 

beneficiaries categorized as “medical assistance only” who are not eligible for MSPs. We 

excluded these beneficiaries from our estimates. Some states also finance premiums for 

beneficiaries categorized as “medically needy.” These beneficiaries may or may not meet 

the eligibility requirements for a MSP. We were not able to exclude these beneficiaries 

from our estimates, because CMS did not have data for this population for each year 

included in our analysis. For the same reason, we were not able to exclude beneficiaries 

for whom the state did not specify the eligibility category. While CMS did not have data for 

each year of our analysis for these populations, as of May 8, 2012, about 8 percent of 

beneficiaries were medically needy or did not have an eligibility category specified. 

16In this report, we use the term “states” to refer to the 50 states and the District of 

Columbia.
 

Page 6 GAO-12-871 Enrollment in Medicare Savings Programs

We reviewed data from the selected states on the numbers of MSP 

applications received the year before transfer requirements took effect 

(2009) and in the first 2 years after the requirements took effect (2010 

and 2011) when available. Finally, in our survey, we asked state Medicaid 

officials whether they required applicants to verify the information 

transferred by SSA, and we reviewed open-ended survey responses for 

any evidence of effects of the application transfers on state administration 

of MSPs.

We conducted this performance audit from February 2012 to September

2012 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

Medicare covers almost 49 million beneficiaries. Individuals who are 

eligible for Medicare automatically receive Part A benefits, which help pay 

for inpatient hospital, skilled nursing facility, hospice, and certain home 

health services. A beneficiary generally pays no premium for this 

coverage unless the beneficiary or spouse has worked fewer than 

40 quarters in his or her lifetime, but the beneficiary is responsible for 

required deductibles, coinsurance, and copayment amounts. Medicareeligible beneficiaries may elect to purchase Part B, which helps pay for 

certain physician, outpatient hospital, laboratory, and other services. 

Beneficiaries must pay a premium for Part B coverage, which generally 

was $99.90 per month in 2012.17

 

17Beneficiaries with higher incomes may pay a higher Part B premium, up to a maximum 

of $319.70 for single beneficiaries with yearly incomes in 2010 above $214,000 and for 

married beneficiary couples with yearly incomes in 2010 above $428,000. The premium 

amounts are adjusted each year so that expected Medicare premium revenues equal 

25 percent of expected Medicare Part B spending. 42 U.S.C.§1395r(a)(2000).

Beneficiaries are also responsible for 

Part B deductibles, coinsurance, and copayments. Beneficiaries electing 

to obtain coverage for Medicare services from private health plans under

Part C are responsible for paying monthly Part B premiums and, 

depending on their chosen plan, may be responsible for a monthly 

premium to the Medicare plan, copayments, coinsurance, and 

deductibles. Finally, under Medicare Part D, beneficiaries may elect to 

Background 
 

Page 7 GAO-12-871 Enrollment in Medicare Savings Programs

purchase coverage of outpatient prescription drugs from private 

companies. Beneficiaries who enroll in a Part D plan are responsible for a 

monthly premium, which varies by the individual plan selected, as well as 

copayments or coinsurance. Table 1 summarizes the benefits covered 

and cost-sharing requirements for Medicare Part A and Part B, referred to 

together as Medicare fee-for-service. 

Table 1: Medicare Coverage and Beneficiary Cost Sharing for 2012 under the Medicare Fee-for-Service Program

Part A—Hospital insurance Beneficiary paysa

Part A premium No premium if beneficiary or spouse worked at least 40 quarters in lifetime

Up to $451 monthly premium if beneficiary or spouse worked fewer than 40 quarters in 

lifetime

Inpatient hospital $1,156 deductible per benefit periodb

$289 copayment per day for days 61-90

$578 copayment per day for days 91-150c 

All costs beyond 150 days

Skilled nursing facilityd Nothing for first 20 days per benefit period

$144.50 copayment per day for days 21-100 per benefit period

All costs beyond 100 days per benefit period

Home healthe No cost sharing

20 percent coinsurance of Medicare-approved amount for durable medical equipment

Hospicef No cost sharing

Up to $5 copayment per prescription for outpatient drugs for pain and symptom 

management

5 percent coinsurance of Medicare-approved amount for inpatient respite care

Blood Cost of first 3 pints

Part B—Medical insuranceg

Part B premium $99.90 per monthh

Physician and medical $140 deductible each year

20 percent coinsurance for most services

Clinical laboratory No cost sharing

Home healthe No cost sharing

20 percent coinsurance of Medicare-approved amount for durable medical equipment

Outpatient hospital Coinsurance may vary by service

Blood Cost of first 3 pints

20 percent coinsurance for additional pints

Source: GAO analysis of CMS documents.

a

The information in this column reflects what beneficiaries enrolled in the Medicare fee-for-service 

program would pay. Beneficiaries enrolled in a Medicare Advantage Plan may pay either more or less 

depending on the costs of the plan.

b

A benefit period begins the day a beneficiary is admitted as an inpatient in a hospital and ends when 

the beneficiary has not received any inpatient hospital care for 60 days in a row. No deductible is 

charged for second and subsequent hospital admissions if they occur within 60 days of the 

beneficiary’s most recent covered inpatient day.
 

Page 8 GAO-12-871 Enrollment in Medicare Savings Programs

c

After the first 90 days of inpatient care per benefit period, Medicare will help pay for an additional 

60 days of inpatient care (days 91-150). Each beneficiary is entitled to a lifetime reserve of 60 days of 

inpatient coverage. Each reserve day may be used only once in a beneficiary’s lifetime.

d

To qualify, a Medicare beneficiary must require daily skilled nursing or rehabilitative therapy services, 

generally within 30 days of a hospital stay of at least 3 days in length, and must be admitted to the 

nursing home for a condition related to the hospitalization.

e

To qualify for services, Medicare beneficiaries must be confined to their homes; have a plan of care 

signed by a physician; and need intermittent skilled nursing care (other than solely venipuncture for 

the purpose of obtaining a blood sample), physical therapy, speech-language services, or have a 

continuing need for occupational therapy services.

f

To quality for services, a Medicare beneficiary must be terminally ill and have 6 months or less to 

live.

g

No cost sharing is required for certain preventive services, including specific screening tests for 

breast, colon, cervical, and prostate cancer, annual wellness visit, and flu and pneumonia vaccines.

h

Most beneficiaries pay the standard Part B premium amount of $99.90 per month. Beneficiaries with 

higher incomes may pay a higher Part B premium, up to a maximum of $319.70 for single 

beneficiaries with yearly incomes in 2010 above $214,000 and for married beneficiary couples with 

yearly incomes in 2010 above $428,000.

Many low-income Medicare beneficiaries receive assistance from 

Medicaid to pay Medicare’s cost-sharing requirements. For Medicare 

beneficiaries qualifying for full Medicaid benefits, state Medicaid programs 

pay for Medicare’s Part A (if applicable) and Part B premiums and costsharing requirements up to the Medicaid payment rate as well as for 

services that are not generally covered by Medicare.18 To qualify for full 

Medicaid benefits, beneficiaries must meet their state’s eligibility criteria, 

which include income and asset requirements that vary by state.19 In most 

states, beneficiaries that qualify for Supplemental Security Income (SSI) 

automatically qualify for full Medicaid benefits.20

 

18Within broad federal guidelines, states have considerable flexibility in how they 

administer their Medicaid programs. States administer covered services under a state 

Medicaid plan that CMS approves. State Medicaid programs must cover certain 

mandatory services, such as physician services and nursing facility care. (While Medicare 

covers some or all of up to 100 days of skilled nursing facility care following a 

hospitalization, Medicaid covers extended nursing facility care.) State Medicaid programs 

may also cover certain CMS-approved optional Medicaid services. The federal 

government shares the cost of state Medicaid expenditures according to a statutory 

formula, whereby the federal share ranged in 2012 from 50 to 74.2 percent of state 

Medicaid expenditures. States with lower per capita incomes receive higher Federal 

Medical Assistance Percentages. 42 U.S.C. §1396b(a) (2010).

Other beneficiaries may 

19In this report, we use the term “assets” to mean an applicant’s resources, such as funds 

in bank accounts and property other than one’s home.

20SSI provides cash assistance to aged, blind, and disabled individuals who have limited 

income and assets. In 2012, the income limit was $698 per month, and the asset limit was 

$2,000 for individuals and $3,000 for couples. SSI asset limits typically exclude the 

beneficiary’s automobile and house.
 

Page 9 GAO-12-871 Enrollment in Medicare Savings Programs

qualify for full Medicaid benefits through one of several eligibility 

categories that states have the option but are not required to cover, such 

as the medically needy category, which includes individuals with high 

medical costs.

Congress created several MSPs—QMB, SLMB, QI, and QDWI—and, 

more recently, the LIS program to further assist low-income Medicare 

beneficiaries with their premium and cost-sharing obligations. Each 

program has different benefits, and beneficiaries qualify for different

levels of benefits depending on their income.21 (See table 2.) 

Beneficiaries must also have limited assets to qualify for MSPs or LIS.

MIPPA amended the asset limits for the QMB, SLMB, and QI programs to 

more closely align with the LIS limits beginning January 1, 2010.22 This 

raised the MSP asset limits for the first time since 1989 and ensured that 

those limits would be adjusted for inflation in the future.23 As with other 

Medicaid benefits, states have the flexibility to extend eligibility for MSP 

benefits to a larger population than federal law requires to be covered by 

implementing less restrictive income and asset requirements, for example 

by eliminating asset limits or not counting certain types of income.24

Therefore, eligibility requirements for MSPs vary across states, while 

requirements for LIS, which is administered by SSA, are uniform 

nationwide.

 

21All MSP enrollees are considered to be dually eligible for Medicare and Medicaid. 

However, for some, eligibility for Medicaid is limited to MSP benefits. Other enrollees, 

considered “full duals,” are eligible for full Medicaid benefits.

22MIPPA, § 112, 122 Stat. at 2503 (amending section 1905(p)(1)(C) of the SSA; codified 

at 42 U.S.C. § 1396d(p)(1)(C) (2010)). The asset limit for QDWI was not changed by 

MIPPA. 

23In 2012, the asset limit for QMB, SLMB, QI and LIS was $6,940 for an individual and 

$10,410 for a couple. 

24Federal law provides states flexibility to use less restrictive or liberalized methodologies 

than are typically used for Medicaid in counting applicants’ income and assets to expand 

eligibility for MSPs. 42 U.S.C. § 1396a(r)(2)(2010); 42 C.F.R. § 435.601(b)(iii)(2011). 

Many states continue to use the methodology used for the Medicaid program, which 

generally follows the methodology SSA uses to count income and assets when assessing 

eligibility for SSI.
 

Page 10 GAO-12-871 Enrollment in Medicare Savings Programs

Table 2: Federal Income Limits and Benefits for Medicare Savings Programs and the Low-Income Subsidy Program

Program

Income limit as a percent of the 

federal poverty level Medicare costs covered by the program

Medicare Savings Program (MSP)

Qualified Medicare Beneficiary (QMB) At or below 100% Part A premium, deductible, copayments, and 

coinsurance, including for skilled nursing 

facility stays

Part B premium, deductible, copayments, and 

coinsurance

Specified Low-Income Medicare 

Beneficiary (SLMB)

Above 100% but less than 120% Part B premium 

Qualifying Individual (QI) At 120% but less than 135% Part B premium 

Qualified Disabled and Working Individual 

(QDWI)

Disabled and working Medicare 

beneficiaries whose incomes do not 

exceed 200%

Part A premium 

Low-Income Subsidy (LIS) program

Full subsidy Below 135% Drug plan premium, deductible, and 

coinsurance, and a portion of copayments 

Partial subsidy At 135% but less than 150% Portion of drug plan premium, deductible, 

copayments, and coinsurance

Source: GAO analysis of CMS documents.

Note: Federal law provides states flexibility to use less restrictive or liberalized methodologies than

are typically used for Medicaid in counting applicants’ income and assets to expand eligibility for the 

MSPs.

MIPPA included several new requirements aimed at eliminating barriers 

to MSP enrollment. Specifically, MIPPA required SSA to, beginning 

January 1, 2010, transfer data from LIS applications, at the option of 

applicants, to state Medicaid agencies, and it required state Medicaid 

agencies to use the transferred information to initiate an MSP application. 

SSA was also required to make information on MSPs available to those 

potentially eligible for LIS, coordinate outreach for LIS and MSPs, and 

train staff on MSPs.25

 

25MIPPA, § 113, 122 Stat. at 2503 (amending section 1144(c) of the SSA; codified at 

42 U.S.C. § 1320b-14(c)(2010)). 

In addition to the above requirements, MIPPA 

included a number of other provisions related to MSPs. As mentioned 

earlier, MIPPA amended the asset limits for QMB, SLMB, and QI to more 

closely align with the limits for LIS. It also required CMS to translate a 

previously developed model MSP application into 10 languages other 
 

Page 11 GAO-12-871 Enrollment in Medicare Savings Programs

than English.26 In addition, MIPPA included funding for states and other 

organizations to perform outreach for LIS and MSPs.27 Beginning January 

2010, MIPPA also exempted certain types of income and assets from 

being counted when SSA makes a determination of LIS eligibility.28

In addition to the application transfers required under MIPPA, there are a 

number of other pathways to enrollment in MSPs. First, when a person 

applies for Medicaid, states may screen them for eligibility for MSPs. 

Second, some states offer a streamlined application to apply specifically 

for enrollment in MSPs. Finally, more than half of states automatically 

enroll beneficiaries whom SSA has determined to be eligible to receive 

SSI benefits. Once enrolled in MSPs, states periodically determine 

whether beneficiaries remain eligible for the program and either renew or 

cancel enrollment. States have different processes for doing this, some of 

which require more steps by the enrollee than others.

For 

example, the law required that SSA not count the value of a life insurance 

policy as an asset. The law did not extend these changes to MSPs, but 

states have the option to make comparable changes to their programs. 

The treatment of the value of life insurance is one example of a potential 

difference in how LIS and MSPs count income and assets in determining 

program eligibility.

 

26MIPPA, § 118, 122 Stat. at 2507 (amending section 1905(p)(5)(a) of the SSA; codified at 

42 U.S.C. § 1396d(p)(5)(A) (2010)). CMS translated the model application into: (1) Arabic. 

(2) Chinese, (3) Creole, (4) Farsi, (5) French, (6) Korean, (7) Russian, (8) Spanish, 

(9) Tagalog, and (10) Vietnamese. States are not required to use the model application.

27MIPPA, § 119, 122 Stat. at 2508. State Health Insurance Assistance Programs, Area 

Agencies on Aging, and Aging and Disability Resource Centers received MIPPA outreach 

grants beginning in fiscal year 2009. 

28MIPPA, § 116, 122 Stat. at 2507 (amending section 1860D-14(a)(3) of the SSA; codified 

at 42 U.S.C. § 1395w-114(a)(3)(2010)).
 

Page 12 GAO-12-871 Enrollment in Medicare Savings Programs

In implementing the MIPPA requirements, SSA reported transferring over 

1.9 million applications to states, made information available on MSPs to 

potentially eligible individuals, conducted outreach, and provided training 

to staff on MSPs. SSA spent about $12 million in the first 3 years in 

implementing the MIPPA requirements, and officials reported that these 

efforts did not significantly affect its workload.

As required by MIPPA, SSA began transferring applications in January 

2010, and SSA reported transferring over 1.9 million applications to states 

between January 4, 2010, and May 31, 2012. SSA officials told us that all 

states were able to receive LIS data when the transfers began in January 

2010 and that applications are transferred to states each business day.29

Through the application transfer, SSA provides states with the following 

information: (1) all of the information reported by the applicant or modified 

by SSA, including information on household composition, income, and 

assets;30 (2) whether SSA approved or denied LIS enrollment and the 

reasons for denials; and (3) the date that the LIS application was 

submitted, as eligibility for SLMB, QI, and QWDI is retroactive to that 

date. SSA decided that transfers would occur after SSA determined 

eligibility for LIS, which generally occurs within 30 days.31

 

29SSA does not transfer LIS data to states on federal holidays.

As a result, a 

number of elements of the application information transferred to states 

30LIS application income and assets data include the total amount of income not earned 

from working (referred to as unearned income), such as Social Security benefits and 

Veterans Administration benefits; the total amount of income earned from working; the net 

earnings and losses from self-employment; funds in bank accounts; funds in stocks, 

bonds, and other investments; and the value of real estate (exclusive of the primary 

home). SSA officials told us that in reviewing the application, the agency will sometimes 

modify the reported information after discussions with the applicant. Those modifications 

are reflected in the data transferred to states.

31SSA reported that in fiscal year 2011 about 64 percent of LIS determinations were made 

in 30 days or fewer and about 90 percent in 45 days or fewer.

SSA Transferred 

Applications, 

Conducted Outreach 

and Training, and 

Reported That These 

Efforts Did Not 

Significantly Affect 

Workload 

SSA Transferred over 

1.9 Million Applications to 

States, Made Information 

on MSPs Available to 

Potentially Eligible 

Individuals, and Trained 

Staff 
 

Page 13 GAO-12-871 Enrollment in Medicare Savings Programs

have been verified by SSA.32

SSA coordinated with CMS officials and state Medicaid agency officials 

about how to structure the exchange of application data. For example, 

SSA developed a standard data transfer agreement and signed an 

agreement with each state. In the months prior to implementation, SSA 

tested the data exchange with states in order to identify and resolve any 

concerns states had in receiving and using the transferred data. Finally, 

SSA programmed its data systems to transfer the applications as agreed 

with the states. SSA officials also told us that the agency designed the 

process to eliminate duplicate applications, applications with insufficient 

address data, and applications where the individual has opted out of the 

data transfer. In response to concerns raised by states once the transfers 

began, SSA also decided to delay the transfer of applications from 

individuals not yet eligible for Medicare until the applicant is within 

1 month of eligibility. For 2011, SSA reported transferring 66 percent of all 

LIS applications where SSA determined eligibility to states to initiate an 

application for MSPs; and 13 percent of applications had applicants who 

opted out of the transfer and thus were not transferred. SSA officials told 

us the remaining 21 percent were not transferred for various other 

reasons beyond the applicant opting out of the transfer, such as the 

applicant was not yet eligible for Medicare or the applicant submitted a 

duplicate application.

However, the timing of the transfer can 

affect benefits for certain applicants. Specifically, for those individuals 

enrolling in the QMB program, where benefits do not begin until the 

month after the state’s determination of eligibility, waiting for the SSA data 

transfer may result in the loss of a month or more of benefits.

To implement the requirements to make information available to 

potentially eligible individuals and coordinate outreach, SSA took several 

steps. SSA made information, such as the model MSP application 

developed by CMS, available through its website and in local offices. SSA 

conducted an outreach campaign in 2009 to provide information on LIS 

and MSPs, including the changes that MIPPA made to the eligibility 

requirements for both programs. As part of the campaign, SSA held 

events and issued new promotional materials, which the agency provided 

to local Social Security offices, community organizations, and health 

 

32SSA officials noted that SSA verifies some but not all of the information provided by 

applicants. For example, SSA verifies that certain types of reported income are accurate 

but does not verify the household size reported by the applicant.
 

Page 14 GAO-12-871 Enrollment in Medicare Savings Programs

providers’ offices. SSA also sent about 2 million outreach letters in 2009 

to individuals previously denied LIS benefits alerting them that eligibility 

requirements for LIS and MSP would be changing in January 2010 and 

they could now be eligible for LIS as well as MSPs. Since January 2010, 

SSA has sent letters describing LIS and MSPs to several categories of 

potentially eligible individuals.33

Table 3: Social Security Administration (SSA) Letters Sent to Individuals Potentially Eligible for Medicare Savings Programs 

(MSP), 2010 through May 2012

(See table 3.)

Number of letters 

sent in 2010

Number of letters 

sent in 2011

Number of letters sent 

in 2012 (January-May)

Category of potentially eligible individual English Spanish English Spanish English Spanish

Individuals with incomes that appear to qualify 

for the Low-Income Subsidy (LIS) program and 

MSPs but not enrolled in either 

3,268,289 51,996 2,747,919 42,361 2,344,620 35,725

Individuals with incomes that appear less than 

135 percent of federal poverty level, enrolled in 

LIS, but not enrolled in an MSP

559,469 30,588 792,595 35,828 716,339 34,804

Former disability insurance individuals who lost 

Medicare Part A premium assistance when they 

returned to work and who are not enrolled in 

Medicaid

42,584 514 42,290 511 0a 0a

Total 3,870,342 83,098 3,582,804 78,700 3,060,959 70,529

Source: SSA.

Note: According to SSA officials, in addition to the letters described in this table, SSA sends letters 

with a LIS application to individuals receiving social security benefits and potentially eligible for LIS as 

they approach age 65 or the 25th month of disability.

a

SSA generally sends letters to former disability insurance individuals at the end of November of each 

year.

To train staff, SSA developed two video trainings for its employees on the 

MIPPA changes to LIS and MSPs and made the video trainings available 

on-line. SSA required those staff that would be interacting with individuals 

potentially eligible for LIS or MSPs to view the video trainings prior to 

January 2010. SSA also updated its policies and procedures manual to 

include instructions for employees in handling individuals’ questions about 

MSPs during routine contacts. For example, SSA’s policies and 

procedures manual instructs employees to tell individuals about the 

 

33According to SSA officials, SSA also sends letters with a LIS application to individuals 

receiving social security benefits and potentially eligible for LIS as they approach age 65 

or the 25th month of disability.
 

Page 15 GAO-12-871 Enrollment in Medicare Savings Programs

availability of MSPs and that in applying for LIS the individuals can initiate 

an MSP application with their state Medicaid agency unless they opt out. 

SSA’s manual also instructs employees not to help complete MSP 

applications but to refer individuals with MSP questions to either their 

local Medicaid office or to State Health Insurance Assistance Programs, 

which help individuals complete applications for Medicare and Medicaid 

benefits.

In fiscal years 2009 through 2011, SSA spent about $12 million to 

implement the MIPPA requirements. Of the $24.1 million appropriated by 

MIPPA for the initial costs of implementing the requirements, SSA spent 

$9.2 million combined for fiscal years 2009 and 2010 ($4.5 million and 

$4.7 million respectively). The remaining $14.9 million in unspent funds 

remains available to SSA for future costs in meeting the requirements. In 

fiscal year 2011, SSA spent about $2.5 million of the $3 million 

appropriated under MIPPA for the ongoing administrative costs of 

carrying out the requirements. These costs were financed through its first 

annual agreement with CMS. For fiscal year 2012, CMS agreed to fund 

$2.8 million. SSA officials told us that, based on data available as of July 

2012, they expected SSA’s workload, and therefore costs, to remain 

constant for fiscal year 2012.

SSA officials told us that implementing the MIPPA requirements has not 

affected SSA’s overall workload significantly as measured by the staff 

time committed to implementation and to handling inquiries and calls 

about MSPs. For example, SSA officials reported that implementation 

required 17 full time equivalents (FTE) in 2009, 32 in 2010, and 8 in 2011 

and indicated that the ongoing cost in staff time of meeting the 

requirements is relatively small.34

 

34SSA defines an FTE as the equivalent of a staff member (or combination of staff 

members) that worked 2,080 hours. The FTE numbers cited for annual MSP-related 

activities includes the work of staff at both SSA headquarters and field offices.

SSA officials told us that a larger 

amount of staff time was used in 2009 and 2010 because that was when 

SSA conducted its outreach campaign and designed and launched the 

application transfers, the latter of which required programming data 

systems, developing new procedures, and training staff. According to 

officials, some of the ongoing staff time will be dedicated to responding to 

inquiries and calls about MSPs. While SSA data indicated that the volume 

of field office inquiries and calls to its toll-free line related to MSPs 

SSA Spent about 

$12 Million in the First 

3 Years and Reported That 

Implementing the 

Requirements Did Not 

Significantly Affect SSA’s 

Workload 
 

Page 16 GAO-12-871 Enrollment in Medicare Savings Programs

increased since the requirements took effect, the volume was relatively 

small compared to the overall volume of inquires and calls SSA received. 

For example, in fiscal year 2011, SSA received about 53,000 calls related 

to MSPs out of a total of 76.8 million fielded through the toll-free line.

SSA officials also reported that, for fiscal year 2011, SSA was under a 

hiring freeze. As a result, SSA officials noted that FTEs that had been 

devoted to MSP work have been diverted from some of SSA’s more 

traditional workloads, such as processing claims for Social Security 

benefits or issuing Social Security numbers. However, the funding 

appropriated under MIPPA supported the relatively small number of FTEs 

used to implement the requirements and will continue to do so through 

the funding agreements with CMS. MIPPA prohibits SSA from using its 

own administrative funding to carry out the MSP requirements, and, 

therefore, SSA intends to continue to rely on funding provided under the 

CMS funding agreements for these activities.35

Using CMS data, we estimated that MSP enrollment increased each year 

from 2007 through 2011. The largest increases in MSP enrollment 

occurred in 2010 and 2011 (5.2 percent and 5.1 percent respectively), the 

first 2 years that the MIPPA requirements were in effect. (See table 4.) 

During this period, Medicare enrollment also grew by approximately 2 to 

3 percent each year, from about 44.4 million people in 2007 to about 

48.7 million people in 2011.36

 

35See MIPPA § 113(a), 122 Stat. 2503, 2504 (adding SSA § 1144 (c)(5)). SSA uses its 

annual administrative funding to administer various services, including the Old Age and 

Survivors Insurance, Disability Insurance, and SSI programs, among other services, and 

provide certain administrative support for programs primarily administered by other 

agencies, such as Medicare.

36See Boards of Trustees, Federal Hospital Insurance and Federal Supplementary 

Medical Insurance Trust Funds, The 2012 Annual Report of the Boards of Trustees of the 

Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds 

(Washington, D.C.: Apr. 23, 2012).

Estimated MSP 

Enrollment Increased 

from 2007 through 

2011 with the Largest 

Increases Occurring 

after the 

Requirements Took 

Effect
 

Page 17 GAO-12-871 Enrollment in Medicare Savings Programs

Table 4: Change in Estimated Medicare Savings Program (MSP) Enrollment, 2007 

through 2011

Month/year

Estimated 

MSP enrollment

Estimated annual 

increase in enrollment

Annual 

percentage increase

December 2007 6,740,940 233,190 3.6% 

December 2008 7,002,427 261,487 3.9

December 2009 7,195,390 192,963 2.8

December 2010 7,572,541 377,151 5.2

December 2011 7,961,274 388,733 5.1

Source: GAO analysis of CMS data.

Notes: These data provide an estimate of the number of Medicare beneficiaries enrolled in MSPs in 

December of the given year and the annual change in enrollment nationally. The data do not include 

individuals enrolled in the Qualified Working and Disabled Individuals program. The data may include 

some beneficiaries who are not enrolled in MSPs for whom states finance Medicare Part B premiums.

A number of factors may have contributed to the higher levels of growth in 

MSP enrollment in 2010 and 2011, including SSA application transfers 

and outreach, other MIPPA provisions and related changes to state 

policies, and the economic downturn.

• SSA application transfers. In response to our survey of state 

Medicaid officials about the effects of the application transfers on 

MSP enrollment, officials from 28 states reported that MSP enrollment 

has increased as a result of the application transfers. In contrast, 

officials from 12 states reported that the application transfers did not 

have an effect on MSP enrollment, and officials from the remaining 

10 states reported they did not know the effect of the transfers.37

While there are no nationwide data that demonstrate the effects of the 

SSA application transfers on MSP enrollment, 3 of the 6 states we 

contacted to supplement our survey tracked some information on the 

outcomes of applications transferred by SSA.38

 

37Officials from the remaining state did not answer the survey question about the effects of 

the application transfers on MSP enrollment.

As a result of the 

application transfers from SSA in 2011, Arizona reported enrolling 

about 800 of 16,000 applicants; Louisiana reported enrolling about 

38SSA collected data on the number of people who applied for LIS and were enrolled in an 

MSP in 2010 and 2011, about 280,000 individuals each year. SSA officials explained that 

the data are limited in that SSA cannot determine whether those enrolled in an MSP were 

enrolled as a result of their LIS application triggering an MSP application or because of a 

duplicate MSP application submitted to the state.
 

Page 18 GAO-12-871 Enrollment in Medicare Savings Programs

3,300 of about 21,800 applicants; and Pennsylvania officials reported 

enrolling about 16,000 of 37,500 applicants. It is not clear, however, if 

these beneficiaries would have enrolled in MSPs through other means 

if the application transfers had not been in place. For example, these 

enrollees may have instead enrolled by applying directly through the 

state.

• SSA outreach. As previously mentioned, SSA completed an outreach 

campaign in 2009 and has sent letters with information about MSPs to 

millions of potentially eligible individuals. Our prior work indicates that 

letters sent by SSA to potentially eligible individuals in 2002 resulted 

in more beneficiaries enrolling in MSPs than would have likely 

enrolled without receiving an SSA letter.39

• Other MIPPA provisions. The MIPPA provision that more closely 

aligned asset limits for MSPs with the limits for LIS expanded the 

number of beneficiaries eligible for MSPs in 2010. Specifically, the 

requirement effectively expanded eligibility in 41 states by increasing 

the asset limits.40 In addition, MIPPA-funded outreach conducted by 

states and other organizations that began in 2009 may have 

increased the likelihood that applications resulted in enrollment. 

According to data from the National Council on Aging (NCOA), the 

national resource center funded to track the outreach, grantees 

assisted about 200,000 individuals from January 2010 through 

December 2011 in submitting a complete MSP application.41

 

39

NCOA 

reported that grantees in most states are able to access the 

applications transferred by SSA to identify those beneficiaries who 

potentially need assistance completing the MSP application.

GAO-04-363. Using SSA data, we estimated that of the 16.4 million people who 

received SSA letters in 2002, an additional 74,000 recipients enrolled in MSPs than would 

have likely enrolled without the mailing. 

40Of the remaining 10 states, 9 did not consider a person’s assets when determining 

eligibility for MSPs, and therefore the MIPPA requirement did not expand eligibility in 

those states. They are Alabama, Arizona, Connecticut, Delaware, the District of Columbia, 

Maine, Mississippi, New York, and Vermont. The final state, Minnesota, had asset limits 

that were higher than the LIS limits prior to January 2010.

41NCOA defines assistance as providing follow up or resolving problems with an 

application that was (1) denied by the state, (2) delayed beyond the 45-day limit for 

determining eligibility, or (3) found to be incomplete by the state. The grantees are to

provide enough assistance to individuals so that the state can process the application.
 

Page 19 GAO-12-871 Enrollment in Medicare Savings Programs

• Economic downturn. It is unclear how the economy affects the 

population potentially eligible for MSPs. In 2011, we reported that 

during the economic downturn, from 2007 through 2010, 

unemployment among those aged 65 and older doubled and food 

insecurity increased.42 In addition, awards of SSA disability benefits to 

those ages 50 to 64 increased.43 However, our past work also found 

that the percentage of adults 65 and older with incomes below 

200 percent of the federal poverty level did not increase.44

Officials from four of the six states we contacted to supplement our 

survey reported making changes to Medicaid eligibility systems, 

specifically, changes to both information systems and business 

processes, to receive and act upon the applications transferred by SSA. 

For example, officials from Arizona reported modifying the state’s 

information system to accept the data and automatically create records 

for the individuals in the eligibility system and generate notification letters 

asking the applicants for additional information in order to complete the 

application. Officials also said that the state established new business 

rules for processing applications received through the transfers. Officials 

from Colorado, one of the two states that did not report making changes, 

told us that the state plans to make changes to its system pending the 

availability of funding to implement the changes. Because the state did 

 

42We found that among elderly households with incomes below 130 percent of FPL, the 

proportion classified as food insecure rose from 17.6 percent in 2006 to 24.0 percent in 

2010. The U.S. Department of Agriculture identifies families with food insecurity based on 

responses to questions in a supplement to the Current Population Survey concerning the 

inability, at times, to afford balanced meals, cutting the size of meals because of too little 

money for food, or being hungry because of too little money for food. Households are 

classified as having low or very low food security if they experienced the condition at any 

time during the previous 12 months. GAO, Income Security: Older Adults and the 2007-

2009 Recession, GAO-12-76 (Washington, D.C.: Oct. 17, 2011).

43The Kaiser Commission on Medicaid reported that Medicaid enrollees that are aged or 

living with disabilities are less sensitive to changes in economic conditions than other 

populations, such as children. However, using data reported by 45 states and 

Washington, D.C., they found that Medicaid enrollment for the aged and disabled grew by 

4 percent from December 2009 to December 2010 as compared to increases of 

3.4 percent and 2.7 percent in the two preceding 12-month periods. See Kaiser 

Commission on Medicaid Facts, Medicaid Enrollment: December 2010 Data Snapshot

(Washington, D.C.: December 2011).

44Additionally, the percentage of adults 65 and older with incomes below 100 percent 

of the poverty level declined from 9.7 percent in 2007 to 9.0 percent in 2010. See 

GAO-12-76. 

States Reported That 

the Requirements Led 

to Various System 

Changes and 

Increased Workload 
 

Page 20 GAO-12-871 Enrollment in Medicare Savings Programs

not have the funds to make the necessary system changes, officials said 

that they had to develop an interim process, under which transferred 

applicants receive an assessment of MSP eligibility only if the applicant 

completes the state’s request for additional information.45

Officials from five of the six states said that the application transfers had 

increased the state’s workload—the time spent processing applications 

for MSP enrollment—to some extent and that the additional work was 

absorbed by existing staff.

Officials from 

the final state, Pennsylvania, told us that the state did not make changes 

to its information system as a result of the application transfers but did 

establish business processes for sorting the applications and forwarding 

them to county assistance offices for processing.

46

 

45Under the state’s interim process, which was reviewed by CMS for compliance with the 

requirements, the state receives the transfers in a stand-alone database. That database 

generates notifications to transferred applicants that to be considered for MSP eligibility 

they must contact their county social service office or visit the state website to complete 

an application. If the person submits an application and the notification letter documenting 

the date of LIS application, the state will determine eligibility and, upon approval, will use 

the LIS application date when determining eligibility for MSPs. If the person does not 

submit the application, no determination of eligibility is made and there is no record of an 

application in the state’s eligibility system. Once the state’s system is updated, all 

applicants transferred by SSA will receive an eligibility determination for MSPs.

While states were able to make MSP 

determinations and generate notifications without the need for 

caseworker involvement for some of the 1.9 million applications sent by 

SSA since the transfers began in January 2010, other cases required 

follow-up calls with the applicant or cross-checking the data with other 

data sources for verification. Colorado, one of the five states reporting an 

increase in workload, provided data showing that the state received 

around 15 percent more applications in 2010 and 2011 than in 2009. 

However, officials from Pennsylvania, another of the states that reported 

an increase in workload, indicated that the effect was minimal. 

Pennsylvania officials noted that, while transfers have increased the 

volume of applications, processing applications for MSP is a relatively 

small portion of caseworkers’ overall workload. Officials noted that 

caseworkers process many more applications for other programs such as 

Medicaid and the Supplemental Nutrition Assistance Program than for 

MSPs. Officials from Louisiana, the one state that did not report an 

46Officials from the final state said that they could not determine the effect of the 

application transfers on the state’s workload, including the effect on the volume of 

applications received.
 

Page 21 GAO-12-871 Enrollment in Medicare Savings Programs

increased workload, said that it is difficult to determine the effect of the 

application transfers but that for some applications the transfers had 

reduced the time needed for processing.

States identified several reasons why processing the applications 

transferred from SSA had increased their workload, including that the 

transfers include applications for those who are clearly ineligible for 

MSPs, applications have inaccurate information, and applicants do not 

understand that their application for LIS is triggering an application for 

MSPs.

• The increased workload may have resulted from SSA transferring 

applications for individuals who are ineligible for MSPs because their 

income or assets exceed the federal MSP eligibility limits or they are 

not yet eligible for Medicare.47 In response to our survey, officials from 

one state reported that over 70 percent of the applications received 

from SSA are ineligible for the state’s MSPs but that the state is still 

required to process the application. The officials noted that processing 

these applications is not a productive use of limited state resources. 

Officials from Pennsylvania, one of the six states we contacted to 

supplement our survey, reported that, of the approximately 37,500 

applications transferred by SSA in 2011, about 14,600 had been 

denied LIS enrollment. Those rejected applicants represented a 

significant majority of the 21,600 rejected by the state for MSP 

enrollment. Officials told us that they have adjusted their process to 

automatically deny enrollment in MSPs for those individuals that were 

rejected by SSA for LIS because, for example, the person did not 

have Medicare or had income that exceeded the eligibility limits.

• In response to our survey and during interviews, officials from several 

states reported inaccuracies in the SSA data that may have made the 

applications more difficult for states to process. For example, 

Louisiana officials told us that the city of an applicant is sometimes 

misspelled in the SSA data. This triggers an error in the state’s 

system, which must be reviewed and corrected by the state.

 

47SSA officials told us that soon after application transfers began, SSA modified its 

process to delay transferring applications for those not yet eligible for Medicare until the 

applicant is within 1 month of eligibility. However, officials from several states reported that 

their states continue to receive applications for individuals who are more than 1 month 

away from being eligible for Medicare.
 

Page 22 GAO-12-871 Enrollment in Medicare Savings Programs

• In response to our survey, officials from several states also indicated 

that the state spends time requesting information from applicants who 

do not provide it because they do not understand that they have 

applied for MSPs. For example, officials from Virginia commented that 

individuals do not realize that their application for LIS is triggering an 

application for MSP and do not end up providing the additional 

information needed for the state to make a determination of MSP 

eligibility. Arizona officials stated similar concerns and provided data 

indicating that 63 percent of all of the applications transferred by SSA 

and processed by the state in 2011 were denied because the 

applicant did not respond to the state’s request for additional 

information.

The extent to which the SSA application transfers required system 

changes or affected workload may have depended on whether the state 

treated the transferred information as verified. Though CMS policy allows 

states to treat the information in the transferred applications as verified, in 

response to our survey, officials from 35 states reported requiring 

applicants to reverify some or all of the information before the state would 

determine eligibility for MSPs. States most frequently reported requiring 

applicants to reverify income, both earned and unearned, and assets.48

(See table 5.) Nine states reported requiring applicants to reverify all of 

the data elements transferred by SSA, including household size and 

identity.

 

48Our survey did not ask states whether the state’s methods for determining eligibility for 

MSPs were consistent with those used for LIS.
 

Page 23 GAO-12-871 Enrollment in Medicare Savings Programs

Table 5: Social Security Administration (SSA) Data Elements States Require 

Medicare Savings Program Applicants to Reverify

Data element transferred by SSA Number of states requiring reverification 

Earned income 30

Assets 29

Income not from work 28

Household size 19

Identity 11

Source: GAO survey of state Medicaid officials.

Note: Of the 51 states that responded to our survey, officials from 35 states reported requiring 

applicants to reverify one or more of the data elements transferred by SSA; officials from 15 states 

reported not requiring applicants to reverify any of the information; and officials from 1 state did not 

answer the relevant survey question.

In the six states we contacted, we found some evidence to suggest that 

the application transfers had less of an effect on workload in states that 

treated the transferred information as verified. Specifically, of the three 

states that we contacted that accepted SSA’s verification of the 

application information, two states reported being able to enroll some of 

the transferred applicants with little to no work required of caseworkers. 

Louisiana officials said that the transfers have allowed the state to 

autoenroll some applicants (where the eligibility system enrolls the 

applicant using the data transferred by SSA with no need for a 

caseworker to enter data or contact the applicant). For example, from 

March 2010 through January 2012, Louisiana autoenrolled about 

14 percent of applicants transferred by SSA (5,937 of 43,414).49 Officials 

said that the transfers have reduced the workload for these applications. 

Similarly, officials from Pennsylvania said that the number of applications 

received from SSA where caseworkers need to contact applicants for 

more information was small, because, in addition to treating the 

information as verified, the state has access to 12 different data sources 

that can be used to address any discrepancies in the SSA data and 

provide asset information that is not included in the SSA data.50

 

49Louisiana’s data indicated that, despite treating the SSA data as verified, about 

25 percent of applications received from SSA in 2011 required involvement of a 

caseworker. 

In 

contrast, in the three states we contacted that required applicants to 

50For example, the state reported accessing data from the Internal Revenue Service on 

earned and unearned income.
 

Page 24 GAO-12-871 Enrollment in Medicare Savings Programs

reverify some of the information (Arizona, Colorado, and Florida), the 

verification process included applicants reporting and documenting 

income and reporting and attesting to the accuracy of other information, 

such as assets and citizenship. This verification process included multiple 

steps by states and applicants.

Differences in how SSA and states count income and assets for LIS 

versus MSPs may have driven states’ choices to require further 

verification of information in the transferred applications. For example, 

several states noted that the LIS application combines income for a 

couple, whereas the state needs to know the income for each spouse 

separately to determine eligibility for MSPs. Officials from Arizona, one of 

our selected states that requires applicants to reverify income, explained 

that the state needs to know the income of each spouse as well as any 

dependent children living in the household to determine eligibility for 

MSPs. In a February 2010 letter to state Medicaid directors with guidance 

on implementation of the MIPPA requirements, CMS noted that SSA has 

a more expansive definition of a household in determining eligibility for 

LIS than what most states use to determine MSP eligibility. The guidance 

reminded states that they have the option to align their definition with 

SSA’s, and noted that doing so would expand eligibility for MSPs to more 

people and reduce states’ administrative burden in processing the 

applications transferred by SSA. Some states also count certain types of 

income and assets that SSA does not. For example, SSA does not count 

the value of life insurance policies against the asset limit, but states count 

it unless the state has amended its Medicaid plan to disregard it. States 

must verify whether applicants have life insurance policies either by 

contacting the applicant or through another data source.

Historically, MSPs have had low enrollment rates, with the Congressional 

Budget Office estimating in 2004 that only a third of eligible individuals 

were enrolled in the QMB program and an even smaller percentage in the 

SLMB program. Our estimates show that enrollment has grown each year 

for the last 5 years, with the largest increases occurring in 2010 and 2011 

(5.2 percent and 5.1 percent), the first 2 years the MIPPA requirements 

were in effect. The differences between how income and assets are 

counted for LIS and MSPs make it difficult for some states to act on the 

applications transferred by SSA without requiring additional information 

from applicants, a step that requires additional work by the state and can 

present a hurdle to applicants. Aligning the methods for determining 

income and assets for MSPs with those of LIS is an option currently 

available to states, and some states have used that flexibility. More states 

Concluding 

Observations 
 

Page 25 GAO-12-871 Enrollment in Medicare Savings Programs

may not have opted to do so because aligning these methods would likely 

expand the number of individuals who are eligible only for MSP, and not 

for other Medicaid, benefits. Because providing MSP benefits to such 

individuals is likely to increase costs to the state, states have no 

immediate financial incentive to provide MSP benefits to these 

individuals. Further, while aligning these methods may allow states to 

more easily act upon the applications transferred by SSA, it would create 

a method for counting income and assets for MSPs that may differ from 

how states assess eligibility for Medicaid, making it more complicated for 

states to assess MSP eligibility as part of assessing eligibility for 

Medicaid.

We provided a draft of this report to HHS and SSA to review. HHS did not 

provide comments. SSA stated, in an e-mail, that the report accurately 

describes its implementation of the requirements. SSA also provided 

technical comments, which we incorporated as appropriate.

We are sending copies of this report to the Administrator of CMS, the 

Commissioner of SSA, and other interested parties. In addition, the report 

is available at no charge on the GAO website at http://www.gao.gov. 

If you or your staff have any questions about this report, please contact 

me at (202) 512-7114 or kingk@gao.gov. Contact points for our Office of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. GAO staff who made major contributions to this report are 

listed in appendix II.

Kathleen M. King

Director, Health Care

Agency Comments
Page 26 GAO-12-871 Enrollment in Medicare Savings Programs

List of Committees

The Honorable Max Baucus

Chairman

The Honorable Orrin G. Hatch

Ranking Member

Committee on Finance

United States Senate

The Honorable Fred Upton

Chairman

The Honorable Henry A. Waxman

Ranking Member

Committee on Energy and Commerce

House of Representatives

The Honorable Dave Camp

Chairman

The Honorable Sander M. Levin

Ranking Member

Committee on Ways and Means

House of Representatives
Appendix I: GAO Methodology for Estimating 

Change in Medicare Savings Program 

Enrollment

Page 27 GAO-12-871 Enrollment in Medicare Savings Programs

To describe the change in Medicare Savings Program (MSP) enrollment 

from 2007 through 2011, we used data from the Centers for Medicare & 

Medicaid Services (CMS) to estimate annual enrollment and the change 

in annual enrollment over that period. The data, reported by states to 

CMS, included state-level information on the number of Medicare 

beneficiaries for whom states will pay the Medicare Part B premium.1

To assess the reliability of CMS’s data on MSP enrollment, we 

interviewed CMS officials about their efforts to ensure the quality of the 

data and reviewed the CMS policy manual outlining the requirements 

states must follow in reporting the data. We also asked officials about the 

limitations of the data and reviewed any statements about data limitations 

in published reports. Finally, we reviewed data for each month of 2007 

For 

our estimates we used data that represented the number of beneficiaries 

for whom states financed the Part B premium in December of each year. 

The data do not reflect enrollment for Qualified Disabled and Working 

Individuals, which CMS officials estimated numbered less than 300 

people nationally as of March 2012. In addition, the data include some 

Medicare beneficiaries who are not eligible for MSPs but for whom states 

finance the Part B premium. We excluded some but not all of these 

beneficiaries from our analysis. Specifically, we excluded those 

beneficiaries categorized as “medical assistance only” as those 

beneficiaries are not eligible for MSPs per CMS’s policy manual. We were 

not able to exclude those categorized as “medically needy”—beneficiaries 

who may or may not also meet the eligibility requirements for an MSP—

because CMS does not have data on this population for each of the years 

in our analysis. It is also likely that for a small percentage of beneficiaries, 

states did not specify the basis of eligibility, and therefore it is unclear 

whether they were eligible for MSPs or not. While CMS does not have 

data for each of the years in our analysis on the number of beneficiaries 

categorized as medically needy or with an unspecified eligibility category, 

4 percent were medically needy and 4 percent did not have an eligibility 

category specified as of May 8, 2012. Though our estimates of enrollment 

may be overstated, we believe that our estimates of the change in 

enrollment over the 5-year period are valid.

 

1

The data were derived from CMS’s monthly Third-Party Buy-In file, which contains data 

from the CMS Enrollment Database. Data in the Enrollment Database are used by CMS to 

track enrollment and bill state Medicaid programs for the Part B premiums for individuals 

whose premiums the state has agreed to finance. States submit data regularly to CMS for 

updates to the Enrollment Database. 

Appendix I: GAO Methodology for Estimating 

Change in Medicare Savings Program 

Enrollment 
Appendix I: GAO Methodology for Estimating 

Change in Medicare Savings Program 

Enrollment

Page 28 GAO-12-871 Enrollment in Medicare Savings Programs

through 2011 to identify any anomalies in the data. We determined the 

data to be sufficiently reliable for the purposes of estimating the changes 

in MSP enrollment nationally over time; where relevant we stated the 

limitations of the data in the findings.
Appendix II: GAO Contact and Staff 

Acknowledgments

Page 29 GAO-12-871 Enrollment in Medicare Savings Programs

Kathleen M. King, (202) 512-7114, kingk@gao.gov

In addition to the contact named above, Kristi Peterson, Assistant 

Director; Jeremy Cox, Assistant Director; Susan Barnidge; Krister Friday; 

Sandra George; Kristin Helfer Koester; Lisa Rogers; and Paul Wright 

made key contributions to this report.

Appendix II: GAO Contact and Staff 

Acknowledgments 

GAO Contact 

Staff 

Acknowledgments 

(291010)
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