Senate settlement bill will increase financial hardship for Medicare participants
This week, as Senate Republicans continue to finalize the budget settlement bill, the new KFF analysis highlights the potential harm that can cause for older people and people with disabilities.
KFF found that billing could increase the financial burden associated with Medicare's expenses. In 2024, one-tenth (12% or 7.4 million) of Medicare beneficiaries spent more than 10% of their annual income on Part B premiums. This means they live $21,000 or less based on the 2024 B Part Premium amount ($174.70 per month).
Part B costs, especially the burden of low-income beneficiaries
Because the Medicare Savings Plan (MSP) helps cover Part B premiums and other costs, such as deductibles and cost allocations, the financial burden for low-income beneficiaries who do not participate in the MSP is particularly burdensome. In 2024, the high income limit for MSP eligibility is about $20,600 in most states. Some of the 7.4 million may not qualify—their income may just exceed the eligibility cutoff or savings, which makes them ineligible for assistance. However, some people may already be eligible but do not have admission because they do not understand the program, or because registering and retaining an MSP is administratively tiring.
By stopping rules designed to simplify these processes, the House and Senate settlement bill would result in more low-income people losing access to MSPs and having difficulty paying for health insurance.
By stopping rules designed to simplify these processes, the House and Senate settlement bill would result in more low-income people losing access to MSPs and having difficulty paying for health insurance. The Congressional Budget Office (CBO) expects that nearly 1.4 million low-income health insurance (more than 10% of the Medicare Medicaid population) will lose MSP coverage due to these simplified outages. It is important to note that simplifying the rules does not change the MSP eligibility criteria – people will lose benefits simply because the application and the re-certification process become more difficult.
Republican bills will save federal government by reducing MSP enrollment
Therefore, low-income beneficiaries who lose MSP will face a portion of the overall and income. For example, simplified rules will automatically include people receiving supplementary security income (SSI) into MSPs. The maximum gain for SSI people is $967, which is reimbursed by any other income received this month, and the savings must not exceed $2,000. The MSP automatically registered under the rules, qualified Medicare beneficiaries (QMBs) have a much higher income and asset limit than these amounts: non-work income is $1,325 and savings exceed $9,000. Although they explicitly comply with the MSP eligibility rules, the Republican settlement bill would allow people with SSI to apply for the program separately, and those tax cutters disproportionately benefit from high-income income when some of them fail to pay the savings to pay the tax break.
Although they explicitly comply with the MSP eligibility rules, the Republican settlement bill will allow SSI patients to apply for the program separately.
But people with health insurance will pay the price. Without QMB, SSI participants will pay 20% of their monthly income in 2025 to cover their Part B premium ($185). These financial burdens will grow over time, as annual Medicare is expected to reach nearly $2,500 in 2026 and over $4,000 by 2034.
Meanwhile, other health insurance costs will drain more of the limited beneficiary budget. For example, if these SSI participants pay for the full-year Part A and B portion A next year ($1,676 and $257, which will be covered by QMB), their coverage cost will consume at least one third of the annual SSI allocation. And, since MSP admissions automatically receive Part D Low Income Subsidy (LIS)/Extra Help, which helps cover Medicare’s prescription drug coverage, they will also work for these expenses. The Social Security Bureau estimates that LIS saves about $6,200 a year for registrants, a figure that could rise with drug prices.
Out-of-pocket expenses drive people access to medical services with fatal and financial consequences
Research has always found that even if it is necessary for health and safety, people who face higher health care costs can reduce the care they receive. This leads to health, higher care needs and more hospitalizations, thereby increasing costs for individuals and the entire system. Losing Medicare cost assistance may also increase mortality rates for low-income beneficiaries. The House bill's simplified rules delayed “can result in another 18,00 deaths per year among Medicare participants,” mainly because “loss of Medicaid also leads to the loss of prescription drug aid through the Low Income Subsidy (LIS) program.” The Senate bill further prohibits the permanent enforcement of the rule.
Combined, LIS and MSP make health care expenses easier to manage, allowing participants to maintain health insurance, fill in prescriptions and provide basic needs such as food and housing. Preventing more people from getting qualified help will ensure fewer people can use their due Medicare coverage. We urge Congress to reject the Budget Reconciliation Act and instead work together to improve the health and economic security of all Americans.
Preventing more people from getting qualified help will ensure fewer people can use their due Medicare coverage.
Take action! Congress's goal is to pass by July 4
Senate Republicans have not slowed down despite clear evidence that their bill would harm millions. They plan to vote immediately this week. Since both rooms have to pass a same bill to become law, the House will vote again. This could happen soon, as Republicans are watching the deadline for the final adoption on July 4.
This hastily schedule means it's time to go all out. Contact your legislators, activate your network, participate in events where your legislators are present, and participate in local media. Weigh today!
Read the KFF report, 7 million people using Medicare spend more than 10% of their revenue in Part B – the settlement bill could make the numbers higher
