Medicaid Coverage Remains Suboptimal After Medicare Enrollment
Key Takeaways
- Among 266 009 Medicare beneficiaries previously covered by Medicaid expansion, 61% had some form of Medicaid coverage after the first year of enrollment.
- States that waived the Medicare Savings Program (MSP) asset test had more beneficiaries with Medicaid coverage than states that did not waive the asset test.
- The number of beneficiaries without coverage illustrates the need for improved policies and processes to optimize Medicare and Medicaid enrollment.
For adults covered by Medicaid expansion, transitioning to Medicare can lead to substantial out-of-pocket costs if beneficiaries do not retain Medicaid coverage. The MSP covers Medicare cost-sharing and premiums, but most states require enrollees to meet an asset test to qualify.
Researchers examined patterns of Medicaid coverage during the first year of Medicare enrollment among beneficiaries previously enrolled in Medicaid expansion. They compared rates of MSP or some form of Medicaid coverage in states that waived the MSP asset test against states that did not waive the test.
Using the Transformed Medicaid Statistical Information System Analytic Files (TAF) and the Medicare Beneficiary Summary File (MBSF), the study identified 266 009 Medicaid expansion beneficiaries who enrolled in Medicare in 2018.
Within the study sample, 79% of beneficiaries lived in states with the MSP asset test, and 21% lived in states without it.
MSP and Medicaid Coverage after Medicare Enrollment
MSP coverage increased from 20% in the first month of Medicare enrollment to 48% by month 12. At 12 months, 61% of beneficiaries had some form of Medicaid coverage, and 37% lacked Medicaid coverage.
MSP coverage at 12 months was similar between states with the asset test and states without, 48% vs 47%, respectively.
Beneficiaries in states without the test had higher rates of Medicaid coverage than those in states with the test, 67% vs 59%, respectively. This finding demonstrates that waiving the MSP asset test could increase overall Medicaid coverage.
State-level rates of MSP or Medicaid coverage varied widely, but states without the asset test had more beneficiaries with MSP coverage than states with the asset test, 53% vs 41%, respectively. This data highlights the potential benefits of state outreach and streamlined Medicaid and MSP enrollment procedures.
Implications for Health Plans
The study’s findings illustrate the challenges in Medicare enrollment for beneficiaries, including multiple coverage decisions and new Medicaid eligibility requirements. Financial assistance among low-income beneficiaries remains suboptimal, but eliminating the MSP asset test could improve Medicaid retention and increase coverage.
The authors noted, “[P]ersistent gaps in MSP enrollment and variability across states underscore the need for policies and processes that facilitate a smooth transition from Medicaid to Medicare for low-income adults. These interventions would mitigate the affordability challenges associated with Medicare premiums and cost-sharing.”
Reference
Yang Z, Cheng D, Price M, et al. Medicaid retention after transition to Medicare among adults with expansion coverage. JAMA Netw Open. 2026;9(4):e268560. doi:10.1001/jamanetworkopen.2026.8560
