Lamont proposes asset test for Medicare Savings Program

Before Natalie Torranto qualified for the state’s Medicare Savings Program three years ago, the former nurse used to skip her chemotherapy pills every other day.

Now, the program covers her health care premiums and leukemia drugs, which cost more than $600 a month. The Easton woman doesn’t have to decide between paying for medication and buying vegetables at the market, she said.

But Torranto, 84, is worried. Lawmakers soon will decide if they want agree with Gov. Ned Lamont and remove this help from about 18,000 of Connecticut’s elderly.

The cut would save the state $25.6 million in the second year of the biennial budget set to start on July1. It’s one of the very few reductions in Lamont’s budget, and by no means an easy sell. Lawmakers have united in bipartisan opposition to reductions in eligibility for the Medicare Savings Program.

“I would much rather try to find other ways to account for that (money) in the budget than MSP,” said Matt Ritter, the House majority leader.

Lamont’s budget would implement an asset test for the Medicare Savings Program, which helps people 65 and older afford their health care costs. Effective in July 2020, individuals with $7,560 in their checking or savings accounts, stocks or bonds would be excluded from the Department of Social Services program. The asset cap would be $11,340 for a family. Some assets, like someone’s home, one car, a burial plot and personal items would not be counted.

Torranto believes she would be kicked off the program.

“If they set asset limits at those small amounts, none of us will be able to qualify, so we will be using up any monies we have set aside to take care of ourselves and then we’re ultimately going to be wards of the state,” she said. “My assets will go very fast, and somebody else is going to have to pay for my medication and whatnot.”

Melissa McCaw, secretary of the Office of Policy and Management, said Lamont “struggled” over whether to propose the asset test. Connecticut is one of eight states that does not have one, she said.

The biggest savings in Lamont’s budget comes from asking unionized state employees for more concessions, reamortizing underfunded teacher pensions and shifting some of the pensions costs to towns. Those concessions and cost shifting could save the state about $180 million each in fiscal year 2020, and the pension smoothing will save the state from a multibillion-dollar liability projected for just a few years out.

Trimming state spending by cutting the Medicare Savings Program was tried by lawmakers in 2017, as they battled to pass the last state budget.

But the reduction, which would have affected more than 90,000 elderly, prompted so much outcry from Connecticut seniors that it was easily reversed by the General Assembly, even after Gov. Dannel P. Malloy vetoed the measure in attempt to force legislators to reckon with the state’s growing deficit. Lawmakers voted to take millions from the teacher’s retirement account, Department of Administrative Services and other areas of state spending to replenish the funds for this program.

Adding an asset test to the program has been proposed before by lawmakers and never made it out of committee, said Sen. Marilyn Moore, D-Bridgeport, who chairs the Human Services committee, which must approve Lamont’s proposal first. She predicted with the governor’s support, this year might be different, however.

“If it works in other places and people aren’t being hurt by it, I think we should take a really good look at it,” Moore said.

Even with an asset test, the state’s program will still be generous, McCaw said, because the income threshold to qualify for the program is high, compared to most states.

Reducing access to the Medicare Savings Program may end up increasing Connecticut’s overall Medicare spending, said Marie Allen, executive director of the Southwestern Connecticut Agency on Aging and Independent Living. More seniors may end up hospitalized or in nursing homes, which come with an even bigger Medicare price tag, if they cannot afford their medications or preventive care.

“Connecticut successfully reduced costs, and in many cases, increased benefits for lower to middle-income Medicare recipients through the Medicare Savings Program,” said Nora Duncan, Connecticut director of AARP, which opposes the asset test. “It was the result of significant negotiations, designed to reduce state budget expenditures and maximize federal dollars.”