Medicaid expansion under the Affordable Care Act has expanded coverage to millions of adults with incomes up to 138% of the federal poverty level, but this pathway ends when individuals become eligible for Medicare. Beneficiaries must requalify for Medicaid by more restrictive pathways that include asset tests and lower income thresholds, which create potential gaps in coverage. These gaps are specifically concerning because Medicare includes higher out-of-pocket costs, which include premiums, deductibles, and coinsurance. Although programs like Medicare Savings Programs (MSPs) and full-benefit Medicaid can help offset these costs, prior evidence suggests that enrollment in these programs is incomplete, potentially because of administrative complexity and lack of awareness.
The published study in JAMA Open Network aims to evaluate patterns of Medicaid coverage during the 1st year of Medicare enrollment among adults previously enrolled in Medicaid expansion and to assess whether state policies specifically waive MSP asset tests. They are linked to improved Medicaid enrollment and continuity. It also determines whether removing asset tests reduces barriers to enrollment in MSPs and increases overall Medicaid coverage for newly eligible Medicare beneficiaries.
Researchers used linked national administrative datasets, including Transformed Medicaid Statistical Information System Analytic Files and Medicare Beneficiary Summary File, from 2017 to 2019. The study population consisted of 266,009 adults who transitioned to Medicare in 2018 after being enrolled in Medicaid expansion in the preceding month. The sample included beneficiaries from 31 states and Washington, DC. All included states had adopted Medicaid expansion by 2018. Among them, six states and the District of Columbia had eliminated the MSP asset test. Individuals who relocated between states were excluded to maintain consistency in policy exposure.
The primary outcomes were enrollment in MSPs and any Medicaid coverage during the first 12 months of Medicare enrollment. Statistical analyses included descriptive comparisons and multivariable linear probability models to estimate differences in coverage outcomes between states with and without asset tests. The models adjusted for demographic characteristics (age, sex, race/ethnicity), reason for Medicare eligibility (age, disability, or end-stage kidney disease), prior Medicaid utilization, health status (measured by using CMS Hierarchical Condition Category scores), neighborhood socioeconomic vulnerability, and other state-level Medicaid eligibility policies. State-level clustering of standard errors was applied. Statistical significance was defined as P < 0.05. Sensitivity analyses were conducted to test robustness of findings in subgroups and data quality conditions.
The results showed substantial gaps in Medicaid coverage after transition to Medicare. MSP enrollment increased from 20% in the 1st month to 48% by the 12th month of Medicare enrollment. By the end of the 1st year, only 61% of beneficiaries had any Medicaid coverage. 37% had no Medicaid coverage at all. 22% of beneficiaries were enrolled in the Medicare Part D Low-Income Subsidy but not Medicaid. This suggests that many individuals who were likely eligible for assistance were not enrolled in MSPs.
State-level variation was considerable. In states that waived the MSP asset test, the median proportion of beneficiaries with MSP coverage at 12 months was higher (53% vs 41%) as compared with the proportion with any Medicaid coverage (65% vs 51%). When adjusted analyses were conducted, there was no statistically significant difference in MSP enrollment between states with and without asset tests (47% vs 48%). Beneficiaries in states without asset tests were significantly more likely to have any Medicaid coverage with a 10% point higher probability at 12 months (95% confidence interval (CI): 3 to 17), a 14% point higher likelihood of having at least 6 months of coverage (95% CI: 5 to 22), and a 16% point higher likelihood of continuous 12-month coverage (95% CI: 6 to 26). These findings were consistent in sensitivity analyses and subgroups, which include those stratified by age and disability status.
This study shows that many low-income adults lose Medicaid coverage or fail to enroll in assistance programs after transitioning to Medicare, increasing their financial burden. It does not appear to increase MSP enrollment; however, eliminating MSP asset tests may help sustain Medicaid coverage. This suggests that changes in eligibility policies alone are not sufficient. The continued under-enrollment in eligible individuals points to administrative barriers like complex processes and limited outreach. Policy changes must aim to simplify enrollment, improve Medicaid-Medicare coordination, and support beneficiaries during transitions to reduce coverage gaps and affordability issues for low-income Medicare beneficiaries.
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
