Is State Losing Out On ConnPACE Revenue?

By Nancy K. Crevier

For every person who was a ConnPACE member, but who is no longer eligible as of July 1 because they qualify for Medicare (receive Social Security or Railroad Retirement payments), and who enrolls in the Medicare Savings Plan (MSP), the state loses a $45 ConnPACE application fee each year, plus it picks up the cost of Medicare Part B, a sum of approximately $100 per new MSP enrollee, said Newtown Social Services Director Ann Piccini. “There is no application fee for MSP, there is no monthly charge to cover Part B and D coverage. Income limit [for the MSP] has kept increasing. That’s the state for you. Connecticut is causing itself more costs by increasing the income limit all the time. It’s mind-boggling as to why the state is doing this at a time of financial problems,” she said.

She does not begrudge the health care assistance to the elderly and poor, she said, by any means, but why the state has opted to decrease ConnPACE eligibility in favor of a program that appears to cost it more is confusing to her and to some of the people it is assisting.

State of Connecticut Department of Social Services spokesperson David Dearborn explained, “ConnPACE provides a prescription drug benefit that is entirely state-funded. However, individuals who are determined eligible for the Medicare Savings Programs automatically qualify for the Medicare Part D Low Income Subsidy [“Extra Help”]. Medicare D and the LIS provide comparable coverage to ConnPACE, and since these benefits are federally funded, it shifts prescription drug cost from the state to the federal government.”

While the shift from state to federal government saves Connecticut on prescription drug costs, as ConnPACE beneficiaries migrate to MSP, “the state is also paying 50 percent of the Medicare Part B premiums for much of the MSP caseload, and 50 percent of the Medicare co-insurance costs for part of the caseload [depending on which particular MSP program applicants qualify for by income level],” said Mr Dearborn.

Most of the drug subsidies now are covered through Medicare Part D and federal LIS. “Before,” said Mr Dearborn, “they did not have access to LIS and were taking up state expenditures in ConnPACE, especially in the doughnut hole [a gap in Medicare Part D prescription plan during which the beneficiary is liable for 50 percent of drug costs].”

Generally, said Mr Dearborn, the federal government subsidizes the state for 50 percent of Medicaid outlay, since the Medicaid program funds MSP. “However,” he added, “there is one component of MSP that garners higher federal financial participation through a 100 percent federally funded grant block.” Nonetheless, he noted, there are costs to the state involved with the increased enrollment in MSP. Without a full financial analysis, Mr Dearborn was not able to say how much that cost could be.

“Not all of the people who want help with the Part D prescription plan need help paying for the Part B plan, covering doctor visits,” Ms Piccini, and that is unavoidable if they participate in MSP. “Many people are in the income range for assistance, but have assets not included in that, and can pay for Part B. They want to,” she said. Those clients do not want welfare from the government, or have the government, which is supposedly strapped for cash right now, paying for things that they can afford. “The federal government is having trouble paying bills, yet it is paying for people who can afford to pay. But, if people are eligible, they should sign up for MSP, because everyone else is taking advantage of it,” she said.

Of greater concern to her with the change from ConnPACE to MSP eligibility, said Ms Piccini, is her fear that people will drop the supplemental insurance they may have for Medicare Part B once they sign up for MSP.

“I say, ‘No!’” said Ms Piccini. “A lot of people do not understand that they can only go to state Medicaid provider doctors if they drop their own insurance. Their regular doctors, whom they may have seen for 25 years, may not be Medicaid providers. Then the individual ends up paying for the bills. It can be thousands,” she cautioned.

There is nothing currently that requires anyone applying for MSP to drop supplemental insurance, she said.

“Not only that, it is very hard to find a Medicaid provider doctor in this area who is accepting new patients, and many doctors are ceasing to take part in Medicaid, because they just can’t afford it,” Ms Piccini said. If a consumer is happy with his or her current doctor, she feels it is best to not drop insurance that will pay for continued services with that doctor.

“We want to keep the prescription costs low, and [MSP] does benefit more people. I just don’t see how it benefits the State of Connecticut,” mused Ms Piccini.