Can't ignore deficit when restoring Medicare Savings Program

As bad as the state’s fiscal troubles may be, finding savings by sharply reducing the eligibility requirements for the Medicare Savings Program was a mistake that sought to balance the budget by taking aid from the most vulnerable. The program uses Medicaid money to help elderly low-income individuals pay medical expenses that Medicare doesn’t cover for premiums, co-pays and deductibles.

By national standards, Connecticut’s MSP is generous. Some changes to cut its costs may be in order. Unlike most states, Connecticut does not consider a person’s assets in deciding eligibility. Perhaps that should change. But the cuts passed in the most recent budget went too deep.

As they prepare for a special session to address that mistake, and at the same time work to repair problems with a budget that faces an estimated $208 million deficit, legislators need to own up to the decision they now regret.

At a meeting at the New London Senior Center on Wednesday, Rep. Chris Soto, D-New London, did just that.

“There was a bunch of things on the table, and this was one of the things that we decided to take that money from,” said Soto. “We’re in a tough spot in terms of money, but we recognize this was a cut we should not have made.”

However, state Sen. Paul Formica, R-East Lyme, appeared to suffer from a bout of amnesia.

“This was not something we expected to face,” said Formica.

The senator told us Thursday the program change was sold to the legislature as a way to match up with other states, but the severity of the cuts took him by surprise.

They shouldn't have.

Way back in February, when Gov. Dannel P. Malloy put these cuts on the table, testimony before the Appropriations Committee made it quite clear how devastating they would be. Formica is the co-chair of that committee.

Jean Mills Aranha, an attorney at Connecticut Legal Services, testified about how difficult the program cuts would make things for many poor, elderly people when it came to affording medicine and medical care.

“If this person (under the reduced eligibility standards) has to go into the hospital even for a day or so, she has to pay $1,316 deductible, that’s pretty much her whole monthly income,” testified Aranha, providing a tangible example.

“Somebody with $1,325 (monthly) is basically not going to have medical coverage,” Aranha told the committee. “You are looking at a lot of people at the end of the day either not having medical coverage or not eating, not paying their rent, and these … are 39,000 people already on the program … living month to month and check to check.”

Kevin Brophy, director of the Elder Law Unit for Connecticut Legal Services, warned the committee that it was considering slashing “one of the most popular programs for seniors and individuals with disability. This Medicare Saving Program is a terrific program.”

Yet the plan to lower income eligibility for the MSP made it into the Republican budget that won approval in mid-September after several Democrats crossed the aisle to support it. After Gov. Malloy vetoed that budget, the changes to the MSP ended up in the budget that finally won bipartisan approval and received the governor’s signature.

The Office of Fiscal Analysis had detailed the changes for the legislature. Annual income limits to qualify for assistance under the program dropped from a range of $25,477-$29,668 down to $12,060-$16,281.

When thousands of older residents on low, limited incomes learned of the planned changes, they began contacting lawmakers in a panic. Now legislators appear desperate to restore the old income guidelines and the $54 million to pay for the assistance a restored program would cost.

In budgeting that $54 million, the legislature would exacerbate the estimated $208 million deficit. Malloy has suggested a combination of an increase in the sales tax and spending cuts to close the gap. In other words, there are no easy or popular alternatives. The budget passed in October did not fix things.

In a letter to Democratic leaders, Sen. Len Fasano of North Haven, the Republican Senate president in the 18-18 split body, wants to restore the MSP — which he also voted to cut — as a “standalone” matter and not dive into a budget fix.

Formica says he agrees. Fix the MSP now and put off deficit repair until January.

Adding in money is the easy part, we get it. But you can't put off the hard part, closing the deficit, for very long.

The editorial board is composed of the publisher and four journalists of varied editing and reporting backgrounds. The board's discussions and information gained from its meetings with political, civic, and business leaders drive the institutional voice of The Day, as expressed in its editorials. The editorial department operates separately from the newsroom.

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