MA cash cards could squeeze other senior benefits
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The popular debit cards that Medicare Advantage plans give older adults as a perk for signing up may be cutting off their access to some public assistance because of conflicting interpretations on what counts as income.
Why it matters: The "flex cards" are becoming more common in plans targeted to disabled and low-income older adults, according to an analysis from ATI Advisory shared with Axios. Almost half of all Medicare Advantage plans will feature the cards next year.
- Medicare advocates and members of Congress are pressing the Biden administration to clarify that such supplemental benefits shouldn't be considered income as the Medicare open enrollment period continues.
How it works: Medicare Advantage plans heavily market the debit cards, which can be used for groceries, utility payments or extra medical equipment such as walkers. The dollar amounts and restrictions on what they can be used for vary by plan, and the cards have sometimes been marketed in misleading ways.
- In 2025, the average standard flex card benefit will be $996 for the year, per ATI Advisory.
State of play: The hitch, according to seniors and aging services providers, is that flex cards are being counted as income in eligibility determinations for some other benefits and limiting older adults' ability to tap rental assistance or Supplemental Security Income.
- That could create double trouble for low-income older adults, especially if the flex cards come with restrictions that make them hard to use, said Mollie Gurian, vice president of policy and government affairs for aging services provider association LeadingAge.
- The IRS generally excludes payments from social welfare programs from recipients' gross income.
- But every agency that offers assistance programs has its own rules and restrictions around what counts as income, meaning benefits on the cards could be lumped with other sources of income. The plan-by-plan variation in supplemental benefits adds to the confusion.
Affordable housing providers are reluctant to apply the cards to rental assistance redeterminations, but they also don't want to create a situation where older adults have to pay extra rent on the back end because their income was incorrectly calculated, said Jules Bilowich, LeadingAge's director of housing operations and public policy.
- "At the end of the day, we are hearing examples where it does have a real negative impact on the housing resident," they said.
- Most MA benefits are excluded from a renter's income when applying for assistance from the Housing and Urban Development Department, but statutory mandates require some benefits that can be used toward utilities and rent to count as income, a HUD spokesperson told Axios.
- HUD is looking at the issue closely in partnership with Medicare officials to provide clarity in the near future, they said.
Where it stands: More than 30 Democrats in Congress wrote to President Biden this month urging him to clarify that, across federal agencies, the flex cards don't count as income or assets when calculating eligibility for other assistance and benefits programs.
- "Consumers should not be unfairly penalized due to a nominal benefit that cannot replace the services and assistance they receive from public programs," said the letter spearheaded by Rep. Lloyd Doggett (D-Texas).
- The White House didn't respond to a request for comment.
- AHIP, the trade group representing health insurance companies, would support guidance clarifying that flexible benefit cards shouldn't affect enrollees' eligibility for federal benefits or generate any taxable benefit, a spokesperson told Axios.
Case in point: Lynda Rogers, a Connecticut senior, has been told by her building manager that the $140 added quarterly to her Medicare Advantage flex card will count as income when she's reconfirming her eligibility for assistance to help cover the rent for her apartment this year.
- She told Axios she expects her housing costs will rise. Rogers thought about changing plans, but she needs the flex card from her current insurer to offset the $60 she has to spend each month for a generic over-the-counter medication her doctor advised her to take.
By the numbers: Nearly half (48%) of all plans will offer flex cards next year, up slightly from 45% this year, according to ATI Advisory. Even more plans will provide cards specifically for over-the-counter pharmacy products.
- The vast majority of Medicare Advantage plans available to "dual eligible" older adults who also qualify for Medicaid will have flex card benefits in 2025, per ATI.
- "People like the cards. They like benefits they can feel immediately, and they like to be the one determining what 'value' means to them," Allison Rizer, executive vice president of payer solutions at ATI, said in an email.
- "But plans constantly look at what is working and what isn't — the benefit will evolve and grow to meet demand but also in response to policymaker concerns."
