Low-income Medicare beneficiaries get help with their Medicare Part B premium and their prescription drug costs.  Income levels that qualify for help have been raised for 2013.

Anyone on Medicare with monthly income below $1,313 (individual) or $1,765 (married couple) can get help through the Medicare Savings Program, which is funded by the federal government, but administered through state Medicaid offices. In Tucson, the ALTCS  office (Arizona Long Term Care System) handles applications for this help.

Medicare beneficiaries who qualify for this help will get their Medicare Part B premium paid by the state. That means they will have $104.90 more in their Social Security check each month.  Then the state will send info to Social Security and get them signed up for help with their Part D and drug costs. This is called the Low Income Subsidy (LIS).

LIS and PRESCRIPTION HELP:

A person who qualifies for LIS pays $2.65 for generic drugs and $6.60 for brand drugs.  This is a really good deal, since most Part D plans have a $40 co-pay for brand drugs. Some Part D drug plans require an $8, or even $15 co-pay for generics. So the LIS program can save people a lot of money on their prescriptions.

POVERTY LEVEL:

Medicare beneficiaries with monthly income below $978 (individual) and $1,313 (couple) get more help. In addition to having their Part B premium paid by the state, they get help with their medical bills. The deductibles and/or co-pays that are part of Medicare and Medicare Advantage are paid by the state, so these folks should not have any out-of-pocket costs when they get medical care. These folks are called Qualified Medicare Beneficiaries (QMB).

In Arizona, QMBs are assigned an HMO health plan and they must use doctors in the plan’s network in order to get their medical co-pays covered by AHCCCS (Arizona medicaid). Then they have Original Medicare, or a Medicare Advantage plan to pay the major portion of their medical bills. But if they are enrolled in Medicare Advantage, they must make sure their doctors are in both their AHCCCS plan network and their Medicare Advantage plan network.

SPECIAL NEED PLANS:

There are Medicare Advantage plans available for QMBs that can avoid the confusion about coordinating two networks.  All AHCCCS plans now have related Medicare Advantage plans that are owned by the same company – and have the same provider networks. Additionally, these Advantage plans offer QMBs benefits that are not covered by Medicare, such as $1,000 of dental services per year; eyeglasses every two years; and money for hearing aids.

NOTE: I’ve included the $20 disregard for the income limit figures provided here. The actual limits are $20 less, but Medicare will “disregard” $20″ per month  – but only one $20 disregard is allowed for a couple.

ARIZONA AND ASSETS:

The state of Arizona, when considering an application for the Medicare Savings Program, does not care about a person’s assets. Arizona only looks at income, so a person can have money in the bank, IRAs, or a substantial life insurance policy and still qualify for this help.

Because Arizona does not ask about a person’s assets, it is best to apply for the Medicare Savings Program and LIS through the state.  If a person applies for help through Social Security, asset limits are considered – and they are very low:  $13,300 for an individual and $26,580 for a couple.

I recently helped a client apply for the LIS through SSA.gov. The online application for “Extra Help” was short and simple. In about two weeks she received a letter saying she qualified for LIS (help with her drugs costs).  The letter also said the state of Arizona had been informed that she might qualify for the Medicare Savings Program – but she had to apply for that help.

The state sent this lady the application form and I helped her fill it out. Now she must wait 30 to 45 days for the state to process it.  In the meantime, her Medicare has started and she is paying the Part B premium.

So I learned something from this experience:  We should have started the whole process through the state.

It’s the Medicare Open Enrollment Period and I’ve been busy talking to lots of people about their Medicare choices.  I’ve had to tell several people I cannot help them.  Here are two true stories:

Shopping for a lower Medigap premium

Sue (not her real name) has always had a Medicare supplement. Last year, her Medicare supplement premium went up once again as she turned 76, so she decided to shop around for a better deal. She found a much lower premium for the same Plan F and she grabbed it. I can’t name names but I sure would like to because this company gets lots of new business by offering the lowest premium in town – and then raises their premium more than 30 percent each year.

So Sue was once again shopping for a Medicare supplement when she called me. I asked her if she is healthy and she said “yes”. Then I took out a Medigap application and ran her through the health questions. Turns out she had one of her carotid arteries cleaned out recently, and now she’s in great shape. Unfortunately, there is a question on the application about having been diagnosed with, or treated for carotid artery disease. Sue must answer yes to this question – so she would be denied coverage by most Medicare supplement plans. There are two companies I know of that would accept her, but they would  bump her up to a higher rate which is over $300 per month (in Arizona).

Junk Mail

I got a call from a man who said he is 77 and has a Medicare supplement and a Part D plan. He said he wanted to look at his options for his Medicare coverage because he had received lots of mail telling him to do just that.

I asked him if he was happy with his supplement and if he could afford the monthly premium.  He said he is very happy with his supplement which leaves him with no co-pays for his medical care. (Medicare pays first and his supplement pays second.) He said he thinks his medigap premium is reasonable.

I told this man he has the best coverage possible, and unless he is interested in Medicare Advantage, he doesn’t need to shop around. We talked briefly about Medicare Advantage and how it compares to Medicare plus a supplement.  We also talked about the mailers he has received, all of which were from Medicare Advantage companies. I told him this is all junk mail for someone like him who has excellent coverage and is happy with it.

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I am a lousy salesperson. I think people should stay where they are if their coverage is working for them.  I feel bad about telling someone she has to live with the bad choice she made about her Medigap plan. I could sign that lady up for Medicare Advantage…. except that I think she has the best coverage for her age, even with the higher Medigap premium she is now paying.

There are plenty of people out there I can help with their Medicare choices. It is a luxury to be able to tell people the truth – that I can’t help them.