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.

There are two ways to apply for help with Medicare costs and prescription drugs. A person on Medicare can apply through the state Medicaid Program or go through Social Security. I recently helped a lady apply for help through the Social Security website, SSA.gov. Within two weeks she got a letter telling her she qualifies for help with her drug costs.

Rosa is turning 65 in April and is still working. Rosa is collecting Social Security, and if this was her only income she would qualify for the maximum help with her Medicare and prescription drug costs.  Because Rosa’s case is a bit complicated with her two income sources, I figured the best way to ask for help was through SSA.gov.  So we got on the computer, went to SSA.gov  and clicked on the link that says “Get extra help with Medicare prescription drug costs”.

We answered a few questions, hit apply, and Rosa’s request for help was submitted. She had given Social Security permission to check her income tax records which would be used to see if her income is low enough to qualify for help.

About two weeks later, Rosa received a letter from Social Security. I went by her house to look at the letter because the language is not real clear about what level of help she might get. The good news is that she qualifies for the maximum subsidy for her drug costs. That means she will pay $6.60 for brand drugs and $2.65 for generics. This help is called the “Low Income Subsidy”.

The letter showed Rosa how Social Security calculated her income, which (as far as I can tell) says her income is around $1,300 per month.  The letter said Social Security will pass on this information to the State of Arizona to see if she qualifies for help paying her Medicare Part B premium. But $1,300 per month is a bit too high to get this help (as far as I know). So I told Rosa to call me when she gets the letter from AHCCCS (Arizona Health Care Cost Containment System).

A person can apply through their state Medicaid office for help.

Another way to apply for help with Medicare costs and drug costs is to go through AHCCCS (in Arizona). But my experience with AHCCCS has taught me the following:

1) Never go through DES. ALTCS (Arizona Long Term Care System) handles applications for the Medicare Savings Program.

2) The state cannot process an application for help more than one-month before a person’s Medicare is set to begin.

3) If a person is not yet collecting Social Security, the state office can’t deal with their application. I think the same can be said if a person is still working.

4) The state of Arizona does not care if a person has money in the bank, while Social Security does care. So if a person has some savings, but is only living on their Social Security benefits, it is best to apply through the state of Arizona. Social Security will reject an application from a person who has more than $13,300 in savings or a couple with more than $26,580 in savings and investments.

Happy New Year!  I read the bill the U.S. Senate passed on New Year’s eve, and it includes an extension of funding for the QI-1  program. The QI-1 program pays the Medicare Part B premium for people with monthly income below $1,277 (individual) or $1,723 (a married couple). (See more details at the bottom of this page.)

Anyone in Arizona who received a letter from AHCCCS saying they will have to pay the $104.90 Part B premium can breathe a sigh of relief…. and wait to see what the Republicans in the House of Representatives do with this bill.

We must wait and see if the House of Representatives will approve the bill which covers a very long list, including: the extension of unemployment benefits; extension of a long list of  individual tax deductions; extension of a long list of  business tax deductions;  continuation of tax credits for energy efficient homes, and tax credits for alternative energy production.

UPDATE 1/2/2013: The House of Representatives passed the bill, so QI-1 is approved for 2013.

Other Medicare-related issues included in the bill that interested me are:

Medicare physician payment update (Sec. 601):  Puts off the 27% cut to doctor fees. This has happened every year since 1997, which is why the “required” cut to doctor fees is 27% this year. It will be bigger next year – but these cuts will never be imposed because doctors would stop accepting Medicare patients.  Apparently this has something to do with making the Medicare budget forecast look better than it really is.

Extension of specialized Medicare Advantage plans for special needs individuals (Sec. 607): Extends chronic illness plans through 2014.  This is a pilot program that was supposed to end in December 2013.  The Medicare Payment Advisory Committee (MEDPAC) had advised against continuing funding for these plans.

Special needs Advantage plans get higher payments from Medicare than do standard plans. Chronic illness Advantage plans offer lower out-of-pocket costs for people with Diabetes, various heart conditions, and breathing illnesses such as COPD. People can enroll in these plans any time throughout the year if their health problems meet the chronic illness criteria.

Extension of funding outreach and assistance for low-income programs (Sec. 610):  Continues funding for Area Agencies on Aging that provide help to low-income seniors. The Pima Council on aging gets this funding to support their work.

*****Explanation of income levels and help they receive:*****

The QI-1 program is funded each year, and each state gets a certain amount of money. The state can run out of funds for this program at the end of the year, so people who apply for this help in November or December might be turned down. They should apply again in January when funding has been replenished.

The QI-1 program helps people whose income is below $1,277 (individual) or $1,723 (a married couple), but above $1,117 (individual) or $1,513 (couple).

SLMBs (Specified Low-Income Beneficiaries) are people with income between $931 and $1,117 (individual) and $1,513 (couple). The state must pay their Medicare Part B premium and there are no funding issues like those that come with the QI-1 program. $20 can be added to these figures when determining if a person qualifies for this help.

QMBs (Qualified Medicare Beneficiaries) have income blow $931 (individual) and $1,261 (couple). $20 can be added to these figures when determining if a person qualifies for this help. QMBs get help with their Part B premium and all the medical co-pays that come with Medicare.  In Arizona, QMBs are assigned an HMO health plan and they must use doctors in the plan’s network in order to get co-pays covered by AHCCCS (Arizona medicaid).

Assets: The state of Arizona, when considering an application for help through the Medicare Savings Program (QI-1, SLMB, and QMB), does not consider assets. Arizona only looks at income, so a person can have money in the bank, two houses, or multiple cars and still qualify for this help.