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.

Health Net’s Amber plan, a Medicare Advantage plan for low-income Medicare beneficiaries, is changing drastically for 2011.  I haven’t talked to one person enrolled in this plan who knew about the changes and understood that they had to find a new plan.  My question to Health Net and Medicare is:  How can you get away with this?

Health Net’s Amber plan has been a God-send for many of my clients who have incomes below $1,240 per month. The plan is also open to Medicare beneficiaries who make less than $930 per month and get cost sharing help from AHCCCS (Arizona Health Care Cost Containment System, Arizona’s Medicaid). Health Net is changing the Amber plan for 2011 such that it will only serve this lowest income group whose cost sharing is paid by AHCCCS (pronounced “access”).

I have been able to get in touch with most of the people I enrolled in this plan over the last three years whose income (above $930 per month) will require them to enroll in a new plan.  I have had to explain that the Amber plan will require them to pay 20% of the cost of any medical service.  This is just like having only Medicare.  Just about everybody I’ve told this to has looked back at me with a blank look that tells me that don’t fully grasp why they need to leave this plan. The Amber plan has worked so well for them because it has had no, or very low co-pays and $1,500 of dental coverage each year.

The vast majority of my low-income clients are challenged to understand what the plan changes mean for them. And none of them can afford the co-pays that come with standard Medicare Advantage plans:  $40 co-pays for specialists; $250 per day for a hospital stay; no dental or transportation benefit.

So why has Health Net made this change?  Medicare pays Health Net a lot of money for each person enrolled in the Amber plan, and the payment is higher than what Health Net receives for enrollees its “standard” Ruby plans.  With this change, Health Net can dump enrollees who have paid only a $20 co-pay to see a doctor or $100 per day for a hospital stay.   Instead Health Net can get more money from the state of Arizona (AHCCCS) which will pay 20% of the charge for all services.  While this benefits Health Net, thousands of people enrolled in the plan, whose 20% co-pays will not be covered by AHCCCS, must move to another plan – if they have figured this out.

Because so many people enrolled in the Amber plan are old, sick, and sometimes mentally challenged, I do not understand why Medicare is allowing Health Net to force these vulnerable people to change plans.  I have a client on the Amber plan who is on a transplant waiting list at University Medical Center, and Health Net is the only Advantage plan that contracts with UMC.  There is no good second choice for this man, yet he’ll be thrown off the transplant list if he has to pay 20% of his medical bills.

The big change to the Amber plan is probably a good business decision for Health Net, but it’s a very bad deal for thousands of people enrolled in the plan whose higher than $1,240 monthly income will force them off the plan – if they even know they need to change to another Advantage plan.

UPDATE:   Humana is now contracted with University Medical Center, so their Medicare Advantage plan is the one alternative for my client on the heart transplant waiting list – if he can afford all the co-pays that come with this plan.

Open Enrollment for Medicare Advantage plans has ended, and most people are locked into their plan for the rest of the year.  But there are exceptions for people with certain chronic illnesses or low income subsidies.

CareMore has Medicare Advantage plans for people with diabetes or breathing illnesses, and because these are “special needs plans”, people can enroll in them all year long.  In order to qualify for these plans, a doctor must sign a form confirming that the Medicare beneficiary has the chronic illness.

Evercare has Medicare Advantage plans for people with certain chronic illnesses such as heart disease, respiratory disease (such as asthma), high blood pressure, diabetes or dementia.

Low Income Subsidies: Medicare beneficiaries who are getting help with their Part B premium or Part D drug costs can change Medicare Advantage plans throughout the year.

People who have monthly income of  less than $1,354 (for a single person) or $1,821 (for a couple) can get help with their Part D premium and their prescription costs.  This help is received through an application to Social Security.

AHCCCS (Arizona Medicaid) will pay the Medicare Part B premium for a single person living on less than $1,218 per month, or a couple with monthly income of less than $1,639.  An application for this help is made to AHCCCS and usually requires a copy of the annual letter from Social Security that shows how much a person receives and what is deducted from that amount. The qualifying amount is the gross Social Security payment – before $96.40 (or $110.50) is taken out for the Medicare Part B premium.

If AHCCCS approves the application for “Medicare Cost Sharing”, they will notify Social Security that the individual or couple also qualifies for help with their Part D premium and drug costs.

FYI:  AHCCCS stands for Arizona Health Care Cost Containment System and is pronounced “access”.

So, while the vast majority of Medicare Advantage enrollees are “locked into” their plans, about 30% of seniors qualify for the low income subsidy, and many have chronic illnesses that would allow them to join a special needs plan.

FOR MORE INFORMATION ON MEDICARE CHOICES IN ARIZONA, check out my website.