Need Help With Your Medicare Costs?
The rising costs of healthcare are making it difficult for people to pay their monthly health insurance premiums, including seniors who have Medicare.
Just as private insurance companies raised their premiums in 2020, the federally funded Medicare insurance program did the same.
Medicare beneficiaries saw a 6.7 percent increase in Medicare Part B premiums this year while the annual deductible rose 7 percent. Medicare explained that the increase in the Part B premiums and deductible was largely due to an increase in spending on physician-administered drugs.
Fortunately, Medicare has several programs to help seniors with limited resources pay for their medical insurance premium and prescription drugs. The programs are available for all four parts of Medicare, which are the following:
1. Part A—Hospital Insurance. This is also known as “premium-free Part A” since people who paid Medicare taxes for a certain amount of time while working do not pay a monthly premium. However, those who buy Part A pay up to $458 a month in 2020.
2. Part B—Medical Insurance. These benefits cover doctor’s office visits, outpatient hospital services, durable medical equipment, preventative screenings, and certain other health services not covered by Part A. The standard monthly premium is $144.60 for 2020, while the annual deductible for all Medicare beneficiaries is $198 in 2020.
3. Part C—Medicare Advantage. The monthly premium varies since these plans are sold through private insurance companies approved by Medicare. Part C is an all-in-one alternative that includes everything that Part A and Part B covers, along with extra benefits, such as vision, hearing, and dental.
4. Part D—Prescription Drug Coverage. To have prescription drug coverage requires seniors to have Medicare Part A or Part B insurance coverage. The monthly premium varies because these plans are sold through private insurers.
Medicare Savings Program
Seniors with limited income may qualify for a Medicare Savings Program (MSP) that helps with monthly premium payments. The Centers for Medicare and Medicaid Services, which operates the national insurance programs, allows each state to manage the MSPs and decide on eligibility.
There are four kinds of MSPs that pay for all or part of the out-of-pocket Medicare costs:
- 1. Qualified Medicare Beneficiary (QMB) helps pay premiums for Part A, Part B, and other costs, including deductibles, coinsurance, and copayments.
- 2. Specified Low-Income Medicare Beneficiary (SLMB) helps pay for Part B premiums only.
- 3. Qualifying Individual (QI) is a state program that helps pay Part B premiums for Medicare beneficiaries who have Part A. QI applications are given on a first-come, first-served basis and priority is given to people who received QI benefits the prior year. Medicare beneficiaries must apply for the program every year.
- 4. Qualified Disabled and Working Individuals (QDWI) helps pay for the Part A premium. Medicare beneficiaries qualify for QDWI if:
- They are under 65 years old and are disabled.
- They lost their premium-free Part A when they went back to work.
- They are not receiving medical assistance from their state.
- They meet the income and resource limits required by their state.
Medicare bases eligibility for these programs on what it considers “countable resources,” which includes money in a checking or savings account, stocks, and bonds. A house, a vehicle, furniture, and similar items are not counted as resources.
Seniors may be eligible for the QMB, SLMB, and QI programs if their resource limits are $7,860 for an individual and $11,800 for a married couple. Resource limits for the QDWI program are $4,000 for an individual and $6,000 for a married couple. Limits are slightly higher in Alaska and Hawaii.
Extra Help Prescription Program
Seniors who are eligible for one of the MSPs automatically qualify for a prescription drug program that is worth about $5,000 per year. The Medicare Part D Low Income Subsidy Program, better known as the “Extra Help” program, provides financial assistance for monthly premiums, annual deductibles, and coinsurance related to a Medicare prescription drug plan.
The resource limit for this program is $14,610 for individuals and $29,160 for a married couple. The resources counted in this program include real estate, bank accounts, stocks, bonds, mutual funds, Individual Retirement Accounts, and cash at home or anywhere else.
Getting Help from Both Medicare and Medicaid
Adults over 65 with limited resources can receive additional help with paying for medical expenses through Medicaid, described as “the single largest source of health coverage in the United States.”
Medicaid is a joint federal and state program that provides health insurance to seniors, children, pregnant women, parents, and individuals with disabilities. Medicaid, however, acts as secondary insurance since it is not the first insurance to pay for services covered by Medicare.
Seniors who have Medicare and full Medicaid coverage are automatically enrolled in an MSP, so coverage is available for Medicare Parts A, B or C. What’s more, seniors automatically qualify for the Extra Help Program which pays for prescription drug costs. Medicaid may pay for some drug costs and other care Medicare does not cover.
How To Apply For Medicare Savings Programs
Medicare poses three questions to help seniors determine whether they qualify for an MSP in their state:
- Do you have, or are you eligible for, Part A?
- Is your income for 2020 at, or below, the income limits listed for any MSP?
- Do you have limited resources?
Seniors who answer “yes” to these questions should call their State Medicaid Program to see if they qualify for an MSP. For seniors who have income or resources higher than the amounts listed for an MSP but think they could still qualify, Medicare advises those seniors to also call or fill out an application.