Medicare Savings Programs - Limited Opportunity for QMB and LIS

The Medicare Part A open enrollment period began January 1st and ends March 31, 2008. Medicare Part A enrollment has become particularly important for lower income people. In addition to the important benefits covered under this component of Medicare (primarily hospital, skilled nursing facility and some home health coverage), Part A enrollment triggers eligibility for assistance with health care costs for certain low-income people.

Attention advocates for residents of the following states: Alabama, Arizona, California, Colorado, Illinois, Kansas, Kentucky, Missouri, Nebraska, New Jersey, New Mexico, Oregon, South Carolina, Utah and Virginia.

According to the Centers for Medicare & Medicaid Services (CMS), your state does not have a Medicare Part A Buy-In Agreement that allows individuals to enroll in Medicare Part A at any time during the year in order to become eligible for help with Medicare cost-sharing under the Qualified Medicare Beneficiary (QMB) program. If your clients do not currently have Medicare Part A, they must enroll in Part A before March 31, 2008 in order to be entitled to QMB benefits in 2008. QMB, in turn, will entitle them to the full Part D Low-Income Subsidy (LIS). For those who cannot afford the Part A premium, a conditional application process is available.

What is QMB?

Eligibility - Under the QMB program, states pay all Medicare premiums, deductibles and co-insurance for aged and disabled people with countable incomes below 100% of Federal Poverty Levels (FPL) and with countable resources below $4,000 for an individual and $6,000 for a couple. (Some states allow larger amounts of resources or have no resource limit at all. Check your state’s rules.) The current 2008 income eligibility limit for QMBs in the 48 contiguous states and the District of Columbia is $886.67 per month for an individual and $1186.67 per month for a couple. (Amounts are higher for Alaska and Hawaii.) This amount includes a universal $20 income disregard. It does not include disregards allowed for earned income (the first $65 and one half of the remainder). (The monthly eligibility changes each year after the publication of annual income poverty guidelines, usually in January. The limits for 2008 are at 73 Fed. Reg.3971. January 23, 2008.)

Benefits - QMB benefits for 2008 include $1156.80 in Part B premiums, a $1024 hospital deductible, $128/day co-payment for skilled nursing facility services after the 20th day, the Part B annual deductible of $135, as well as the 20% co-insurance on most Part B services. For those without premium-free Part A, they also include over $5,000 in Part A premiums. The full Medicare Part D low-income subsidy is available through QMB; it is estimated by CMS to have an average value of about $3600.

Connection to Medicare Part A - Eligibility for the QMB program is dependent upon an individual's entitlement to Part A Medicare benefits. Most Medicare beneficiaries receive Part A benefits without payment of a premium as a result of having participated in Social Security-covered work. People age 65 and over who are not so entitled but who elect to purchase Part B coverage (or for whom Part B premiums are paid by the State Medicaid program) may also purchase Part A, but it is very expensive - $423/month for those with 29 or fewer quarters of Social Security coverage and $233/month for those with 30-39 quarters. The full payment is nearly 50% of the monthly income of one who would be eligible for the QMB program.

Typically, after the seven month period surrounding their 65th birthday, individuals are entitled to enroll in Part A or Part B only during the Medicare General Enrollment Period which runs from January 1 through March 31 of each year. Eligibility begins July 1 of the same year for those so enrolled. A financial penalty is assessed for each month that has elapsed since a beneficiary's initial enrollment opportunity.

A "conditional application" process has been created to address the dilemma of people who wish to enroll in Part A and to participate in QMB, but who cannot afford to pay the Part A premium. Under conditional enrollment, the individual is considered to be enrolled in Part A for QMB purposes, but if s/he is found not eligible as a QMB, the Part A enrollment is dropped so that s/he is not personally liable for the premium. You should call both your local Social Security office and your state Medicaid agency to learn specifics of how the process works in your state. Information is available for Social Security’s role in conditional enrollment at http://www.ssa.gov/regulations/. Click on Program Operations Manual System (POMS), then on Table of Contents, then on HI and look for HI 00801.137 and HI 00801.140.

Even if you are unable to get a clear answer, you might pursue such enrollment as follows: Secure for your client a Form 795 from the Social Security Administration (SSA) (available online at www.ssa.gov/online/ssa-795.pdf) and type into the large blank (lined) space the following: "I wish to enroll for Hospital Insurance under Medicare on a monthly premium basis, which is in addition to my current coverage for Medical Insurance (or “I also wish to apply for Medical Insurance” if the client does not have Part B.) . I understand that the State will pay my premium based on my eligibility for Medicaid (Medical Assistance) as a Qualified Medicare Beneficiary. I also understand that if I am terminated under Medicaid (Medical Assistance) as a Qualified Medicare Beneficiary, I will have to pay my premium if I want to keep my Medicare Hospital Insurance." Tell your client to give the form to SSA with her/his application for Part A, but also to make a copy for her/himself to take to the Medicaid agency to apply for QMB benefits.

States are authorized by the Social Security Act to enter into formal "buy-in" agreements with CMS to pay Medicare premiums for low-income beneficiaries. One benefit of having such an agreement is that individuals can be enrolled in Part A (and subsequently in the QMB program) at any time during the year and penalties that are otherwise assessed for late enrollment are waived. Most states have such agreements.

Individuals without Part A who are otherwise eligible for QMB benefits and reside in the states named at the beginning of this Alert are penalized by the fact that these states have no buy-in agreement. Their opportunities for program participation are more circumscribed than those of individuals in other states.

For individuals in these states, enrollment in Part A for the purpose of being eligible for QMB benefits can only be done during the General Enrollment period described above. This period will end on March 31, 2008 for 2008. Individuals who do not enroll in Part A by March 31, 2008 will have to wait until January 2009 to do so; their QMB eligibility will be postponed until July 1, 2009 at the absolute earliest.

Beneficiaries who believe they have been given erroneous information by SSA concerning Medicare Part A, such as not being told of the possibility of conditional enrollment, may be able to have their enrollment date moved up by seeking equitable relief from the agency. See HI 00830.005 of the POMS for more detail.

The stakes related to lacking Medicare Part A coverage increased in 2006 with the advent of Medicare Part D. This is because, as noted earlier, QMB status entitles the beneficiary to automatic qualification for the Medicare Part D full Low-Income Subsidy to help pay for prescription drugs. This is a significant subsidy, with minimal copayments, no premium or deductible and no coverage gap. In addition, under the Part D program, coverage is not available for drugs covered by Parts A or B, even if the particular beneficiary needing such drugs does not have Parts A or B.

The conditional enrollment process described above may apply even in states that do have a Part A buy-in agreement, but the process can be used at any time, not just during the General Enrollment period.