Medicare General Enrollment Period Runs January through March 31; Offers Opportunities for Help Paying Medicare Cost-Sharing

The 2016 Medicare Part A and B General Enrollment Period runs from January 1 through March 31, 2016. As detailed below, this enrollment period is especially important for many individuals who are not eligible for premium-free Medicare Part A. Most people do not pay a premium for Medicare Part A because they have sufficient work history. However, for people who do not have this work history, the Part A premium can cost several hundred dollars per month.

In addition to the important benefits covered under this component of Medicare (primarily hospital, skilled nursing facility and some home health and hospice coverage), Part A entitlement triggers eligibility for the Qualified Medicare Beneficiary (QMB) program. QMB helps certain low-income people with health care costs associated with Medicare, including all of Medicare Part A and Part B premiums and cost-sharing and nearly all of Part D premiums and cost-sharing.[1]  Without being enrolled in Part A first, however, beneficiaries cannot enroll in QMB.

What is QMB?

Eligibility

Under the QMB program[2], state Medicaid programs pay all Medicare premiums, deductibles and co-insurance for beneficiaries with:

• Countable incomes below 100% of Federal Poverty Levels (FPL);
• Countable resources below $7,280 for an individual and $10,930 for a couple.

These resource amounts are new for 2016.[3]  The current income eligibility limits for QMB in the 48 contiguous states and the District of Columbia is $1,010 per month for an individual and $1,355 per month for a couple.[4] This amount includes a universal $20 income disregard.[5]

Benefits

QMB benefits for 2016 include payment of:

• The individuals' Part B premiums, which range between $104.90 and $121.80 per month[6]  (depending primarily on when the individuals became eligible for Medicare and for QMB); [7]
• The hospital deductible of  $1,288.00 per spell of illness (note some beneficiaries may incur more than one Part A hospital deductible in a year, depending on whether subsequent hospital admissions during the year constitute a new spell of illness);
• The $322 or  $644 per day co-payment for inpatient hospital service (depending on the number of days in the hospital, after the 60th day);
• The $161.00 per day co-payment for skilled nursing facility services for days 21-100;
• The Part B annual deductible of $166;
• The 20% co-insurance on most Part B services;
• For those without premium-free Part A, payment of between $2,712 and $4,932 per year in Part A premiums (depending on the individual's earnings record in the Social Security system);[8]
• The full Medicare Part D Low-Income Subsidy is also available through QMB; it is estimated by the Social Security Administration (SSA) to have an average value of about $4,000.[9]

Connection to Medicare Part A

Eligibility for the QMB program is dependent upon an individual's enrollment in Medicare Part A.  Most Medicare beneficiaries receive Part A benefits without payment of a premium because of their employment history.  People age 65 and over who are not entitled to premium-free Part A 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 – $411/month for those with 29 or fewer quarters of Social Security coverage and $226/month for those with 30-39 quarters. The full payment is nearly 50% of the monthly income of someone who is financially eligible for the QMB program.

Part A Buy-In States vs. Group Payer States

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; they are called Part A Buy-In States.

Attention advocates for residents of the following states: Alabama, Arizona, California, Colorado, Illinois, Kansas, Kentucky, Missouri, Nebraska, New Jersey, New Mexico, South Carolina, Utah and Virginia. According to the Centers for Medicare & Medicaid Services (CMS), your state only allows enrollment in Medicare Part A during the General Enrollment Period to become eligible for help with Medicare cost-sharing under the Qualified Medicare Beneficiary (QMB) program.

Therefore, if potentially QMB-eligible beneficiaries living in these states do not currently have Medicare Part A, they must enroll in Part A (and in Part B, if they do not already have Part B) before March 31, 2016 to be entitled to QMB benefits in 2016.  For those who cannot afford the Part A premium, a conditional application process, described below, is available to protect them from financial liability.

Individuals without Part A who are otherwise eligible for QMB benefits and reside in these states are, unfortunately, penalized by the fact that these states have no Buy-In agreement with CMS. These states are called Group Payer States.  Individuals in group payer state face greater barriers to participation in the QMB program than individuals in Part A Buy-In States.

Again, individuals in Group Payer States who did not enroll in Part A when they were first eligible to do so can only enroll in Part A during the General Enrollment period described above.  This period will end on March 31st for 2016.  Individuals who do not enroll in Part A by March 31, 2016 will have to wait until January 2017 to do so; their QMB eligibility will be postponed until July 1, 2017 at the absolute earliest. 

Procedure for Purchasing Part A

Typically, after their Initial Enrollment Period, individuals are entitled to enroll in Part A or Part B only during the Medicare General Enrollment Period that runs from January 1 through March 31 of each year.  Eligibility for Part A and B coverage begins July 1 of the same year for those enrolling during the General Enrollment Period.  Except in special circumstances, Medicare assesses a 10% penalty on the monthly premium for enrollment after the Initial Enrollment Period.  The Part A enrollment penalty does not last indefinitely. For people enrolled in QMB, the state pays the penalty for late enrollment.

Conditional Part A Application Process for Potential QMB Participants

Usually, enrollment in QMB happens after a beneficiary already has Part A and B. 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 while waiting for QMB to start to pay the Part A premium.  Under conditional enrollment, the individual is considered to be enrolled in Part A for QMB purposes but if the state later finds s/he is not eligible for QMB, the Part A enrollment is dropped so that s/he is not personally liable for the premium.  Those in this situation should call both their local Social Security office and state Medicaid agency to learn specifics of how the process works in a given state.  Information on Social Security's role in conditional enrollment is available through the SSA Program Operations Manual System (POMS) at https://secure.ssa.gov/apps10/poms.nsf/partlist!OpenView.  Click on HI and look for HI 00801.137 and HI 00801.140.

If unable to get a clear answer from Social Security, one might pursue conditional enrollment as follows:

1. Secure a Form 795 from the Social Security Administration (SSA) (available online at www.ssa.gov/online/ssa-795.pdf)  
2. Type or write  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 Part A Insurance." 
3. Submit the form to SSA with a completed application for Part A
4. Go to the Medicaid office to apply for QMB with a copy of the Part A application and SSA Form 795

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 back by seeking equitable relief from the agency.  See section HI 00830.005 of the SSA Program Operations Manual System (POMS) for more detail.

The conditional enrollment process described above may also apply in Part A Buy-In States, but the process can be used at any time, not just during the General Enrollment period.  It is only applicable if the individual must also enroll in Part B. See SSA Program Operations Manual System HI 00801.140; https://secure.ssa.gov/apps10/poms.nsf/lnx/0600801140. See also EM 08071 (https://secure.ssa.gov/apps10/reference.nsf/links/08112008035226PM), which instructs District Offices how to process an enrollment outside the General Enrollment Period. 

Consequences of Failure to Enroll in Part A: Help with Part D

The possible consequences of not obtaining Medicare Part A coverage increased in 2006 with the advent of Medicare Part D.  As noted earlier, QMB status entitles the beneficiary to automatic qualification for the Medicare Part D full Low-Income Subsidy (LIS, also known as “Extra Help”) to help pay for prescription drugs.  This significant subsidy entitles the beneficiary to minimal co-payments, 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. (Note that QMB is not the only path to the Part D Low-Income Subsidy[10]; anyone can apply directly to the Social Security Administration for that assistance.)

Conclusion

The processes described in this Alert are not necessarily easy to use.  Advocates from both Group Payer States and Part A Buy-In States report difficulties in finding state and SSA personnel who are familiar with conditional enrollment.  Clients, too, may be skeptical of taking this action, especially if agency personnel cannot reassure them they will not be billed for the Part A premium.  In addition, individuals without Part B must also enroll in Part B to enroll in Part A.  There is no conditional enrollment for Part B, so the individual may be concerned about having to pay Part B premiums, even though the QMB benefit will cover those once it is in place.  Regulations direct that Part B becomes effective when QMB becomes effective, so there should be no personal financial liability.

The Center for Medicare Advocacy is interested in the myriad challenges of QMB enrollment and would appreciate hearing from advocates about their experiences with SSA and their state Medicaid agencies relating to these issues.

February 17, 2016 – K. Kertesz