Do programs exist that can help pay my Medicare premium or other health insurance costs?

Question:

My budget is getting very difficult to manage. Are there any programs to help pay my Medicare premium, or other health insurance costs? What might they be, and how could I get them?

Answer:

A program that I believe is very helpful for many seniors is called the Medicare Savings Program (MSP). This is a Medicaid benefit administered by the Department of Social Services (DSS) in your county. Individuals qualify for the MSP based on their income, and the thresholds change each year.

It’s important to remember the difference between Gross and Net income – I remember the difference with a rhyme, “Net is what you Get.” For example, most Americans have their $185 Medicare Part B premium taken out before they receive their Social Security Income (SSI).  If someone’s SSI amount is $2200 per month, their net income would then be $2015: the amount deposited in their account AFTER their Part B premium is deducted. So their gross $2200 SSI minus that $185 premium would get a net income of $2015. This can be confusing when you try to determine your eligibility for benefits. Remember that for most benefits, eligibility is based on your GROSS income, meaning the amount BEFORE deductions, so it usually won’t be the figure that actually makes it into your bank account.

One level of the MSP is the called the QI-1 benefit, and it pays your Medicare Part B premium completely. This will save you the $185/month cost for that premium, so if you pay it out of your SSI, then your SSI will increase by $185. It can also pay your Part D premium and reduce the cost of your prescriptions.

The QI-1 benefit has a gross income cap or maximum per household, $1,781/month for a one-person household, or $2,400/month for a couple. This income includes all retiree income, including SSI, IRA’s, pensions, retirement annuities, VA pension, and wages. There is NO resource test for this benefit. That means that the money in the bank, investments, and stocks are NOT reviewed or included in this application process.

While this calculation of eligibility is based on your gross income, the application does allow for some of your expenses to be deducted from your gross income. Those deductions include your health insurance premiums, dental insurance premiums, and long-term care insurance premiums.

This reduction in gross income could make a significant difference for some people, as they can make a difference between qualifying for MSP or not. Medicare Supplement premiums have increased over the years, so you may pay more than $300 monthly. This means that an individual with this monthly premium could make that much more in monthly gross income and still be eligible for the benefit ($2080 – $300 = $1780). I hope that shows how a higher-income individual could be eligible for the QI-1 benefit, especially since a Medicare Supplement is just one of the deductions you can use.

The next level of the MSP is the Qualified Medicare Beneficiary (QMB). This benefit also requires an application be filed with DSS. The income cap for this benefit is $1,325/month for an individual and $1,783/month for a couple. This is another benefit that does not have a resource test so again, you do not have to disclose your assets.

The QMB pays your Medicare Part B premium ($185) each month, but it can also pay some or all of your Health Insurance premiums, including premiums for a Medicare Advantage Plan or a Medicare Supplement Plan. The QMB will pay certain co-pays and deductibles as well.

Both the QI-1 and QMB benefits are what I call “gateway” benefits. Once you apply and are approved for this benefit, you also get the Low-Income Subsidy (LIS) for your Part D drug plan, which pays the premium for your Part D coverage (up to $72.34) and reduces your co-pays at the pharmacy down to $4.90 for generics and $12.15 for brand name medications covered by your plan.

To apply for any of these benefits, you must fill out an application with DSS. You can get an application for the MSP by going to the DSS office closest to you, or just the www.mybenefits.ny.gov/ website. You can also call your local DSS office and request one be mailed to you. The application is usually a simplified application consisting of one piece of paper (two sides). When reviewing the income that an individual or couple has, DSS requires proof of income. This application and the required proof of income, expenses and identification can be mailed to DSS or dropped off at DSS.

You can apply for MSP benefits any time. You can also reapply if you have been denied in the past, using these expenses listed above. I encourage you try calculating your eligibility and consider applying, as I have seen this benefit make a significant difference in the households of many seniors!