As individuals retire or age into Medicare, their insurance situation can change dramatically. There are a multitude of options open to those with Medicare. The terms are different, the prices are different, the products offered are dramatically different each year.
The purpose of this column is to give those who are eligible for Medicare, or soon to be eligible for Medicare, some understanding of their insurance options and how it could impact their health and finances.
These questions and answers are meant as a guide to help you understand the complex questions you are now thinking about. Each individual's specific situation may create a different solution. You shouldn't necessarily do what your friends, family and neighbors do.
Q: I am having a hard time paying my monthly bills. I know that there may be benefits out there that would help. What is highest amount I can make in monthly income and still get some benefits?
A: There are a number of entitlements out there, like SNAP (formerly known as food stamps), Medicaid and HEAP (Home Energy Assistance Program). Today I am going to focus on Medicaid.
Medicaid is handled by Department of Social Services (DSS). Medicaid is a category of benefits that is very large. There are also different levels of Medicaid benefits and therefore eligibility. I will start out with the highest monthly income benefits and work my way down with regard to income.
Often our gross income is different than our net income. (I remember the difference with a rhyme, "Net is what you get".) With regards to Social Security, most Americans have their Medicare Part B premium taken out before they receive their benefit. If someone's Social Security benefit amount is $1,700 per month, their net income is probably $1,595. (The amount deposited in their account.) This is true for pensions as well. Some individuals have taxes taken our of their pension. So your net pension is less than your gross pension. This can sometimes lead to confusion when people are trying to determine their eligibility for benefits. For most entitlement/benefits you apply for, you must count your gross income.
The Slimb/QI-1 benefit (entitlement) is part of the Medicare Saving Programs (MSPs). These programs are designed to help individuals and couples with lower incomes meet their medical insurance expenses. The Slimb/QI-1 benefit has an income cap (maximum) per household. The income cap for those over age 65 is $1,313 for a one-person household and $1,765 for a couple. This income includes all retiree income: Social Security, IRAs, pensions, retirement annuities, VA pension, etc.) 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.
This entitlement does allow for some of your expenses to be deducted from your gross income. Those expenses include your health insurance premiums, dental insurance premiums and long-term care insurance premiums.
This reduction in your gross income could make a significant difference for some people. Some of these premiums could be significant. Long Term Care Insurance (LTCI) premiums are probably the highest of these premiums. If you pay $3,000 annually for this insurance premium, that works out to be $250 monthly. This means that an individual with LTCI could make that much more in monthly income and still be eligible for the benefit ($1,313 + $250 = $1,563)
Obviously this is just one of the deductions you can use as mentioned above. You can take that maximum income and review your own insurance premiums and determine if you are close to eligibility. Also remember this benefit does not count your assets (money you already have).
The next level of benefit is Qualified Medicare Beneficiary (QMB) Medicaid Benefit. This benefit also requires an application be completed and filed with Department of Social Services (DSS). The income cap or highest amount an individual can make for this benefit is $978 per month and for a couple $1,313 per month. This is another benefit that does not have a resource test. This means you do not have to disclose your assets (money/property you already have).
The QMB benefit pays your Medicare Part B premium ($104.90) each month. This also can help pay for or pay in full your health insurance premiums. These premiums could be for a Medicare Advantage Plan or a Medicare Supplement Plan. If either of their insurance products require you to pay copays for your healthcare, this QMB benefit will pay those co-pays as well.
Both of these benefits Slimb/QI-1 and QMB benefit are what I call a 'gateway' benefit. Once you apply and are approved for this benefit, you can get many other benefits, and they usually happen automatically. If eligible for Slimb/QI-1 or QMB, you also get the Low Income Subsidy (LIS) for your Part D plan, which pays the premium for your Part D coverage (up to $43.22) and reduces your co-pays at the pharmacy down to $2.65 for generics and $6.60 for brand-name medications covered by your plan. If eligible for Slimb/QI-1 or QMB, you can also get the "Life-line" benefit, which is a $10.25 monthly credit on your Windstream phone bill. So you can see why I so strongly encourage those with Medicare to think about their eligibility for this benefit.
To apply for the Slimb/QI-1, QMB or Medicare Saving Program benefits, you must fill out an application for DSS. 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 does not require a face-to-face interview. 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 this benefit anytime during the year. You can also reapply for this benefit if you have been denied in the past, using these expenses listed above. You may then be eligible for this useful and extremely helpful benefit. I have seen this benefit make a significant difference in the households of many seniors.
Good luck and call with questions. Next week I will cover additional programs offered by Medicaid.
Janell Sluga is a geriatric care manager certified and works for Senior Life Matters, a program of Lutheran Senior Housing, and has worked in Chautauqua County with seniors for more than 18 years. She is HIICAP (Health Insurance Information, Counseling & Assistance Program) counselor-trained by Office for the Aging. She does not sell insurance or represent any insurance company. She is an unbiased source of insurance and education to help seniors choose the best option for them.