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What You Need to Know About Medicare Savings Programs

What You Need to Know About Medicare Savings Programs

What Are Medicare Savings Programs?

If your family's income and resources fall below certain levels, you may be eligible for one of five federally funded programs to help pay for Medicare costs.

These health programs were created because not everyone reaches retirement age with the same ability to manage expenses such as health insurance premiums, coinsurance, copays, deductibles, and the cost of prescription drugs.

In 2018, the US Census Bureau predicted that by 2034, 77 million Americans would be 65 or older. However, in the United States, there are large differences in retirement income between racial and ethnic groups.

According to 2016 data analyzed by Federal Reserve researchers, only 34% of black households and 30% of Hispanic/Latino households have retirement accounts to help pay for living expenses, compared to 60% of white households.

The difference in average net worth at retirement age is even larger: $933,000 for white families, compared to $138,000 for black families and $191,000 for Hispanic or Latino families.

Medicare offers more savings programs for people with lower retirement incomes. These programs can make it very easy for you to get good health care as you get older. Medicaid administers them in the state where you live.


How do I know if I am eligible for Medicare savings programs?

These 4 Medicare savings programs are funded by the federal government but administered by Medicaid in each state:

  • Qualified Disabled and Working Individuals (QDWI)

  • Qualified Medicare Beneficiary Program (QMB)

  • Qualifying Individual Program (QI)

  • Specific low-income Medicare Beneficiary (SLMB)


Other facts you should know about the Medicare savings programs

  • Health care providers cannot charge you for anything: If you are part of the QMB program, your health care providers cannot bill you for the care you receive; Medicaid will pay them directly. If you are wrongly billed for a health care service, make sure your doctor knows you are part of the QMB program. Then contact Medicare to let them know that your service will be billed.

  • Before benefits begin, there may be a delay: After acceptance, Medicaid may take several months to start paying premiums. Medicaid will refund you for any premium payments you made while owed on Medicaid.

  • You must enroll each year: If you are enrolled in Medicaid, you will not be able to enjoy the benefits of QI. If you apply to the QI program and are accepted, you will need to reapply every year.

  • You must qualify: To be eligible for the QDWI program, you must be disabled, working, and under the age of 65. If you've returned to work and lost your free-premium Medicare Part A coverage and are not currently receiving health care from your state, you may be eligible for the QDWI program.


How to Apply for Medicare Savings Programs

If you qualify for Medicare and your income and resources are equal to or less than a Medicare savings program, you can apply by contacting your state's Medicaid office.

You should get an update on the status of your request within 45 days. If Medicaid denies your request, you can appeal.


Here are some steps to take to join a Medicare savings program:

  • Familiarize yourself with the types of questions that can be asked during registration. The form is available in several languages.

  • Before you start applying, gather supporting documents such as social security and health insurance cards, proof of address and citizenship, bank statements, IRA or 401k statements, declarations of income, bank statements, social security premiums, and tax notices.

  • To apply for this program, you will need to contact your state's Medicaid office. You can search online to find offices in your state, or you can call Medicare at 800-MEDICARE.

  • After submitting your request, you should receive a confirmation or rejection within approximately 45 days. In the event of refusal, an appeal can be made. Enrollment in one of these programs must be renewed annually.

  • If you have questions or need additional help, contact the State Health Care Program.


Prescription drugs extra help

You will be enrolled automatically in the Extra Help Program if you are eligible for the QMB, SLMB, or QI programs. This program will help you pay all premiums, deductibles, and coinsurance for a Medicare Part D prescription plan.

If you have Extra Help, you will pay either the extra help copay or the Part D cost for prescriptions, whichever is lower.

You can get partial assistance from extra help. People with partial extra help pay premiums, deductibles, and copays. In addition, they pay only 15% of the cost of prescription drugs up to the annual out-of-pocket limit.

Private insurers offer Medicare Part D plans. Each insurer will have different requirements for the documents that you must provide to prove your eligibility.

Here are some of the types of documents that may be required:

  • Automatic Medicare enrollment notice (green/yellow)

  • Medicare notice indicating that you are eligible (purple)

  • Medicare notice of a change in your copay (orange)

  • Notice of extra help for the first social insurance

  • Proof that you have Medicaid

Alternative Ways to Lower Medicare Costs

  • Medicaid: This is a health safety net administered jointly by state and federal agencies. It provides the same services as Medicare, plus a few additional benefits, such as home care and personal assistance.

  • Medigap (Medicare supplement): Medigap plans are private insurance policies that help pay Medicare costs, including copay, coinsurance, and deductibles. You can choose from 10 plans, and each plan offers the same coverage across the country. However, from 2020, you won't be able to sign up for a Medigap plan that pays out Part B rewards as a new member.

  • Program for All-Inclusive Care for the Elderly (PACE) can give you the care you need at a PACE center in your area, home, or community, so you don't have to go to a nursing home Medical care.


Summary

  • Although the federal government funds these programs, they are administered by state Medicaid programs. To apply, you can contact your state's Medicaid office or complete an online application.

  • If you qualify for one or more of these programs, you may also be eligible for extra help. This program helps you to reduce the cost of prescription drugs.

  • It may take some time to gather the necessary documents and fill out the appropriate forms, but these savings programs can help you get the care you need at an affordable cost.

  • Medicare savings programs enable low-income people to pay for Medicare Part A and Part B deductibles, copays, and coinsurance premiums.

  • To qualify, your monthly income must be equal to or less than a certain threshold for each program, and your family's resources cannot exceed certain thresholds.

  • You can also reduce Medicare costs by applying for Medicaid, joining PACE, or purchasing a Medigap policy.


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