After paying into Medicare for 40+ years, many seniors are shocked to learn that they still have to pay for their Medicare health insurance benefits. On a fixed budget, having to pay an extra $170-$500 per month for health insurance can be too much. So you are probably wondering, what if I can’t afford my Medicare premiums?
There is no need to worry as we have good news for you. Various programs are available to assist you in paying your Medicare premiums and out-of-pocket costs.
Low-Income Subsidy (LIS) Program
LIS is available under the Medicare Part D prescription drug program and is also known as Extra Help. If you qualify, it pays all or part of your Part D drug plan premium and caps the cost of your medications. In 2022, those costs are capped at $3.95 per generic prescription or $9.85 for each brand-name prescription.
To qualify, you must be on Medicare, live within the US, and have financial resources and income below certain levels. In 2022, the income limits were $19,320 for individuals and $26,130 for married couples.
Financial resources do not include your primary residence or vehicles but include items such as bank accounts, IRAs, stocks, and other liquid assets. The value of these resources in 2022 is limited to $15,510 for individuals and $30,950 for married couples.
The LIS Program also has a Special Enrollment Period (SEP) in each of the year’s first three quarters.
Pay Medicare Premiums with Medicare Savings Programs
Federal and state governments run Medicare Savings Programs (MSPs) collaboratively. These programs can pay Medicare Part A and Part B premiums, copays, deductibles, and coinsurance for Medicare beneficiaries with limited resources (assets) and income. The income refers to the money you earn during the year, and the Assets are the money you have in the bank and the value of other investments like stocks, bonds, or real estate. The house you live in and your car cannot be considered an asset in this case.
Four types of Medicare Savings Programs have been designed to assist Medicare beneficiaries in paying Original Medicare premiums. These MSPs have various financial requirements in determining your eligibility, with the Federal Government setting income and assets limits while most states have generous guidelines. The programs include:
- Qualified Medicare Beneficiary Program (QMB). It helps pay Medicare Part A and Part B premiums and deductibles, coinsurance, and copayments. It is the best MSP with the lowest income limits for eligibility.
As of 2022, a single person could qualify with an income of up to $1,153 per month, while a couple could qualify with an income of up to $1,546 per month. The assets limits for individuals are $8,400 and $12,600 for couples.
- Specialized Low-Income Medicine Beneficiary Program (SLMB). This MSP pays for Medicare Part B premiums. As of 2022, a single person could qualify with an income of up to $1,379 per month and $1,851 per month for couples. The assets limits under this program are $8,400 for individuals and $12,600 for couples.
- Qualified Individual Program (QI). While this program helps pay premiums from Part B but does not cover a larger percentage of premiums like SLMB. In 2022, a single person could qualify for $1,549, and a couple could qualify for $2,080 per month. The assets limits for an individual and couple are $8,400 and $12,600, respectively.
- Qualified Disabled and Working Individuals Programs (QDWI). It helps pay Medicare premiums from Part A. This program is reserved for people who have a disability, are working, and have lost their social security disability and premium-free Part A since they have returned to work. The income limits for an individual are $4,615 per month and $6,189 per month for a couple. The asset limits for an individual and a couple are $4,000 and $6,000, respectively.
Qualify for QMB, SLMB, and QI. You will be eligible for Extra Help, a federal program that lowers prescription drugs and premium costs from Part D. Note that income limits to qualify for these programs are slightly different in Hawaii (Learn more here).
How Do I Apply for Medicare Savings Programs?
Since the funding for MSPs comes from the Medicaid Program, your state’s Medicaid office determines your eligibility for any of these programs. Medicaid is a joint federal and state governments programs that help with medical costs for individuals with limited income and assets. If you have been encouraged to apply or feel eligible for any MSPs, you can apply at your local social services or Medicaid office.
Medicare might advise you to apply for MSPs if there is a chance that you can qualify, even if you think that your assets and income are too high. Since states have lenient guidelines on eligibility compared to federal eligibility rules, you might qualify for an MSP.
However, before applying for an MSP, you need to call your local MSP office for details on application steps, submission (whether online, by mail, appointment, or the community health centers), and other state-specific guidelines. You can call your State Health Insurance Assistance Program (SHIP) to determine if you are eligible for MSPs. You will be sent a notice of action within 45 days of applying.
The notice serves as an update on the status of your application. In case you receive a denial, you have the right to request a fair hearing to challenge the decision. However, if you receive no notice of action within 45 days, you need to contact the Medicaid or Social Services office where you applied.
You need to reapply and re-qualify for your MSP benefits yearly. Occasionally, you will get a renewal notice from your local Medicaid office explaining everything you need to do. If you don’t receive such a notice, you need to reach out to your state Medicaid office to inquire what you should do to qualify for ongoing MSP benefits in the coming years.
Save Money With the Right Medicare Programs for You
There are several ways to reduce your Medicare premiums, but you do have to qualify based on your income and asset levels. These programs are a life saver for retirees with a low fixed income, so if you think you might qualify, you should apply.
If you don’t qualify, the best way to save money on your Medicare premiums is to make sure you aren’t overpaying for your Medicare Advantage, Medicare Supplement, or Prescription drug coverage. The difference between the right plan and the wrong plan can be thousands of dollars each year. Contact The Medicare Family to see if you qualify, and to help you apply for these programs.