Medicare Out-of-Pocket Costs


Recorded: January 31, 2011

Jim: Welcome to Fairfax County’s Medicare Moments, the podcast that brings you the latest information on Medicare benefits. I‘m your host, Jim Person… Are you a Medicare beneficiary who is having trouble paying for deductibles and copayments?  Medicare pays for most of the costs of health care for older adults but there are still costs it doesn’t pick up and these costs seem to be going up every year. Joining us today to discuss this is Howard Houghton, the manager of Fairfax County’s Virginia Insurance Counseling and Assistance Program.   Welcome, Howard.

Howard: Thanks, Jim. Good to be here again.

Jim:  Howard, let’s start with an explanation of Medicare’s so called out-of-pocket costs.

Howard: Sure, Jim. Medicare has four parts: Medicare A, Medicare B, Medicare C and Medicare D.

Medicare A is for hospital insurance and other inpatient expenses, Medicare B is for doctor costs and other outpatient services, Medicare C is for Medicare Advantage programs, and Medicare D is for prescription drugs.

It is important to remember that Medicare does not pay for all costs. Out-of-pocket costs refer to deductibles and coinsurance amounts as well as the monthly premium that Medicare B beneficiaries pay.  

Jim:  OK – it’s my understanding that these out-of-pocket costs have really soared over the years and that some people are having problems paying them.

Howard:  Yes, that’s true, Jim. Economists and policy experts have pointed to the fact that increases in health care costs are outpacing increases in retirement income. This means that Medicare beneficiaries are paying more in out-of-pocket costs for the same services.

Jim:  I’m guessing people with lower income are facing the greatest difficulties.

Howard: Absolutely.

Jim:  So, what should a Medicare beneficiary who is having difficulty keeping up with out-of-pocket costs do?

Howard: What they should do is look into three programs that help pay for the out-of-pocket costs. As you can imagine, they have rather bureaucratic names:

  • the first is called the Qualified Medicare Beneficiary program or QMB;
  • the second program is called the Specified Low-Income Medicare Beneficiary or SLMB; and
  • the third is the Qualified Individual 1 program or QI-1. 

These programs are funded by the feds and the state. They all pay for Medicare out-of-pocket costs for people who are eligible.

Jim: Are these programs the same as Medicaid.

Howard:  No, they are not. It can get a bit confusing because you need to apply for these programs through the state Medicaid program. I think of them as a hybrid programs.

Medicaid is for people who have even lower incomes than those who qualify for the QMB, SLMB and QI-1 programs.

So, when looking into these programs, it is a good idea to determine whether you are eligible for Medicaid as well.

Jim: And if you qualify for Medicaid?

Howard: Then Medicaid, the health insurance for the poor, will pay for costs that Medicare does not cover.  People who have Medicare and Medicaid are called dually-eligible.

Again, QMB, SLMB and QI-1 are for people with Medicare who do not qualify for Medicaid but need help paying for Medicare out-of-pocket costs because they have a low income.  

Jim:  OK, I think I get it. So, tell me about QMB, who is eligible and what does it cover?

Howard: First, let me warn you that the income limits change each year.As we speak in early 2012, to be eligible for QMB an individual must make no more than $951 and a couple can make no more than $1,281 per month. QMB pays for Part A and B deductibles, co-insurance amounts and Part B premiums.

Jim: And SLMB, who’s eligible and what does it cover?

Howard:    People who make no more than $1,137 and couples who make no more than $1,533 are eligible. It covers Part B premiums only.

The QI-1 program has essentially the same coverage as SLMB. The difference is that you can have a bit more money each month, $1,277 for an individual and $1,723 for a couple.  The main difference between SLMB and QI-1 is that once the funding for QI-1 is exhausted, no more applications are taken. Fortunately, the program has never run out of funds…so far.

Jim: I know a lot of social programs have resource limits. Do these programs also have resource limits?

Howard: Yes they do. These programs require you have less than $6,940 for a single person and $10,410 fora married couple in liquid resources such as cash and bonds. The house you live in and a car do not count.  Again, these figures change with time.

Jim: Wow, Howard, my mind is swimming with way too many acronyms and dollar amounts. Who can our listeners call to get more information about these programs and determine whether they should apply?

Howard: Too bad Jim – I guess you won’t do well on my quiz after the program. Seriously, I can’t remember all this without a cheat sheet either.

Hopefully, listeners now have some sense of whether they may be eligible for help paying for Medicare out-of-pocket costs. To get more information about applying for QMB, SLMB, QI-1 and Medicaid, they should call the Department of Family Services at 703-324-7500.

Also, www.Medicare.gov has information about both of these programs.

 Jim: Well, there you have it. Again, for more information about the programs that help pay for Medicare’s out-of-pocket costs, call 703-324-7500, TTY 711. As always, call the Virginia Insurance Counseling and Assistance Program if you encounter a problem with Medicare or need advice choosing a plan. The number is 703-324-5851, TTY 711.

Finally, for information on services for older adults, including assistance with Medicare issues, go to www.fairfaxcounty.gov/dfs/olderadultservices.

I want to thank our guest, Howard Houghton for talking to us about the ins and outs of Medicare and I want to thank our listeners for tuning into our show today.  Until next time, this is Jim Person with Fairfax County’s Medicare Moments.

Closing Music.

 


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