Medicare Out-of-Pocket Costs
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.
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 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, including costs associated with the Medicare drug programs.
Jim: Are these programs the same as Medicaid.
Howard: Yes and No. It can get a bit confusing because you do need to apply for these programs through the state Medicaid program but must also have Medicare. 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. In Virginia, you cannot have more than 80% of the federal poverty limits. These amounts change each year so folks will need to check online for the current federal poverty limits (FPL). 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 being 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: To be eligible for QMB a person must make no more than 100% of the federal poverty limits. 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 less than 120% of the federal poverty limits are eligible. If eligible, it covers the Part B premiums only.
The QI-1 program has essentially the same benefits as SLMB. The difference is that you can have a bit more money each month, up to 135% of the federal poverty guidelines. The main difference between SLMB and QI-1 is that once the funding for QI-1 is exhausted, no more applications are taken that year. 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 $7,080 for a single person and $10,620 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 so persons need to check the annual federal poverty income/asset guidelines to be certain about potential eligibility.
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: 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. If a person is eligible for any of these programs they will automatically receive some help towards paying their Medicare drug plans costs too. 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.