Medicaid Assistance for Low-Income Medicare Beneficiaries

On this page: Medicaid

Background

Medicare beneficiaries who meet Medicaid’s income and asset rules can obtain benefits that vary according to financial eligibility. Many duals are eligible for Medicaid because they are eligible for Supplemental Security Income cash assistance; others are eligible through Medicaid “medically needy” programs because they have exhausted their financial resources paying for health care and long-term care.

People who qualify for Medicaid through either of these eligibility pathways are known as Qualified Medicare Beneficiaries (QMB), “QMB Plus,” or “full dual-eligibles”; Medicaid pays their Part B premiums and their Medicare cost-sharing.

 

Figure 7-3
Medicaid Protections for Low-Income Medicare Beneficiaries

Program

Who’s eligible

What Medicaid covers

Entitlement?

Full Medicaid dual-eligible (QMB-plus)

People who meet income-eligibility criteria for full Medicaid coverage (typically by being a person with disabilities, meeting medically-needy standards, or spending down excess income to the medically- needy standard)

Individuals must be entitled to Medicare Part A and have limited resources.

Wraparound benefits, long-term care, Medicare Part B premium, co-insurance, and Parts A and B copayments (not Part D).

Individuals are also eligible for Medicaid payment of Medicare Advantage (MA) premiums.

Yes

Qualified Medicare beneficiary (QMB-only or partial dual-eligibles)

<100% of poverty

Individuals must be entitled to Medicare Part A and have limited resources.

Eligible for Medicaid payment of Medicare Part B premiums, deductibles, co-insurance, and Parts A and B copayments

(not Part D)

Individuals are also eligible for Medicaid payment of MA premiums.

Yes

Specified low-income Medicare beneficiary

100%–120% of poverty

Individuals must be entitled to Medicare Part A and have limited resources.

Medicare Part B premium

Yes

Qualifying individuals

>120%–135% of poverty

Individual must be entitled to Medicare Part A and have limited resources.

Medicare Part B premium

No

Source: Centers for Medicare & Medicaid Services.
Prepared by AARP Public Policy Institute.

 

Individuals who receive Medicare and full Medicaid benefits are automatically enrolled in the low-income subsidy (LIS) for Medicare Part D drug coverage. The LIS covers nearly everything but nominal copayments. People enrolled in MSPs are also eligible for the LIS. States may use less restrictive income-counting rules to raise income and asset limits for their MSPs. This makes more people automatically eligible for the LIS.

Qualified Medicare Beneficiaries, crossover payments, and balance billing—the QMB Program is a Medicaid initiative intended to give certain low-income Medicare beneficiaries full access to their Medicare benefits by paying their premiums, deductibles, and copayments (Figure 7-3). State Medicaid programs have the option to pay for Medicare Part C Medicare Advantage (MA) for those Medicare beneficiaries who elect to enroll in MA plans covering Medicare Part A and B benefits and mandatory supplemental benefits. Regardless of whether the state Medicaid agency opts to pay the Part C premium, the QMB is not liable for any coinsurance or deductibles for Part C benefits.

Federal law also states that the amount of money paid by Medicare and a state (if any) is to be considered payment in full for services rendered to a QMB. This bars Medicare providers from billing QMBs for the difference between what they are paid and what they charge, a practice known as balance billing. They also cannot bill QMBs for Medicare cost-sharing, including deductibles, coinsurance, and copayments. QMBs have no legal obligation to make further payment to a provider or to a Medicare managed care plan for Part A or Part B cost-sharing.

In theory, a QMB would have full access to Medicare Parts A and B providers without any premium liability. Medicare would pay its portion and Medicaid would cover the remainder of the Medicare-approved amount that reflects the beneficiary’s cost-sharing obligation. Beneficiaries would not incur out-of-pocket charges in either the regular Medicare or MA.

In practice the QMB Program fails to fulfill its promise. That is because federal law allows states to cap their contributions to Medicare copayments at Medicaid provider-payment rates. In general, these are much lower than Medicare rates for the same service.

The prohibition on balance-billing QMBs has also led providers to complain that they are not being adequately reimbursed by Medicaid, which could compromise beneficiary access. In addition, some providers continue to balance-bill beneficiaries even though this practice is contrary to federal law. Providers who inappropriately balance-bill QMBs are subject to sanctions. They are also violating their provider agreement with CMS.

Advocates report that QMBs frequently go without needed care, as many cannot find specialists, mental health professionals, and other providers willing to serve them because of the crossover payment issue.

Payment procedures create another barrier to provider participation. Many states, despite CMS guidance to the contrary, require Medicare providers seeking copayments to go through cumbersome application procedures. States often reject reimbursement requests outright if providers are not also enrolled in Medicaid.

Beneficiaries also face challenges in accessing the protection against balance billing that is part of the QMB Program. QMBs who are able to find Medicare providers may face demands for copayments that they do not owe. Protections against balance billing are not well understood by providers. Though both state and federal authorities have enforcement remedies available, they are rarely used. The practical impact of these many deficiencies is that QMBs find that when they need to use their Medicare benefit, it is largely unavailable to them.

Individuals who are not eligible for the full Medicaid benefit package may—depending on their income and assets—be eligible to have Medicaid pay some of their Medicare cost-sharing requirements through the MSP, which has three categories:

  • QMBs (“QMB only” or “partial dual-eligibles”), who have income at or below 100 percent of the federal poverty level (FPL)—they get Medicaid help with their Medicare Part B premiums and with their Medicare Parts A and B cost-sharing;
  • Specified Low-Income Medicare Beneficiaries (SLMBs), who have income between 100 percent and 120 percent of the FPL—they get Medicaid help only with their Part B premiums; and
  • Qualifying Individuals (QIs), who have income between 120 percent and 135 percent of the FPL—like SLMBs, they get Medicaid help only with their Part B premiums. But federal financing for the QI Program is capped; therefore, when states exhaust their allotments, they are no longer required to provide this cost-sharing assistance to individuals who are otherwise qualified for the QI Program. The QI Program was permanently authorized in the Medicare Access and CHIP Reauthorization Act of 2015.

Individuals who receive Medicare and full Medicaid benefits are automatically enrolled in the low-income subsidy (LIS) for Medicare Part D drug coverage. The LIS covers nearly everything but nominal copayments. People enrolled in MSPs are also eligible for the LIS. States may use less restrictive income-counting rules to raise income and asset limits for their MSPs. This makes more people automatically eligible for the LIS.

Qualified Medicare Beneficiaries, crossover payments, and balance billing—the QMB Program is a Medicaid initiative intended to give certain low-income Medicare beneficiaries full access to their Medicare benefits by paying their premiums, deductibles, and copayments (Figure 7-3). State Medicaid programs have the option to pay for Medicare Part C Medicare Advantage (MA) for those Medicare beneficiaries who elect to enroll in MA plans covering Medicare Part A and B benefits and mandatory supplemental benefits. Regardless of whether the state Medicaid agency opts to pay the Part C premium, the QMB is not liable for any coinsurance or deductibles for Part C benefits.

Federal law also states that the amount of money paid by Medicare and a state (if any) is to be considered payment in full for services rendered to a QMB. This bars Medicare providers from billing QMBs for the difference between what they are paid and what they charge, a practice known as balance billing. They also cannot bill QMBs for Medicare cost-sharing, including deductibles, coinsurance, and copayments. QMBs have no legal obligation to make further payment to a provider or to a Medicare managed care plan for Part A or Part B cost-sharing.

In theory, a QMB would have full access to Medicare Parts A and B providers without any premium liability. Medicare would pay its portion and Medicaid would cover the remainder of the Medicare-approved amount that reflects the beneficiary’s cost-sharing obligation. Beneficiaries would not incur out-of-pocket charges in either the regular Medicare or MA.

In practice the QMB Program fails to fulfill its promise. That is because federal law allows states to cap their contributions to Medicare copayments at Medicaid provider-payment rates. In general, these are much lower than Medicare rates for the same service.

The prohibition on balance-billing QMBs has also led providers to complain that they are not being adequately reimbursed by Medicaid, which could compromise beneficiary access. In addition, some providers continue to balance-bill beneficiaries even though this practice is contrary to federal law. Providers who inappropriately balance-bill QMBs are subject to sanctions. They are also violating their provider agreement with CMS.

Advocates report that QMBs frequently go without needed care, as many cannot find specialists, mental health professionals, and other providers willing to serve them because of the crossover payment issue.

Payment procedures create another barrier to provider participation. Many states, despite CMS guidance to the contrary, require Medicare providers seeking copayments to go through cumbersome application procedures. States often reject reimbursement requests outright if providers are not also enrolled in Medicaid.

Beneficiaries also face challenges in accessing the protection against balance billing that is part of the QMB Program. QMBs who are able to find Medicare providers may face demands for copayments that they do not owe. Protections against balance billing are not well understood by providers. Though both state and federal authorities have enforcement remedies available, they are rarely used. The practical impact of these many deficiencies is that QMBs find that when they need to use their Medicare benefit, it is largely unavailable to them.

Medicaid Assistance for Low-Income Medicare Beneficiaries: Policy

Funding

In this policy: FederalState

The MSP should be fully funded to ensure that all eligible individuals have financial access to this important coverage.

Implementation

In this policy: FederalState

The federal and state governments should work together to identify strategies to maximize enrollment in the MSP.

Federal and state governments should ensure that Medicare beneficiaries and Social Services personnel are adequately informed of the program’s eligibility requirements and benefits.

Asset test

In this policy: FederalState

The asset test for MSPs should be eliminated or made less restrictive.

Alternatively states should use existing statutory flexibility to eliminate or modify the asset test. A state can introduce less restrictive resource requirements by disregarding all of an applicant’s resources or by allowing additional exclusions from countable assets

Income test

In this policy: State

Where fiscally feasible, states should take advantage of the opportunity to increase income eligibility for their MSPs.

Qualifying individuals (QI)

In this policy: Federal

The federal government should permanently extend the QI Program with sufficient funding or expand the SLMB Program to pay Medicare premiums for low-income Medicare beneficiaries who have household income between 120 percent and 135 percent of the FPL.

Enrollment

In this policy: FederalState

State governments should be required to monitor QMB, SLMB, and QI participation rates and to report enrollment rates to the federal government on an ongoing basis. States should also be required to develop and implement outreach and enrollment activities in areas with low QMB, SLMB, and QI enrollment. States should give special attention to problems of access in rural areas.

Federal and state policymakers should work together to identify viable ways to use existing data sources to identify and enroll MSP-eligible individuals.

Medicaid buy-in

In this policy: Federal

Medicaid buy-in protection for Medicare premiums, deductibles, and coinsurance should be extended to Medicare beneficiaries with incomes of up to 200 percent of the FPL.

Outreach

In this policy: Federal

CMS should fund state outreach and enrollment efforts for the MSPs.

Federal agencies with jurisdiction over programs for low-income seniors, including the Social Security Administration, should ensure that the individuals they serve are aware of Medicaid, especially its QMB, SLMB, and QI protections. These agencies should lead efforts to develop intensive outreach initiatives and simplified application processes. Outreach efforts that have shown to be more effectively or efficiently performed at the federal level should be implemented by the appropriate federal agencies and funded adequately.

States should:

  • simplify their administrative procedures so that eligible beneficiaries will be more likely to enroll in MSPs;
  • develop simplified applications and consumer-friendly application sites, institute passive renewal processes, and eliminate burdensome documentation requirements;
  • conduct innovative grassroots outreach to educate seniors about Medicaid, particularly the MSPs—innovations should include new outreach methods and sites, including by involving volunteer organizations; and
  • make use of all available data to identify and enroll people eligible for MSPs.

Payment of full cost-sharing

In this policy: FederalState

The federal and state governments should be required to examine the extent to which nonpayment of the full Medicare deductibles and copayments for QMBs threatens their access to care. If access is compromised, states should be required to pay the full cost-sharing obligation even if it exceeds the Medicaid payment rate.

Balance billing

In this policy: FederalState

The federal and state governments should develop and implement strategies to identify when QMBs are receiving bills from providers, and should educate both beneficiaries and providers about the federal prohibition on balance billing.

The federal government and states should take a more active role in enforcing the protections against the balance-billing of QMBs by providers.

Improved identification cards

In this policy: FederalState

Federal and state governments should collaborate in the development of improved identification cards for QMBs that include clear instructions for providers on rules for serving QMBs.