Two types of Medicaid coverage are available for Medicare beneficiaries with low incomes:
- coverage of the full Medicaid benefit package and financial assistance with Medicare premiums and cost-share, and
- financial assistance only with Medicare premiums (in some cases) and cost-sharing.
Eligibility for full Medicaid benefits and cost-sharing assistance: There are two eligibility pathways for Medicare beneficiaries with low incomes to receive the full Medicaid benefit package plus cost-sharing assistance. First, federal law generally requires states to cover older adults with low incomes who receive cash assistance through Supplemental Security Income, commonly referred to as SSI. An exception to this general rule gives states the option—called the Section 209b option—to use their state general assistance criteria, in place since 1972, instead of federal SSI rules to determine eligibility under this pathway.
The second eligibility pathway is the optional Medicaid medically needy programs. This is for individuals who have exhausted their financial resources on their health and long-term services and supports needs. States that use the Section 209b options are required to allow people to “spend down” to medically needy income and asset levels.
Other eligibility for full Medicaid benefits for older adults: Federal law allows states to provide state-funded cash supplemental payments (SSP) to individuals to supplement their SSI income. These payments can be made to all individuals receiving SSI, or they may be targeted to certain groups, like those receiving care in group homes or assisted living facilities. States may also make SSPs available to individuals whose income exceeds SSI standards. States are allowed to extend full Medicaid coverage to individuals who receive SSPs. In cases where a person receives SSI and SSP, if a cost-of-living increase in their SSI payment causes them to be over income for receipt of SSP, they remain eligible for Medicaid under the Pickle Amendment. That amendment requires these states (e.g., those that extend Medicaid eligibility to people on SSI, people receiving SSP, or both) to disregard cost-of-living increases to SSI payments.
Older adults may also qualify for Medicaid under the nursing facility or special income rule pathways. (see also Financial Protections and Choice for Medicaid Participants and Their Families for an explanation of these pathways).
Medicare Savings Programs: Medicare beneficiaries who are not eligible for full Medicaid benefits may qualify for one of three Medicare Savings Programs (MSPs). Under the MSPs, Medicaid pays some or all of the individual’s Medicare cost-sharing. The MSPs have three categories, each with its own income, asset, and coverage rules (Figure 7-2).
The Qualified Medicare Beneficiaries (QMB) Program is a Medicaid initiative intended to give certain Medicare beneficiaries with low incomes full access to their Medicare benefits by paying their premiums, deductibles, and copayments (Figure 7-2). 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.
States may use less restrictive income-counting rules to raise income and asset limits for their MSPs. This makes more people eligible for both MSPs and the Medicare Part D Low-Income Subsidy program. Although MSPs do not pay cost-sharing for Medicare Part D, people enrolled in MSPs are also eligible for the Low-Income Subsidy program.
Figure 7-2: Medicaid Protections for Medicare Beneficiaries with Low Incomes
Payment issues for Qualified Medicare Beneficiaries (QMBs): Federal law bars Medicare providers from billing QMBs for the difference between what they are paid and what they charge/ This is a practice known as balance billing. The law states that the amount of money paid by Medicare and a state (if any) for health services provided to a QMB must be considered payment in full. Providers are also prohibited from billing QMBs for Medicare cost-sharing, including deductibles, coinsurance, and copayments. QMBs have no legal obligation to make further payment to a provider (including managed care organizations) for Part A or Part B cost-sharing.
In theory, QMBs should have full access to Medicare Parts A and B providers without any cost-sharing 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. However, in practice, the QMB Program fails to fulfill its promise because federal law allows states to cap their contributions to Medicare cost-sharing at the much lower Medicaid provider-payment rates.
The prohibition on balance billing of QMBs has led providers to complain that they are not adequately reimbursed by Medicaid. This 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 the Centers for Medicare & Medicaid Services.
Advocates report that QMBs frequently go without needed care because they 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 because many states, despite the Centers for Medicare & Medicaid Services guidance to the contrary, require Medicare providers seeking copayments to go through cumbersome application procedures to receive them. States often reject reimbursement requests outright if providers are not also enrolled in Medicaid.
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 benefit, it is largely unavailable to them.
MEDICAID ASSISTANCE FOR MEDICARE BENEFICIARIES WITH LOW INCOMES: Policy
MEDICAID ASSISTANCE FOR MEDICARE BENEFICIARIES WITH LOW INCOMES: Policy
Medicare Savings Programs (MSPs) should be fully funded to ensure that all eligible individuals have financial access to benefits.
Federal and state governments should work together to identify strategies to maximize enrollment in MSPs.
Federal and state governments should ensure that Medicare beneficiaries and social services personnel are adequately informed of the program’s eligibility requirements and benefits.
Modifying or eliminating the asset limits
Congress should eliminate the asset test for MSPs or make it less restrictive.
Alternatively, states should use existing statutory flexibility to eliminate or modify asset tests. A state can use less restrictive resource requirements by disregarding all resources or increasing what can be excluded from countable assets.
Where fiscally feasible, states should take advantage of the opportunity to increase income eligibility for their MSPs. A state can use less restrictive requirements by increasing what can be excluded from countable income.
State governments should be required to monitor Qualified Medicare Beneficiaries (QMB), Specific Low-Income Medicare Beneficiary (SLMB), and Qualifying Individuals (QI) participation rates and 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 access problems in rural areas. Federal and state policymakers should work together to identify ways to use existing data sources to identify and enroll MSP-eligible individuals.
Medicaid buy-in protections for Medicare premiums, deductibles, and coinsurance should be extended to Medicare beneficiaries with income up to 200 percent of the federal poverty level.
Increase Outreach and Education
The Centers for Medicare & Medicaid Services, the Social Security Administration, and other federal agencies with jurisdiction over programs for older adults with low incomes should fund state outreach, education, and enrollment efforts for the MSPs. They should lead efforts to simplify the application process.
Federal agencies with jurisdiction over programs for older adults with low incomes, 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.
- 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
Federal and state governments should examine the extent to which Medicaid’s failure to pay the full Medicare deductibles and copayments for QMBs threatens 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.
Enforcement of the prohibition on balance billing
Federal and state governments should actively enforce the protections against the balance billing of Qualified Medicare Beneficiaries by providers.
Federal and state governments should develop and implement strategies to identify QMBs who receive bills from providers. They should educate both beneficiaries and providers about the federal prohibition on balance billing.
Improved identification cards
Federal and state governments should collaborate to improve identification cards for QMBs that include clear instructions for providers on rules for serving QMBs.