AARP Hearing Center
Background
Most Medicaid beneficiaries, once determined eligible, are entitled to a full package of health care services. For people who have Medicare and are also low-income, Medicaid provides help with Medicare out-of-pockets and for those with lowest income Medicaid provides coverage for services that Medicare do not cover.
Medicaid coverage of low-income Medicare beneficiaries generally falls into two groups:
- coverage of the full Medicaid benefit package plus financial assistance with Medicare out-of-pocket costs (premiums, deductibles, copays, and coinsurance) through Medicare Savings Plans (MSPs), and
- MSP-only enrollment (help with premiums, deductibles, copays and coinsurance).
Both enrollments (full Medicaid and MSPs) are administered by states. Though subject to federal minimum standards, each state handles eligibility determination and enrollment differently (see Medicaid eligibility).
Eligibility for full Medicaid benefits and Medicare financial assistance: Medicare beneficiaries may receive full Medicaid benefits in addition to Medicare benefits if they meet the state’s Medicaid eligibility criteria (see Medicaid eligibility). For these beneficiaries, Medicare is the primary payer for medical services. They also receive coverage for any additional Medicaid services not covered by Medicare, for example, long-term services and supports, and behavioral health.
If a Medicare beneficiary qualifies for full Medicaid benefits, they will also qualify for the most generous MSP. MSPs cover Medicare out-of-pocket costs (premiums, deductibles, copays, and coinsurance) for low-income Medicare beneficiaries. These individuals are often called “full-benefit duals” because they are fully eligible for Medicare and Medicaid.
Financial assistance with Medicare out-of-pocket costs (MSPs only): Some Medicare beneficiaries will not qualify for full Medicaid benefits. However, they still qualify for financial assistance with premiums, cost-sharing through an MSP, or both. This population is sometimes referred to as “partial-benefit duals” because they only have partial coverage from Medicaid- coverage of Medicare costs only.
Medicare beneficiaries may qualify for one of four MSPs. The level of assistance varies by the four categories of MSPs, each with its own income and asset requirements (Figure 7D-1).
These categories are:
- Qualified Medicare Beneficiaries (QMB),
- Specified Low-Income Medicare Beneficiary (SLMB),
- Qualifying Individual (QI), and
- Qualified Disabled and Working Individuals (QDWIs).
States may broaden eligibility for MSPs by increasing income or asset limits above the set federal minimums, or both. They can also eliminate the asset limit altogether. Although MSPs do not pay cost-sharing for Medicare Part D, people enrolled in MSPs are also eligible for the Medicare Low-Income Subsidy program, also known as Extra Help (see also Prescription Drugs in Medicare).
Figure 7D-1: Medicaid Protections for Medicare Beneficiaries with Low Incomes
| Qualified Medicare Beneficiary (QMB) |
Medicaid pays a QMB’s:
To be a QMB-Plus or QMB-Only, a beneficiary must be entitled to Medicare Part A and have an income of 100% of the federal poverty level (FPL) or less. QMB-Plus: To be a QMB-Plus, assets for 2024 must not exceed $2,000 if single or $3,000 if married. A beneficiary must also be eligible for full Medicaid benefits (through state Medicaid eligibility pathways). QMB-Only: To be a QMB-Only, assets for 2024 must not exceed $9,090 if single or $13,630 if married. A beneficiary must not be eligible for full Medicaid.
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| Specified Low-Income Medicare Beneficiary (SLMB) |
Medicaid pays an SLMB’s Medicare Part B premium only. To be an SLMB, a beneficiary must be entitled to Medicare Part A and have an income greater than 100% FPL but less than 120% FPL. SLMB-Plus: To be an SLMB-Plus, assets for 2022 must not exceed $2,000 if single or $3,000 if married if married. A beneficiary must also be eligible for full Medicaid benefits (through state Medicaid eligibility pathways). SLMB-Only: To be an SLMB-Only, assets cannot be more than $9,090 if single or $13,630 if married. A beneficiary must not be eligible for full Medicaid. |
| Qualifying Individual (QI) |
Medicaid pays the QI’s Medicare Part B premium. To be a QI, a beneficiary’s income must be between 120-135% FPL, and assets under $9,090 if single or $13,630 if married. The QI program is entirely federally funded. States may limit the number of people eligible for this program. |
| Qualified Disabled and Working Individual (QDWI) |
Medicaid pays the QDWI’s Medicare Part A premium. To be a QDWI, individuals must:
Incomes for QDWI can range up to 400% FPL due to state flexibilities in determining how their income is counted. |
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 sometimes known as balance billing or improper billing. The amount paid by Medicare and the state (if any) for health services provided to a QMB must be considered payment in full. Providers are prohibited from billing QMBs for Medicare cost-sharing, including deductibles, coinsurance, and copayments, even if the state does not cover the entire cost-sharing amount.
State “lesser of” policies: A state may choose not to pay the full Medicare cost-sharing for QMBs if doing so would cause the full provider payment (i.e., Medicare payment plus cost-share payment) to exceed what the state’s Medicaid program would pay for the same service. Suppose the Medicare rate for Medical Service A is $120 (which includes $100 paid by Medicare and a $20 patient co-pay), but the state Medicaid rate for Medicare Service A is $105., iIf the state uses the “lesser of” policy it will only reimburse the provider $5 for the QMB patient’s co-pay. The provider must accept the lower amount—$105 in this example—as payment in full for Medical Service A, even though they typically charge and receive $120 for a non-QMB Medicare patient.
The prohibition on balance billing of QMBs, combined with this state payment option, has led providers to claim that they are not adequately reimbursed by Medicaid when providing services to QMBs. Some providers continue to balance-bill beneficiaries to try to attain the full balance of the bill. This violates federal law and the provider agreement with the Centers for Medicaid & Medicare Services. Although both state and federal authorities have enforcement remedies available, they are rarely used.
Lower payments, billing difficulties, and confusion about the QMB program reimbursement may result in providers refusing to see QMB patients. Meanwhile, QMBs may avoid seeking needed care out of fear of being improperly billed.
MEDICAID ASSISTANCE FOR MEDICARE BENEFICIARIES WITH LOW INCOMES: Policy
MEDICAID ASSISTANCE FOR MEDICARE BENEFICIARIES WITH LOW INCOMES: Policy
Adequate funding of Medicare Savings Programs (MSPs)
MSPs should be fully funded to ensure all eligible individuals have financial access to benefits.
Enrollment maximization in MSPs
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.
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.
Modifying or eliminating MSP 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.
MSP income test
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.
MSP 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 also lead and collaborate in efforts to simplify the application process. This includes working across agencies and with states to align definitions, eliminate barriers to sharing data, and simplify requirements across programs.
Federal and state governments should work together to identify strategies to maximize enrollment in MSPs. This includes identifying and conducting outreach and education for potentially eligible but not enrolled individuals.
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.
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
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.
Medicaid buy-in
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.