Most Americans reaching the age of 65 will enroll in Medicare, the federal government program which helps cover health care costs for seniors. Social Security taxes paid by you and your employers during your working career provide partial funding for Medicare. It is not a welfare program nor are benefits based on income or assets. There is still a cost for most coverage, and you can still expect to pay for deductibles, co-pays, and health care costs not covered by Medicare.
The Original Medicare program consists of Part A and B. Part A covers hospital and hospice costs and is free to most recipients who have paid into the system for at least 10 years. Persons with less than the 10-year work requirement can still obtain Part A coverage but must pay a monthly premium. Part B covers medical services such as doctor visits, lab tests, and some home health care services.
A monthly premium must be paid by all recipients of Part B coverage. For individuals with income under $84,000, the monthly premium is $135. The cost will be automatically deducted from monthly Social Security benefits. If a person is not receiving benefits, the premium must be paid directly. Medicare Part D helps cover expenses for prescription drugs. There is an additional cost for coverage which averages about $35 a month in most cases.
While Medicare premiums may be lower than purchasing an insurance policy from a private company, many low-income seniors still cannot afford the cost of premiums, let alone the added costs from co-pays and deductibles that, combined, may total $4,500 to $5,500 annually. However, low-income seniors do not need to forego adequate health care. There are a variety of federal and state programs that offer assistance to pay these expenses.
Medicaid is a federal-state program designed to provide health care for low-income individuals. Funding is provided by the Federal government, but the program is operated by each state. Except in rare circumstances when a person is receiving Social Security benefits, there is not a monthly premium charged.
Medicaid may be a person’s only source of health care coverage or an individual may receive Medicare and Medicaid benefits at the same time. For people with both, Medicaid acts as a secondary payer covering many of the costs which remain after Medicare has paid. When Medicaid is the only coverage it generally pays for 100% of care costs. Eligibility depends on income, family size, citizenship, and other factors that may differ by state, so you should contact your local Medicaid office for specific information.
Medicare Savings Programs
As with Medicaid, these four programs are operated by each state and designed to assist people with income too high to qualify for Medicaid, but who still cannot afford to pay for their health care costs. All have income and asset limits. Assets are generally limited to the value of stocks, bonds, and cash in bank accounts.
(1) The Qualified Medicare Beneficiary Program has the lowest income threshold, $1,061 monthly for an individual and provides payment assistance for Part A and B premiums, deductibles, co-pays, and co-insurance, the cost of services not covered by Medicare.
(2) The Specified Low-Income Medicare Beneficiary Program is available for persons with monthly income under $1,269 and provides assistance to pay for Part B premiums.
(3) The Qualifying Individual Program is available for persons with income up to $1,426 and only assists with payment of Part B premiums. Application for assistance from this program must be submitted annually. Funding is limited, and priority is given to those who received assistance from the program during the prior year.
(4) The Qualified Disabled and Working Individuals Program is designed for people under the age of 65 who have some disability but are employed. Monthly income must be less than $4,249. Assistance from this program is only available to cover the cost of Part A premiums.
Persons qualifying for the first three programs or Medicaid are usually also eligible for Medicare’s Extra Help program which offers payment assistance for prescription medicine. Persons with monthly income less than $1,581 and limited resources may also qualify. The program will pay for most, if not all, of a Medicare Part D premium and will reduce the cost of prescription drugs as well. The program also eliminates any surcharge imposed for late enrollment in a Part D plan.
Since all of these programs are operated at the state level, more specific qualification criteria and information should be available by contacting your local Medicaid office. These offices may also have information on additional assistance programs to help cover the cost of prescriptions and health care. Access to adequate health care is essential regardless of income, age or status. These programs work to ensure everyone can seek and receive proper care.