Medicaid and Low Income Subsidies
Most people are thrilled to be on Medicare because Medicare is a bargain. And, we all love bargains! Paying only $148.50 for Part B is the ultimate, “What a deal!”
Not all people though are “most people.” Paying out $148.50 each month for Part B can be a fortune for some. Healthcare is obviously a necessity but it’s not the only necessity. There is food, a place to live, and transportation, to name a few other necessities.
And medical costs don’t end with a Part B payment. For some people, with more serious medical needs, medical copays and prescription out-of-pockets could be in the thousands.
What seems like a bargain to most of us can be a huge part of the budget, and even completely out of reach, to others. This is where help from both the federal and state government comes in.
What Is A Dual Special Needs Plan (DSNP)?
Think of those TV commercials where peanut butter and chocolate combine to make something more special than either one is on its own: Peanut Butter cups! And don’t we all love those? A Dual Special Needs Plan (DSNP) comes together in much the same way. Only the peanut butter is Medicare through the USA government and the chocolate is Medicaid through the state.
DSNPs are Medicare Advantage plans where Medicare coordinates benefits with the state Medicaid program to offer plans that give added benefits for those who need them because of their financial circumstances. Some of the added benefits include additional money for dental, vision and hearing, added money for over-the-counter products and with some plans there could even be vouchers to purchase nutritious foods.
With qualifying for a DSNP, Part B premiums (which DSNP eligible people often can’t afford) are often fully covered by Medicaid. Copayments for medical services and prescriptions are either substantially reduced or completely eliminated. The idea being that those who can’t afford out of pocket expenses could end up with little or no copays to pay.
Who Qualifies for a DNSP?
Many people are on Medicaid programs through the state. If this is your situation then when you turn 65 you will automatically qualify to join a DNSP as a substitute for your Medicaid plan. In order to enroll in a DNSP you must have both Medicare Part A and B and a valid Medicaid number from the State. Your Medicaid number will carryover from your current Medicaid enrollment prior to Medicare.
Or, if you do not currently have Medicaid but believe you are eligible based on your income level, you can apply through the state Medicaid office at any time.
If you are already on a Medicare Advantage plan that is not a DSNP and you then qualify for Medicaid later on, you’ll be accommodated. As soon as you have your Medicaid number you will be given a Special enrollment Period (SEP) to join a DNSP Medicare Advantage plan that will take the place of your prior Medicare plan.
You Need to Have Medicare Part A and B
Chocolate (Medicaid) without the peanut butter (Medicare) is not a peanut butter cup. To enroll in a DSNP Medicare Advantage plan you have to have both Medicare and Medicaid. Many DSNP eligible people automatically receive their Medicare card because they’re on Social Security. If this is you and you have your Medicare number then combined with your Medicaid number you have your peanut butter cup you’re good to go onto a DSNP. If not, you will have to apply for Medicare Part B which gives you Part A automatically. See how to apply in the section on Signing Up for Medicare.
The good news is that, depending on your level of Medicaid eligibility, most people who are dual-eligible do not have to pay for their Part B premiums as this cost is usually picked up by Medicaid.
What is the Income Qualification for a DSNP?
DSNPs have different levels of benefits based on your income, with the majority of people receiving Full Benefits. Some people, though, have a little more income and thus only receive partial benefits. Your income level must be below your state’s Medicaid income threshold. This amount for an individual will generally be in the $1,000 to $1,500 range with the lower figure getting you Full Benefits. Combined income for a couple living together falls in the $1,500 to $2,000 range. You also must have minimal assets, typically with your assets valued under $12,000.
If you think you might qualify for Medicaid but need assistance to determine if you do, the best first step is to contact your local state Medicaid office for an appointment with a Medicaid intake agent. The Medicaid program is called by different names in different states, such as Access in several states. Your state Medicaid office will be able to provide you with more information, help you figure out if you’re qualified, and take your application.
If you are approved or have your eligibility now, we would be pleased to help you with the next step, researching and enroll in a DSNP plan.
If You Lose Your DSNP Status
The state Medicaid program will regularly monitor that you still qualify for Medicaid based upon whether your current level of income and assets meet the requirements. If Medicaid decides you no longer qualify for their assistance, don’t worry, you’ll get a warning as to a future date that your Medicaid benefits will end. This gives you time to go onto a regular Medicare plan. Nobody will say to you, “As of 20 minutes from now you’re no longer with us.”
If you lose Medicaid you will get a Special Enrollment Period (SEP) to sign up for a regular Medicare plan. we can help you with this enrollment into a new Medicare Advantage plan. Your transfer will be seamless so you will never find yourself without coverage.
Low-Income Subsidies (LIS)
When everyone receives their Medicare card, in the packet is a letter that, quite frankly, baffles many of my clients. I get a lot of calls asking me about the letter which seemingly invites them to join a program for Low-Income Subsidies.
I tell my clients they got the letter because “they’re inviting everyone to join the LIS program.” Let’s say you happen to own half the stock in Amazon, and lucky you, you’re still going to get the low-income subsidy invite in the packet with your new Medicare card.
This does not mean you will actually get an LIS subsidy. This is where the letter can be a bit confusing. Medicare sends the letter to everyone to let them know that Medicare offers a subsidy program for prescription drugs but, and here is “the but,” YOU HAVE TO BE QUALIFIED.
LIS is a federal government program administered by Medicare to help those who meet the income qualifications with their prescription drug costs. Many prescription drugs are expensive and many people struggle with large copays. An LIS subsidy could eliminate up to 100% of a qualified person’s prescription drug deductible and copays.
Now that we have established that the owner of half of Amazon’s shares does not qualify for prescription payment help the question becomes who does? In 2021 your income must be below $19,320 as an individual, in most states. Or, $26,130 for a married couple living together.
For those who do not qualify for LIS but still could use some help with the high costs of name-brand prescription drugs, drug manufactures often offer subsidies or coupons directly. It’s well worth checking out.