There’s Aid Available to Cover Your Medicare Costs

Psst, want to hear one of the best-kept secrets of government?

There are pots of money set aside by Congress to help low-income people pay their Medicare premiums, copayments and deductibles.

These three aid programs are separate from Medi-Cal, the joint federal-state program that helps pay the health care bills for those with low incomes. The money is reserved for people with too much income to qualify for Medi-Cal, but too little to manage without help.

To qualify, you must meet both asset and income tests. An individual can have assets--such as savings accounts, stocks and bonds--of up to $4,000, and a couple can have assets of up to $6,000. (House, furniture and cars don’t count.)

The first program, created a decade ago, is called Qualified Medicare Beneficiary (or QMB, pronounced “kwim-bee”), and is available to individuals with incomes of up to $691 a month and couples with a total income of up to $925.

QMB offers free Medicare coverage. It pays the $768 deductible for the first day in the hospital, the $100 annual deductible for doctor charges, the 20% of approved physician charges normally paid by the patient, and the $45.50 a month premium for Part B coverage, which provides insurance for doctor bills. The Part B premium is deducted from Social Security benefit checks. If you qualify for QMB, the government stops deducting the money, and you get an additional $45.50 in your monthly check.

Another program, established in 1993, is Specified Low Income Medicare Beneficiary (SLMB, pronounced “slim-bee”), for individuals with incomes of up to $825 a month, and couples with $1,105 monthly. It will pay for the entire Part B premium, saving the beneficiary $45.50 a month, or $546 a year.

The newest program, created in 1997, set aside a pool of money for a new category, designated Qualifying Individuals (QI), and is open to individuals with incomes of up to $926 monthly and couples with incomes of up to $1,241. It also pays for the full Part B premium.

The three sources of money provide protection along a spectrum of income, and the dollar limits for eligibility are adjusted each year. QMB provides help to those with incomes up to the federal poverty line, SLMB goes up 20% more, and QI boosts the eligibility to an income equal to 135% of the poverty standard.

Nationwide, about 8 million people are eligible for QMB and SLMB, but fewer than half get the benefits. The estimated number of eligible people who aren’t enrolled ranges from 3.3 million to 3.9 million, according to a study by Families USA, a health advocacy group.

In 1997, Congress set aside $1.6 billion to cover five years of spending for Qualifying Individuals on a first-come, first-serve basis for an estimated 500,000 eligible people. Rather than a flood of applicants, there hasn’t even been a trickle. The program began in fall 1997, and just 16,000 people were enrolled through September 1998, the end of the fiscal year.

“This new benefit is of great importance today and will be of even greater importance in the future as Medicare premiums continue to increase,” said Ron Pollack, director of Families USA. “As a result, it is terribly disappointing that the tiniest fraction of people eligible for this important benefit are actually receiving it.”

Just 14 states have disbursed money, and California isn’t on that list. The state has been busy reprogramming its computers to avoid Y2K problems. Counties had been accepting applications, although benefits weren’t disbursed while the state readjusted its computers. Anyone eligible who has already applied will get retroactive credit for the benefits, said Stan Rosenstein, assistant deputy director for medical care services for the California Department of Health. The QI benefits will start flowing this year, both to those who already applied and to new applicants, Rosenstein said.

A single application covers all the benefits--QMB, SLMB and QI. Administration is handled through county social services departments. In Los Angeles County, call (877) 597-4777. In Orange County, call (714) 541-7700.

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Readers are asking about:

Question: My father-in-law is 75 and has Medicare A and B, but no supplemental insurance. He had a stroke two months ago and went through acute rehabilitation, and had a pacemaker put in. Is there any supplemental insurance that will accept him?

Answer: Medi-Gap, the supplemental coverage to help with Medicare bills, comes in 10 standard policies approved by the federal government. At your father-in-law’s age and with his health problems, he may have a tough time getting coverage. Check with a health insurance agent who handles a number of the companies in the Medi-Gap business. You should also consider the possibility of a health maintenance organization that enrolls Medicare beneficiaries. They offer coverage without copayments or deductibles, and many offer prescription drugs, a benefit not provided by regular Medicare. But shop carefully for the HMO. The best way to start is with your father-in-law’s doctors. Ask them which HMOs they participate in, so your father-in-law can get continuity of care. And if he is taking some costly drugs, make sure the HMO you pick has those drugs on its approved formulary of pharmaceuticals.

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Q: My wife and I are 50, in good health, and have one daughter (age 17) still living at home. We are currently covered by COBRA from my previous employer. I do not intend to return to work full time, and my wife is a preschool teacher. Health insurance is not offered by her school. Based on this, would we qualify for a Medical Savings Account? Second, does the contribution to the account have to be from wages or salary? Can it be from interest, dividends, rent, etc.? This would be a factor if my wife chose to stop teaching. Any recommendations regarding setting up an MSA and insurance companies for high-deductible health insurance?

A: The Medical Savings Account combines high-deductible health insurance with a tax-free savings program. It gives you direct control over your spending for medical care, and complete freedom to select any doctor or hospital to provide the care. The MSA is a two-step process. You buy a qualified insurance policy, which has a deductible between $1,500 and $2,250 a year for an individual, and between $3,000 and $4,500 for a family.

Then you deposit into an MSA an amount equal to part of the deductible, up to 65% for an individual and 75% for a family. This translates into MSA deposits ranging from $975 to $1,462 for an individual, or $1,950 to $2,925 for a family. The money in the MSA builds up tax-free and can be withdrawn during the year to pay for any medical costs.

If you don’t use the money by year’s end, it rolls over to the next year and keeps gathering interest. You can use any source of funds to open an account. MSAs are available to the self-employed or workers at firms with 50 or fewer employees. Check with Blue Cross or Blue Shield, the biggest marketers of health insurance to individuals in California, advises Barry J. Fisher, vice president of legislative affairs for the California Assn. of Health Underwriters.

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We welcome your suggestions, questions and tips about the fast-changing world of health care. Write to Bob Rosenblatt, Health, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053. Or e-mail to bob.rosenblatt.latimes.com.