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Open enrollment: My income is really low. Can I get help paying for health care?

Consumer Reports News: November 12, 2012 02:08 PM

Q. I am 68 and have only Medicare Part A. My sole source of income is $1,062 a month from Social Security. I'm in good health but concerned about future medical needs. Are there any plans for lower-income people?

A.Yes, and it's a shame more Medicare beneficiaries don't know about them. It's understandable why they don't, as these programs are complex, vary from state to state, and seem to have been designed so everything about them is as baffling as possible.

But let's give it a shot anyway.

We'll start with a program that helps lower-income Medicare beneficiaries pay premiums and out-of-pocket costs for Medicare Parts A and B. Its overall name is the Medicare Savings Program (MSP), and it has several different benefit levels for people with different financial resources. At its most generous the program will pay your Part B premium and pretty much all your Medicare deductibles and coinsurance. At its least generous the program will pay just your Part B premium. (In situations like yours, where you didn't sign up for Part B when first eligible, the program will also pay the 10 percent premium penalty you'll be assessed for every year you could have enrolled, but did not.)

How poor, exactly, do you have to be to qualify for a MSP? The minimum standard, set by Medicare, is an income under 135 percent of the federal poverty level, which at the moment works out to $1,277 a month for individuals. "Everything counts towards income, including payouts from 401(k) plans, pensions, Social Security, and help from family members," says Brandy Bauer, communications manager at the National Council on Aging. Medicare also allows states to impose an asset test, which can be as little as $6,940 per individual (not counting your house or car but counting retirement savings and bank accounts).

But some states have made their MSP programs a lot more generous, with much higher income limits and in some cases no asset tests at all. And the program may be called something else in your state.

"In most states, nobody will automatically let you know you qualify," says Mitchell Clark, a media spokesperson for the Medicare Rights Center. "You have to actively apply." The place to apply is your state's Medicaid office, which you can find a link to at Medicaid.gov.

There is another completely separate program that helps with prescription drugs. Continuing with the theme of maximum confusingness, it has two names, Low-Income Subsidy and Extra Help, for no apparent reason. And to get it, you apply through your local Social Security office, not your Medicaid office.

Depending on exactly how low your income is, the program will pay all or part of your Part D prescription drug plan premium and deductible, a hefty chunk of your copay, and totally eliminate the infamous doughnut hole. In 2013, individuals with an income of up to $1,398 a month can qualify for Extra Help. There are also asset limitations.

If you manage to get yourself into a Medicare Savings Program, you will automatically qualify for Extra Help. But because the requirements are slightly different, even if you don't qualify for a Medicare Savings Program for Part B you might be able to get Extra Help for Part D.

Right now you're probably about to give up because you have no idea whether you might qualify for any of this. Happily, the National Council on Aging has created an invaluable online interactive tool, BenefitsCheckUp, to do the work for you. If you answer all the questions, it will in the end not only tell you which programs you may qualify for, but provide downloadable application forms and, in the case of Extra Help, allow you to complete your entire application online. The program even knows the specific MSP eligibility rules in your state.

Or, if you'd prefer interacting with an actual human being, you can start by contacting your State Health Insurance Assistance Program, a free personal counseling service for Medicare beneficiaries. Here's a list of programs by state.

For more information, see our Health Insurance Buying Guide as well as rankings of health insurance plans.
Got a question for me? Ask it here.

Nancy Metcalf

   

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