Medicare Savings Program

Similar to Extra Help, there is also the “Medicare Savings Program”. The main difference is that Extra Help is specifically for prescription drugs, while the Medicare Savings Program is to assist beneficiaries who have limited income and resources with their other Medicare costs. This program is not available in Puerto Rico and the U.S. Virgin Islands (DHHS, 2014).

There are four types of Medical Savings Programs. The Qualified Medicare Beneficiary (QMB) Program assists beneficiaries with paying for Part A and/or Part B premiums, deductibles, coinsurance and copayments (DHHS, 2014). The income limit for QMB is 100% of the Federal Poverty Level (FPL) plus $20, which for 2014 is $993 for an individual and $1,333 for a couple. In 2014, asset limits are $7,160 for an individual and $10,750 for a couple (Medicare Rights Center, 2014). The Specified Low-Income Medicare Beneficiary (SLMB) Program assists Medicare beneficiaries with paying for Part B premiums (DHHS, 2014). The monthly income limit for the SLMB program is 120% FPL plus $20. Therefore, for 2014, the income limits are $1,187 for an individual and $1,593 for a couple. The resource limits for 2014 are the same as they are for the QMB program (Medicare Rights Center, 2014). The Qualified Individual (QI) Program also helps beneficiaries with Part B premiums; however, you have to reapply each year for the QI program and the applications are granted on a first-come, first-serve basis (DHHS, 2014). Resource limits in 2014 for the QI program are the same for the other two programs, but the income limit is 135% of the federal poverty level plus $20 per month. For 2014, this is the equivalent of $1,331 for an individual and $1,790 for a couple (Medicare Rights Center, 2014). (Note that the additional $20 per month is because the first $20 of your income is “disregarded”).

The last program is the Qualified Disabled and Working Individuals (QDWI) Program, which helps beneficiaries pay for Part A premiums (DHHS, 2014). The QDWI program is intended for people who received Medicare as part of their disability, but they returned to work and can no longer receive free Part A. In order to qualify, you have to be under the age of 65, be disabled, no longer receive free Medicare Part A, not be eligible for Medicaid, and meet the income and resource limits. The income limit for QDWI is 200% of the federal poverty level. However, income is calculated in the same manner as it is for SSI benefits. All of your income is counted (earned, unearned, in-kind, etc.); however, the first $65 of earned and income and the first $20 of unearned income (per month) is excluded. After that $85 is subtracted, only half of the remaining income is actually counted to determine eligibility. Therefore, you can actually earn as much as 400% of the federal poverty level to qualify for QDWI. The resource limits are lower, however. In 2014, resource limits for the QDWI program are $4,000 for individuals and $6,000 for couples (Linebaugh, 2014).

The threshold amounts mentioned are for 2014. This is because the federal poverty level typically increases each year and is not announced until January or February (Medicare Rights Center, 2014). In addition, some states determine income and resource amounts differently; therefore, if your income and resources are higher than the federally-determined levels, you may still qualify. In fact, some states do not have resource limits at all (DHHS, 2014). Income and resource exclusions are based on federal law; however, some states choose to exclude more than what is federally required (Medicare Rights Center, 2014). If you think you might qualify for a Medicare Savings Program and would like to apply, you can contact you State Medical Assistance (Medicaid) office or call 1-800-Medicare (DHHS, 2014).

Programs of All-Inclusive Care for the Elderly (PACE)

PACE is defined as “a health care program that receives capitated payments in exchange for offering specialized services to Medicare and Medicaid beneficiaries who are age 55 or older and who need the degree of care usually provided in nursing facilities” (CBO, 2013, p. 41). PACE was authorized as part of the Balanced Budget Act (BBA) of 1997. It operates as a three-way partnership between the federal government (Medicare), the state government (Medicaid), and the PACE organization. The program is specifically intended for the “frail elderly” and is meant to help this population live within the community, rather than being institutionalized (CBO, 2013; CMS, 2011b).

PACE offers a wide range of health care services, as well as social services. Most PACE programs offer primary care; hospital care; medical specialty services; prescription drugs (including Part D drugs); nursing home services; nursing services; personal care services; emergency services; home care; physical therapy; occupational therapy; adult day health care; recreational therapy; meals; dental care; nutritional counseling; social services; laboratory and x-ray services; social work counseling; and end of life care. In addition, transportation, hospital, nursing home, home health, and other specialized services are usually provided under contract. In most cases, beneficiaries are given the opportunity to live at home (CMS, 2011b).

In order to qualify for PACE, beneficiaries must be 55 or older, live in a PACE service area, be eligible for nursing home care, and be able to live safely in a community setting at the time of enrollment. PACE is funded through Medicare and Medicaid through capitation payments (CBO, 2013; CMS, 2011b). A capitated payment can be defined as, “a single payment, made on a per-enrollee basis, that covers all care within a specified set of benefits….The recipient of a capitated payment keeps the difference between its cost and the amount of the payment if costs are below the payment, but it is responsible for paying any costs that exceed the capitated payment” (CBO, 2013, p. 39). This means that Medicare and Medicaid will pay a flat capitated payment per enrollee to the PACE organization, which goes into a pool that the provider uses to deliver care to all the enrollees in the program. In return, the PACE organization assumes all financial risk, but does not have to return any funding that is not needed. Since PACE organizations provide services to dually eligible participants, they receive two capitated payments per month per enrollee – one from Medicare and one from Medicaid (CMS, 2011b).

The Centers for Medicare and Medicaid Services clarify that, even though PACE has similarities to Medicare Advantage, it is not an MA plan and it does have many differences to MA plans. One example is the payment structure as already explained. In addition, it is only available in limited areas, and not available in all states; since PACE works in conjunction with Medicaid, a state-run program, the state has to also be involved with the PACE program. Furthermore, it is not available to all Medicare beneficiaries since it is intended for a defined population of frail elderly individuals (PACE, 2011). If you would like to see if you are eligible for PACE, or to see if there is a PACE provider in your area, go to or call your state Medicaid office (DHHS, 2014).