Too Good to be True?

A client emailed me recently with a picture of a postcard he had received, the subject line was “Legit?”.  The postcard advertised “adding up to $144 back into your monthly Social Security check” and “cost reduction savings… worth $4900 per year”.  Is it Legit? Like many things in life the answer is “yes, but”.  The card he received highlighted three distinct programs, one is a Medicare Advantage Plan with a Part B premium reduction and the second is the Extra Help for Part D (also known as Low-Income-Subsidy LIS) and finally Medicare Savings Plan programs for low-income people.

The Part B Premium Reduction

Part B premium reduction plans have been available for over ten years for insurers to include in their Medicare Advantage plans. Of the 38 Medicare Advantage Plans currently available in Santa Clara County, three plans include a Part B Premium reduction.  To qualify for the plan, beneficiaries must have Part A and Part B, live in the service area and be responsible for paying the Part B premium.¹ There are tradeoffs with these plans, the benefits may not include drug coverage, they may have very high copays and out of pocket maximums or they may require a virtual primary care doctor.

If a beneficiary is willing to make the trade off, Part B premium reduction plans may put over a thousand dollars back in their pocket. One of my clients signed up for a plan that included the Part B reduction and did not include Part D. He was a Veteran and used VA benefits for drug coverage (this is creditable coverage), the plan was ideal for him. He put money back in his pocket, had local coverage and this did not result in a penalty for no Part D.  If someone without creditable drug coverage signed up for a plan without drug coverage, they would risk lifetime penalties from Medicare.   

Extra Help for Part D

The other program advertised in the ad, was “Extra Help” this program subsidizes beneficiaries Part D prescription drug premium, and the copays for medications on the plan formulary. It will also waive any prior Part D penalty and eliminates the dreaded donut hole also known as the Part D coverage gap. Extra Help for Part D is a separate program than Medicaid (known as MediCal in California).  Generally qualifying for MediCal qualifies the beneficiary for Extra Help, but the guidelines for Extra Help are not as stringent as MediCal; many people who do not have MediCal have the Extra Help benefit.

The 2022 income qualifications are not currently available. In 2021, the income qualifications included up to $19,320 in yearly income ($26,130 for a married couple) and up to $14,790 in resources ($29,520 for a married couple)².  These qualifications don’t include the value of the primary residence, one car and personal items. 

To check eligibility, go to https://secure.ssa.gov/i1020/start.

Medicare Savings Programs

The third program included in the advertisement are the Medicare Savings programs. Nearly 40,000 people in Santa Clara County are enrolled in a Medicare Savings program³, these programs were created to subsidize Part A and B premiums.  Most people have paid for their Part A premium while they or their spouse worked, disabled people who could not work need assistance paying this premium. There are four separate types of Medicare Savings Plans and each have differing qualifications.

The 2022 income qualifications are not currently available. In 2021, the income qualifications included up to $17,628 in yearly income ($23,760 for a married couple) and up to $7970 in resources ($11,960 for a married couple)⁴.  These qualifications don’t include the value of the primary residence, one car and personal items. 

The local MediCal office manages the Medicare Savings Program.  Santa Clara County residents can see if they qualify by calling 408-441-5590.  Apply for the program even if your income levels are slightly higher than the stated guidelines. 

Cheri Brown is a former executive with a national insurance carrier with decades of experience in Medicare sales and training.  Contact her with your Medicare questions at 408-476-0034 or Email MedicareCheri@gmail.com. Not affiliated with the U. S. government or federal Medicare program. A licensed agent may contact you regarding this insurance-related information. This is a solicitation for insurance.

1. https://www.medicare.gov/your-medicare-costs/costs-for-medicare-advantage-plans
2. https://www.medicare.gov/your-medicare-costs/get-help-paying-costs/lower-prescription-costs
3. https://data.chhs.ca.gov/dataset/eligible-individuals-enrolled-in-medicare-savings-programs-msp/resource/42174984-b5d0-473b-83a9-962c70458458
4. https://www.medicare.gov/your-medicare-costs/get-help-paying-costs/medicare-savings-programs