Medicare Savings Programs

Medicare Savings Programs help pay your Medicare costs if you have limited income and savings. Medicare Savings Programs are also called MSPs, Medicare Buy-In programs, or Medicare Premium Payment Programs. There are three main programs, with different benefits and eligibility requirements, and a fourth program if you have a disability. 

The three main MSP's are:

• Qualifying Individual (QI) Program: QI pays the Medicare Part B premium, and reimburses the recipient for premiums paid up to three months before your MSP effective date, and within the same year of that effective date. 

• Specified Low-income Medicare Beneficiary (SLMB): SLMB pays for the Medicare Part B premium, and reimburses for premiums paid up to three months before your MSP effective day.  Unlike QI, a recipient may be reimbursed for premiums from the previous calendar year. 

• Qualified Medicare Beneficiary (QMB): QMB pays for Medicare Parts A and B premiums. A QMB recipient, typically should not be billed for Medicare-covered services provided in a recipient's Medicare Advantage Plan’s network. A QMB recipient should not owe Medicare deductibles, copayments, and coinsurances, from network providers. 

There is a fourth MSP called the Qualified Disabled Working Individual (QDWI), which pays for the Medicare Part A premium for certain people who are eligible for Medicare due to disability. Contact your local Medicaid office to learn more. 

There are even more benefits to enrolling in an MSP. MSP enrollment: 

• Allows a recipient to enroll in Part B outside of the regular enrollment periods; 

• Eliminates the Part B late enrollment penalty if there is one, and; 

• Automatically enrolls the recipient in Extra Help, the federal program that helps pay Medicare prescription drug (Part D) plan costs 

To qualify for an MSP, a beneficiary must have Medicare Part A and meet income and asset guidelines.  

If a beneficiary does not have Part A but meets QMB eligibility guidelines, the state may have a process to allow you to enroll in Part A and QMB outside of the General Enrollment Period.  

Income and asset guidelines vary by state. Certain income and assets may not count and some states do not count assets at all when assessing MSP eligibility. You can contact your State Health Insurance Assistance Program (SHIP) to learn more about MSPs in your state and to receive assistance with the application process. 

The MSP program helps many beneficiaries satisfy Medicare costs.  Contact your local SHIP to see if you’re eligible for an MSP in your state.

This article is based on a post on Dear Marci, one of the best sources of free Medicare assistance available on the internet. Dear Marci is a "biweekly e-newsletter that helps consumers—people with Medicare, their families and caregivers—understand their Medicare benefits and options." Each issue features Medicare coverage advice, basic health tips and links to vital health care resources. You can subscribe to read and submit questions for thoughtful and helpful answers.  Dear Marci is part of MedicareInteractive.org, powered by the Medicare Rights Center.  

Despite Inability to Access Bank Account, Applicant Denied Medicaid

Medicaid is a legal system overly concerned with costs, rather than serving the best interest of those in need.  Proof of the truth of this characterization comes from an Indiana  court decision.  An Indiana appeals court recently ruled that a Medicaid applicant’s bank account is a disqualifying available resource even though the applicant was incapacitated and did not have the actual ability to access the account. Southwood Healthcare Center v. Indiana Family and Social Services Administration (Ind. Ct. App., No. 21A-MI-1778, March 11, 2022).

Samuel Hill entered a nursing home and was declared by a doctor to be incapacitated with dementia. The nursing home, acting as Mr. Hill’s representative, applied for Medicaid benefits on his behalf. Due to the severity of Hill’s condition, a petition was filed seeking the appointment of a legal guardian over his person and estate. On April 1, 2020, Amanda Brookins of Compassionate Care Guardian Services, LLC, was appointed as Hill’s guardian.  The state denied the benefits due to excess resources because Mr. Hill had a bank account balance totaling $11,367.71.

Mr. Hill, through his guardian, appealed, arguing that due to his incapacity, he did not actually have the ability to access the funds in the bank account at the time of the application. The state denied the appeal, and the trial court affirmed. Mr. Hill appealed again.

The Indiana Court of Appeals affirmed, holding that the bank account is an available resource even if Mr. Hill did not have the ability to access the funds. According to the court, “because [Mr.] Hill’s right and authority over the funds remained intact, the funds were available to him.”  The Court's opinion does not divulge whether there was evidence that the guardian, likewise, was unable to access the account, and it appears that the Court considered only the very narrow issue of whether the account was legally a countable resource, despite the fact that the applicant's disability made the account inaccessible.  

One wonders why the system is a binary system with the only possible determinations being an approval or disapproval?  In this case, wouldn't an approval conditioned upon the asset being spent down for the applicant's nursing home care, and an adjustment of Medicaid's reimbursement to the institution have been a more expedient result?  As this matter played out, it is likely that legal expenses consumed the modest account.  Moreover, the institution may have been unreimbursed for some part of Mr. Hill's care. A system that creates additional losses for those who must rely on the system is not well-functioning.   

This case also serves as an example to those concerned with guardianship risks; institutional care often necessitates and therefore encourages court-appointed guardians.  Where necessary and functioning properly, guardians protect the rights of the ward.  But here, a guardian pursued a legal matter to no conclusion that benefitted the ward, and, in fact put the interests of the ward and his caregiver in conflict.  Properly functioning a guardian should be working to ensure the care of the ward, and that effort naturally benefits institutional care.  The guardian in this case pursued a course of action that may have resulted in an institution being forced to wait for payment, and eventually, to accept less than the institution might have received by timely application of Medicaid benefits.  This course of action risked the patient being dumped by the institution, thereby potentially jeopardizing the ward's consistent care.    

Beware Direct Transfer Designations (TODs and PODs)- Part IV: TOD's in Trust Planning

This Blog has addressed in several previous articles the dangers of direct transfer designations such as transfers on death (TOD's) and payable on death (POD's) designations:

• Beware Direct Transfer Designations (TODs and PODs);
• Aging in Place Planning Heightens Necessity of Trust Funding;
• Beware Direct Transfer Designations (TODs and PODs)- Part II: Ohio Transfer of Death Designation Affidavit (TODDA) for Real Estate- Lapse of Insurance Coverage;
• Beware Direct Transfer Designations (TODs and PODs)- Part III- Transfer on Death Deed for Real Estate Results in Loss of Insurance Coverage and Impairment of Asset Value.

These articles recount why immediate transfers on the death of an owner mean risk, especially in an estate plan with an "aging in place" objective.  Regardless, these devices remain popular as inexpensive means to avoid probate and death, and are often seen as an alternative to a trust. 

Unfortunately, they are also frequently used in conjunction with trust planning.  A few years ago, when reviewing a trust for a client, the client explained that her attorney prepared a transfer on death deed for her real estate rather than a deed conveying the real property to her trust.  When asked whether the attorney explained this peculiar choice, the client stated that she received no explanation.  

I recently reviewed another estate plan incorporating a trust, and again discovered the drafting attorney utilized a transfer on death deed, or more accurately, a Transfer on Death Desgnation Affidavit (TODDA) as they are now called in Ohio.  I was surprised that two different clients, with two different lawyers, located in separate parts of the state had designed an estate plan around a trust with what I consider such a peculiar choice for handling the real property.  I searched an estate planning listserv, an electronic bulletin board where attorneys share information, and learned that there is a group of estate planning lawyers that employ transfers on death for real estate and other assets when utilizing a trust because it "retains ownership of the property in the individual name of the client."  

This is "peculiar" because the bedrock of trust planning is changing "ownership" of assets in favor of "deliberate" planning and administration.  In other words, trust lawyers recognize that owning assets in the name of an individual, or jointly in the names of more than one individual, means automatic, forced, and vested rights which often create disadvantages such as the necessity of probate. The disadvantages of individual ownership of property and assets are precisely why trusts exist.  Trusts, by intent and design, typically avoid the automatic transfer of property at the arbitrary moment of death, whether or not that transfer involves probate, by appointing a trustee, a person with a mind and heart, and authority to avoid the disadvantages of mindless and heartless immediate transfer of assets.  

Simply, the automatic transfer of ownership of property on any arbitrary date, such as the date of the owner's death, is fraught with risk and foreseeable risk of loss.  A beneficiary may:

• die with, shortly before, or shortly after the owner, resulting in probate of the assets in the estate of the beneficiary (and not incidentally, a different possible ultimate distribution of the deceased's estate- many parents prefer their estate to pass to their grandchildren rather than a daughter or son-in-law, for example);
• be disabled or incompetent to manage property, or may become so shortly before or after the owner's death;
• be a recipient of means-tested government benefits, and may, as a result of asset ownership  lose necessary government benefits or assistance;
• suffer from impairment risking loss of the assets, such a mental illness, substance addiction, non-substance addiction (gambling), or the like;
• have pledged assets to third parties such as cults or quasi-religious organizations;
• have unavoidable judgment liens, restitution orders, creditors, receivers, or trustees in bankruptcy waiting to collect the inheritance for distribution to third parties.

These examples only scratch the surface of a deep well of possible, foreseeable circumstances that may result in the loss of inheritance to third parties, and/or that may compromise the safety net protecting a beneficiary intended by a deceased. 

These risks are often unavoidable when assets pass automatically and arbitrarily on a specific date, rather than through a  process of evaluation, consideration, and deliberation. Trusts, generally, more capably permit a trustee to maneuver through these circumstances protecting the assets for the benefit of the intended beneficiaries, while disarming third parties from making claims.  

North Carolina: Rethinking Guardianship - Bill and Deborah

Bill Donohue and Deborah Woolard share the story of their choice to not seek guardianship for their son, Jeremy Woolard Donahue, who has Down Syndrome.

Rethinking Guardianship's mission is to promote less restrictive alternatives to guardianship and effect long-term changes in North Carolina's guardianship system. To learn more, visit:  https://rethinkingguardianshipnc.org/

Watch the video below:

North Carolina- Rethinking Guardianship - Janie and Suvya

Janie Desmond and Suvya Carroll discuss how they use supported decision-making in their lives as young adults living with intellectual/developmental disabilities.

Rethinking Guardianship's mission is to promote less restrictive alternatives to guardianship and effect long-term changes in North Carolina's guardianship system. To learn more, visit: https://rethinkingguardianshipnc.org/

Watch the video below: