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Medicaid & Medicare: Maximizing Coverage for Disabled Clients
Maximizing health coverage for DAP clients:
Before and after winning the case
Outline prepared by Geoffrey Hale and Cathy Roberts - updated August 2012
This outline is intended to assist Disability Advocacy Program (DAP) advocates maximize health insurance coverage for clients they are representing on Social Security/SSI disability determinations. We begin with a discussion of coverage options available while your client’s DAP case is pending and then outline the effect winning the DAP case can have on your client’s access to health care coverage. How your client is affected will vary depending on the source and amount of disability income he or she receives after the successful appeal.
Public health coverage for your clients will primarily be provided by Medicaid and Medicare. The two programs are structured differently and have different eligibility criteria, but in order to provide the most complete coverage possible for your clients, they must work effectively together. Understanding their interactions is essential to ensuring benefits for your client. Here is a brief overview of the programs we will cover:
a. Medicaid. Medicaid is the public insurance program jointly funded by the federal, state and local governments for people of limited means. For federal Medicaid law, see 42 U.S.C. § 1396 et seq., 42 C.F.R. § 430 et seq. Regular Medicaid is described in New York’s State Plan and codified at N.Y. Soc. Serv. L. §§ 122, 131, 363- 369-1; 18 N.Y.C.R.R. § 360, 505. New York also offers several additional programs to provide health care benefits to those whose income might be too high for Regular Medicaid:
i. Family Health Plus (FHPlus) is an extension of New York’s Medicaid program that provides health coverage for adults who are over-income for regular Medicaid. FHPlus is described in New York’s 1115 waiver and codified at N.Y. Soc. Serv. L. §369-ee.
ii. Child Health Plus (CHPlus) is a sliding scale premium program for children who are over-income for regular Medicaid. CHPlus is codified at N.Y. Pub. Health L. §2510 et seq.
b. Medicare. Medicare is the federal health insurance program providing coverage for the elderly, disabled, and people with end-stage renal disease. Medicare is codified under title XVIII of the Social Security Law, see 42 U.S.C. § 1395 et seq., 42 C.F.R. § 400 et seq. Medicare is divided into four parts:
i. Part A covers hospital, skilled nursing facility, home health, and hospice care, with some deductibles and coinsurance. Most people are eligible for Part A at no cost. See 42 U.S.C. § 1395c, 42 C.F.R. Pt. 406.
ii. Part B provides medical insurance for doctor’s visits and other outpatient medical services. Medicare Part B has significant cost-sharing components. There are monthly premiums (the standard premium in 2012 is $99.90. In addition, there is a $135 annual deductible (which will increase to $155 in 2010) as well as 20% co-insurance for most covered out-patient services. See 42 U.S.C. § 1395k, 42 C.F.R. Pt. 407.
iii. Part C, also called Medicare Advantage, provides traditional Medicare coverage (Parts A and B) through private managed care insurers. See 42 U.S.C. § 1395w, 42 C.F.R. Pt. 422. Premium amounts for Medicare Advantage plans vary. Some Medicare Advantage plans include prescription drug coverage.
iv. Part D is an optional prescription drug benefit available to anyone with Medicare Parts A and B. See 42 U.S.C. § 1395w, 42 C.F.R. § 423.30(a)(1)(i) and (ii). Unlike Parts A and B, Part D benefits are provided directly through private plans offered by insurance companies. In order to receive prescription drug coverage, a Medicare beneficiary must join a Part D Plan or participate in a Medicare Advantage plan that provides prescription drug coverage.
c. Medicare Savings Programs (MSPs). Funded by the State Medicaid program, MSPs help eligible individuals meet some or all of their cost-sharing obligations under Medicare. See N.Y. Soc. Serv. L. § 367-a(3)(a), (b), and (d). There are three separate MSPs, each with different eligibility requirements and providing different benefits:
i. Qualified Medicare Beneficiary (QMB). The QMB program provides the most comprehensive benefits. Available to those with incomes at or below 100% of the Federal Poverty Level (FPL), the QMB program covers virtually all Medicare cost-sharing obligations: Part B premiums, Part A premiums, if there are any, and any and all deductibles and co-insurance.
ii. Special Low-Income Medicare Beneficiary (SLMB). For those with incomes between 100% and 120% FPL, the SLMB program will cover Part B premiums only.
iii. Qualified Individual (QI-1). For those with incomes between 120% and 135% FPL, but not otherwise Medicaid eligible, the QI-1 program covers Medicare Part B premiums.
d. Medicare Part D Low Income Subsidy (LIS or “Extra Help”). LIS is a federal subsidy administered by CMS that helps Medicare beneficiaries with limited income and/or resources pay for some or most of the costs of Medicare prescription drug coverage. See 42 C.F.R. § 423.773. Some of the costs covered in full or in part by LIS include the monthly premiums, annual deductible, co-payments, and the coverage gap. Individuals eligible for Medicaid, SSI, or MSP are deemed eligible for full LIS benefitsSee 42 C.F.R. § 423.773(c). LIS applications are treated as (“deemed”) applications for MSP benefits, See the Medicare Improvements for Patients and Providers Act (MIPPA) of 2008, Pub. Law 110-275.
II. WHILE THE DAP APPEAL IS PENDING
Does your client have health insurance? If not, why isn’t s/he getting Medicaid, Family Health Plus or Child Health Plus?
There have been many recent changes which expand eligibility and streamline the application process. All/most of your DAP clients should qualify. Significant changes to Medicaid include:
More detailed information on recent changes to Medicaid is available at:
III. AFTER CLIENT IS AWARDED DAP BENEFITS
a. Medicaid eligibility.
Clients receiving even $1.00 of SSI should qualify for Medicaid automatically. The process for qualifying will differ, however, depending on the source of payment:
1. Clients Receiving SSI Only:
i. These clients are eligible for full Medicaid without a spend-down. See N.Y. Soc. Serv. L. § 366(2).
ii. Medicaid coverage is automatic. No separate application/ recertification required.
iii. Most SSI-only recipients are required to participate in Medicaid managed care. See N.Y. Soc. Serv. L. §364-j.
2. Concurrent (SSI/SSD) cases:
Eligible for full Medicaid since receiving SSI. See N.Y. Soc. Serv. L. § 366(2).
3. SSD only clients:
i. They can still qualify for Medicaid but may have a spend-down. Federal Law allows states to use a “spend-down” to extend Medicaid to “medically needy” persons in the federal mandatory categories (children, caretakers, elderly and disabled people) whose income or resources are above the eligibility level for regular Medicaid. See 42 U.S.C. § 1396 (a) (10) (ii) (XIII).
ii. Under spend-down, applicants in New York’s Medically Needy program can qualify for Medicaid once their income/resources, minus incurred medical expenses, fall below the specified level. For an explanation of spend-down, see 96 ADM 15.
For more about the Medicaid spend-down, see our article on Medicaid Spend-down
b. Family Health Plus
Until your client qualifies for Medicare, those over-income for Medicaid may qualify for Family Health Plus without needing to satisfy a spend-down. It covers adults without children with income up to 100% of the FPL and adults with children up to 150% of the FPL. The eligibility tests are the same as for regular Medicaid with two additional requirements: applicants must be between the ages of 19 and 64 and they generally must be uninsured. See N.Y. Soc. Serv. L. § 369-ee et. seq.
For more information about FHP eligibility generally, see the SDOH website at: http://www.health.state.ny.us/nysdoh/fhplus/who_can_join.htm.
Once your client begins to receive Medicare, he or she will not be eligible for FHP, because FHP is generally only available to those without insurance.
For more information on FHP see our article on Family Health Plus.
IV. LOOMING ISSUES - MEDICARE ELIGIBILITY (WHETHER YOU LIKE IT OR NOT)
a. SSI-only cases
Clients receiving only SSI aren’t eligible for Medicare until they turn 65, unless they also have End Stage Renal Disease.
b. Concurrent (SSD and SSI) cases
1. Medicare eligibility kicks in beginning with 25th month of SSD receipt. See 42 U.S.C. § 426(f).
Exception: In 2000, Congress eliminated the 24-month waiting period for people diagnosed with ALS (Lou Gehrig’s Disease.) See 42 U.S.C. § 426 (h)
2. Enrollment in Medicare is a condition of eligibility for Medicaid coverage; these clients cannot decline Medicare coverage. (05 OMM/ADM 5; Medicaid Reference Guide p. 344.1)
3. Medicare coverage is not free. Although most individuals receive Part A without any premium, Part B has monthly premiums and significant cost-sharing components.
4. Medicaid and/or the Medicare Savings Program (MSP) should pick up most of Medicare’s cost sharing. Most SSI beneficiaries are eligible not only for full Medicaid, but also for the most comprehensive MSP, the Qualified Medicare Beneficiary (QMB) program.
i. Parts A & B (hospital and outpatient/doctors visits):
a. Medicaid will pick up premiums, deductibles, co-pays. N.Y. Soc. Serv. L. § 367-a (3) (a).
For those not enrolled in an MSP, SSA normally deducts the Part B premium directly from the monthly check. However, SSI recipients are supposed to be enrolled automatically in QMB, and Medicaid is responsible for covering the premiums. Part B premiums should never be deducted from these clients’ checks.
Medicaid and QMB-only recipients should NEVER be billed directly for Part A or B services. Even non-Medicaid providers are supposed to be able to bill Medicaid directly for services. Clients are only responsible for Medicaid co-pay amount. See 42 U.S.C. § 1396a (n)
ii. Part D (prescription drugs):
a. Clients enrolled in Medicaid and/or MSP are deemed eligible for Low Income Subsidy (LIS aka Extra Help). See 42 C.F.R. § 423.773(c); SSA POMS SI § 01715.005A.5; New York State
Department of Health website at: http://tinyurl.com/W393P.
If client doesn’t enroll in Part D plan on his/her own, s/he will be automatically assigned to a benchmark plan. See 42 C.F.R. § 423.34 (d).
LIS will pick up most of cost-sharing.
Because your clients are eligible for full LIS, they should have NO deductible and NO premium if they are in a benchmark plan, and will not be subject to the coverage gap (aka “donut hole”). See 42 C.F.R. §§ 423.780 and 423.782. The full LIS beneficiary will also have co-pays limited to either $1.10 or $3.30 (2010 amounts). See 42 C.F.R. § 423.104 (d) (5) (A).
Other important points to remember:
- Medicaid co-pay rules do not apply to Part D drugs.
- Your client’s plan may not cover all his/her drugs.
- You can help your clients find the plan that best suits their needs:
To figure out what the best Part D plans are best for your particular client, go to www.medicare.gov . Click on “formulary finder” and plug in your client’s medication list. You can enroll in a Part D plan through www.medicare.gov, or by contacting the plan directly.
– Your clients can switch plans at any time during the year.
iii. Part C (“Medicare Advantage”):
a. Medicare Advantage plans provide traditional Medicare coverage (Parts A and B) through private managed care insurers. See 42 U.S.C. § 1395w, 42 C.F.R. Pt. 422.
Medicare Advantage participation is voluntary.
For those clients enrolled in Medicare Advantage Plans, the QMB cost sharing obligations are the same as they are under traditional Medicare: Medicaid must cover any premiums required by the plan, up to the Part B premium amount; Medicaid must also cover any co-payments and co-insurance under the plan. As with traditional Medicare, both providers and plans are prohibited from billing the beneficiary directly for these co-payments.
c. SSD only individuals:
1. Same Medicare eligibility criteria (24 month waiting period, except for persons w/ ALS).
i. During the 24 month waiting period, explore eligibility for Medicaid or Family Health Plus.
2. Once Medicare eligibility begins:
ii. Parts A & B:
SSA will automatically enroll your client.
Part B premiums will be deducted from monthly Social Security benefits. (Part A will be free – no monthly premium)
Clients have the right to decline ongoing Part B coverage, BUT this is almost never a good idea, and can cause all sorts of headaches if client ever wants to enroll in Part B in the future. (late enrollment penalty and can’t enroll outside of annual enrollment period, unless person is eligible for Medicare Savings Program – see more below)
Clients can decline “retro” Part B coverage with no penalty on the Medicare side – just make sure they don’t actually need the coverage. Risky to decline if they had other coverage during the retro period – their other coverage may require that Medicare be utilized if available.
Part A and Part B also have deductibles and co-pays. Medicaid and/or the MSPs can help cover this cost sharing.
iii. Part D:
Client must affirmatively enroll in Part D, unless they receive LIS. See 42 U.S.C. § 1395w-101 (b) (2), 42 C.F.R. § 423.38 (a).
Enrollment is done through individual private plans.
LIS recipients will be auto-assigned to a Part D benchmark plan if they have not selected a plan on their own.
Client can decline Part D coverage with no penalty if s/he has “comparable coverage.” 42 C.F.R. § 423.34 (d) (3) (i). If no comparable coverage, person faces possible late enrollment penalty & limited enrollment periods. 42 C.F.R. § 423.46. However, clients receiving LIS do not incur any late enrollment penalty. 42 C.F.R. § 423.780 (e).
Part D has a substantial cost-sharing component – deductibles, premiums and co-pays which vary from plan to plan. There is also the coverage gap, also known as “donut hole,” which can leave beneficiaries picking up 100% of the cost of their drugs until/unless a catastrophic spending limit is reached. The LIS program can help with Part D cost-sharing.
Use Medicare’s website to figure out what plan is best for your client. (Go to www.medicare.gov , click on “formulary finder” and plug in your client’s medication list. ) You can also enroll in a Part D plan directly through www.medicare.gov.
For more a more detailed explanation of Part D, see our training outline Medicare Part D – Overview
iii. Help with Medicare cost-sharing
a. Medicaid –
After eligibility for Medicare starts, client may still be eligible for Medicaid, with or without a spend-down.
There are lots of ways to help clients meet their spend-down – including
- Medicare cost sharing amounts (deductibles, premiums, co-pays)
- over the counter medications if prescribed by a doctor;
- expenses paid by state-funded programs like EPIC and ADAP;
- medical bills of person’s spouse or child;
- health insurance premiums.
- joining a pooled Supplemental Needs Trust (SNT).
For more about the Medicaid spend-down, see our article on Spend-down.
b. Medicare Savings Program (MSP) –
If client is not eligible for Medicaid, explore eligibility for Medicare Savings Program (MSP). MSP pays for Part B premiums and gets you into the Part D LIS. There are no asset limits in the Medicare Savings Program. One of the MSPs (QMB), also covers all cost sharing for Parts A & B.
If your client is eligible for Medicaid AND MSP, enrolling in MSP may subject him/her to, or increase a spend-down, because Medicaid and the various MSPs have different income eligibility levels. It is the client’s choice as to whether or not to be enrolled into MSP.
c. Part D Low Income Subsidy (LIS) –
If your client is not eligible for MSP or Medicaid, s/he may still be eligible for Part D Low Income Subsidy.
For more information, see Pathways to Extra Help - the Part D low income subsidy and how it can help your clients.
Applications for LIS are also be treated as applications for MSP, unless the client affirmatively indicates that s/he does not want to apply for MSP.
d. Medicare supplemental insurance (Medigap) --
Medigap is supplemental private insurance coverage that covers all or some of the deductibles and coinsurance for Medicare Parts A and B. Medigap is not available to people enrolled in Part C.
See NYS Insurance Department webpage for more info about Medigap coverage, carriers and rates: http://www.ins.state.ny.us/caremain.htm
e. Medicare Advantage –
Medicare Advantage plans “package” Medicare (Part A and B) benefits, with or without Part D coverage, through a private health insurance plan. The cost-sharing structure (deductible, premium, co-pays) varies from plan to plan.
For a list of Medicare Advantage plans in your area, go to www.medicare.gov – click on “find health plans.”
f. NY Prescription Saver Card --
NYP$ is a state-sponsored pharmacy discount card that can lower the cost of prescriptions by as much as 60 percent on generics and 30 percent on brand name drugs. Can be used during the Part D “donut hole” (coverage gap)
g. For clients living with HIV:
ADAP [AIDS Drug Assistance Program]
ADAP provides free medications for the treatment of HIV/AIDS and opportunistic infections. ADAP can be used to help meet a Medicaid spenddown and get into the Part D Low Income subsidy.
For more information about ADAP, go to
V. GETTING MEDICAID IN THE DISABLED CATEGORY AFTER AN SSI/SSDI DENIAL
What if your client's application for SSI or SSDI is denied based on SSA's finding that they were not "disabled?" Obviously, you have your appeals work cut out for you, but in the meantime, what can they do about health insurance? It is still possible to have Medicaid make a separate disability determination that is not controlled by the unfavorable SSA determination in certain situations. Specifically, an applicant is entitled to a new disability determination where he/she:
 Potential wrinkle – for some clients Medicaid is not automatically pick up cost-sharing. In Monroe County we have had several cases where SSA began deducting Medicare Part B premiums from the checks of clients who were receiving SSI and Medicaid and then qualified for Medicare. The process should be automatic. Please contact Geoffrey Hale in our Rochester office if you encounter any cases like this.
Under terms established to provide benefits for QMBs, a provider agreement necessary for reimbursement “may be executed through the submission of a claim to the Medicaid agency requesting Medicaid payment for Medicare deductibles and coinsurance for QMBs.” CMS State Medicaid Manual, Chapter 3, Eligibility, 3490.14 (b), available at: http://www.cms.hhs.gov/Manuals/PBM/itemdetail.asp?itemID=CMS021927.
Benchmark plans are free if you are an LIS recipient. The amount of the benchmark changes from year to year. In 2013, a Part D plan in New York State is considered benchmark if it provides basic Part D coverage and its monthly premium is $43.22 or less.
 These citations courtesy of Jim Murphy at Legal Services of Central New York.
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