Medicare Savings Program is Extended for Low-Income Beneficiaries

Medicare Savings Program is Extended for Low-Income Beneficiaries

On December 15, 2010, President Obama signed the Medicare and Medicaid Extenders Act of 2010, which among other things extends the Qualified Individual (QI) Medicare Savings Program through December 31, 2011.

This is good news as the QI program is crucial to many seniors and younger adults with Medicare whose incomes are between 120 and 135% of the federal poverty level (currently about $13,000 to $14,600 annually). The program pays for their Medicare Part B premiums which provide coverage for physician and other outpatient services. Without this QI assistance, these Medicare beneficiaries would be forced to spend about 10% of their limited incomes each year just on their Part B premiums ($115.50 per month in 2011).

Receiving the QI benefit also automatically entitles beneficiaries to the full Medicare Part D prescription drug Low Income Subsidy (LIS or Extra Help), which covers a large portion of their out-of-pocket drug costs. According to the National Council on Aging, the QI benefit represents an average total savings of $5,200 per year for these low-income beneficiaries; the savings are significantly more for those with high prescription drug use. These beneficiaries require this money to meet their basic needs such as housing and food, and cannot afford to spend it on rising medical and drug costs.

Congress’s extension of the QI program will help ensure that low-income older adults continue to have access to this Medicare Savings Program for at least one more year. Advocates are encouraging Congress to stabilize this program by making it permanent like the other MSPs.

See our Medicare Savings Programs section for more info on the QI program and other MSPs.

Karen Fletcher
Our blogger Karen J. Fletcher is CHA's publications consultant. She provides technical expertise, writing and research on Medicare, health disparities and other health care issues. With a Masters in Public Health from UC Berkeley, she serves in health advocacy as a trainer and consultant. See her current articles.