What to Do If You Have a Covered California Plan & Become Eligible for Medicare? (Part 4)

What to Do If You Have a Covered California Plan & Become Eligible for Medicare? (Part 4)

This is the fourth and last article in a series to address various scenarios as more people who have a Covered California plan become eligible for Medicare. This article focuses on people transitioning from expanded Medi-Cal (or MAGI Medi-Cal) to Medicare. Previous articles provided information about people entitled to Medicare Part A without a premium, and others who have to pay a premium if they want Part A.

What is expanded or MAGI Medi-Cal?
The Affordable Care Act, commonly called Obamacare, allowed states to expand Medicaid (known as Medi-Cal in California) to include more people. California decided to expand Medi-Cal to include some people who previously could not qualify for Medi-Cal. One new group who can qualify for expanded Medi-Cal is people between ages 19-64 years old and not eligible for Medicare. Other groups include children aged 19 or younger, parent/relative caretaker of a qualifying child, and pregnant women.

Comparing MAGI Medi-Cal with “traditional” Medi-Cal
The Medi-Cal programs that existed before expanded Medi-Cal continue unchanged and are referred to as “traditional” Medi-Cal, to distinguish it from expanded Medi-Cal. Eligibility for “traditional” Medi-Cal programs continue to be determined by income, assets and category, for example aged or disabled. Expanded Medi-Cal uses a new methodology to determine eligibility: a person’s modified adjusted gross income (MAGI) reported in their tax return and household size. Hence, expanded Medi-Cal is referred to as MAGI Medi-Cal. Unlike “traditional” Medi-Cal, MAGI Medi-Cal does not take into account an applicant’s assets, such as savings account, stocks, and bonds. See the table for comparison.

No longer eligible for MAGI Medi-Cal but may qualify for “traditional” Medi-Cal or Medicare Savings Programs
People who have MAGI Medi-Cal because they are in the age 19-64 group, no longer qualify when they become eligible for Medicare (because they turn 65 years old or reach the 25th month of collecting Social Security Disability Insurance). When they become eligible for Medicare, an estimated 52% may qualify for “traditional” Medi-Cal and/or Medicare Savings Programs but not others. These programs include:

  • Supplemental Security Income (SSI)
  • Aged & Disabled Federal Poverty Level (A&D FPL)
  • Medi-Cal with Share of Cost (SoC)
  • Medicare Savings Programs, namely Qualified Medicare Beneficiary (QMB), Specified Low Income Medicare Beneficiary (SLMB) and Qualifying Individual (QI)
  • 250% Working Disabled
MAGI Medi-Cal Medicare Savings Programs “Traditional” Medi-Cal for people eligible for Medicare
No asset test Assets ≤ $7,280 for an individual or ≤ $10,930 for couple (Assets do not include residence, one car owned by applicant or $1,500 for burial expenses per applicant.) Assets ≤ $2,000 for an individual or ≤ $3,000 for couple (Assets do not include residence or one car owned by applicant.)
Income eligibility ≤138% FPL Income eligibility

  • QMB ≤ 100% FPL + $20 disregard
  • SLMB ≤ 120% FPL+  $20 disregard
  • QI ≤ 135% FPL + $20 disregard

 

Income eligibility

  • SSI – income low enough to qualify for monthly cash benefits
  • A&D FPL – income ≤ 100% FPL + disregards ≤ 123% FPL
  • Medi-Cal SoC has no income threshold
  • CA Working Disabled – income ≤ 250% FPL

Extra Help
Even if one does not qualify for any “traditional” Medi-Cal or Medicare Savings Program, one may qualify for Extra Help, a federal assistance program to help Medicare beneficiaries pay the costs of their Part D prescription drug plan. Those who qualify for SSI, A&D FPL, CA Working Disabled or any of the three Medicare Savings Programs mentioned automatically qualifies for Extra Help. But a person who qualifies for Medi-Cal SoC does not automatically qualify for Extra Help but may apply voluntarily through Social Security Administration.

Transitioning from MAGI Medi-Cal to Medicare

Who can continue to have MAGI Medi-Cal even if eligible for Medicare
Some people who have MAGI Medi-Cal because they are in a group other than the age 19-64 group, may continue to qualify for MAGI Medi-Cal even when they become eligible for Medicare. For example, someone who is a parent or relative caretaker of a qualifying child may continue with MAGI Medi-Cal when they turn 65 and become eligible for Medicare.

Not eligible for MAGI Medi-Cal or “traditional” Medi-Cal, only Medicare
People who no longer qualify for MAGI Medi-Cal when they become eligible for Medicare and do not qualify for any “traditional” Medi-Cal or Medicare Savings Program will see an increase in their costs. (See sidebar for examples.) If they are not entitled to Medicare Part A without a premium, they may choose to enroll in Part A and pay the Part A premium. Or, they may choose not to enroll in Part A, buy a plan from Covered California and apply for financial help. See previous articles: Part 1, Part 2 and Part 3.

If they are entitled to Medicare Part A without a premium, most would enroll in Medicare and pay the Part B premium of $121.80 (2016). If they choose to join a Medicare Advantage plan or buy a Medigap policy, they would have to pay the premium. They may also have to pay a premium for a Medicare Part D prescription drug plan. Here are some ways to keep costs down:

  • Join a Medicare Advantage plan with $0 premium. In some counties, there are Medicare Advantage plans with $0 premium. Many Medicare Advantage plans include prescription drug benefits, thus joining a separate stand-alone Part D plan is not necessary or possible. Although joining a Medicare Advantage plan could reduce premium cost, consider other out-of-pocket costs such as copayments, coinsurance and deductibles.
  • Apply for Extra Help (or Low Income Subsidy) through the Social Security Administration. Depending on a person’s income and assets, Extra Help may pay some of the Part D plan premium and deductible and lower a beneficiary’s copayment. The income limit is 150% FPL and the asset limit is ≤ $7,280 for an individual or ≤ $10,930 for couple. (Assets do not include residence, one car owned by applicant or $1,500 for burial expenses per applicant.) See Example 2 in sidebar. To apply, go to the Social Security Administration’s website at ssa.gov. For help with the Extra Help application, contact your local Health Insurance Counseling & Advocacy Program (HICAP) at 1-800-434-0222.

Example 2
Mary’s income is 140% FPL and assets are $7,000. Her assets are too high to qualify for “traditional” Medi-Cal programs and her income is too high to qualify for any Medicare Savings Programs. However, she may qualify for Extra Help and can voluntarily apply through Social Security Administration.

Example 1
Mike’s income is 130% FPL and assets are $10,000. Although his income is within the eligibility limit for the QI, 250% Working Disabled, Medi-Cal with SoC and Extra Help programs, his assets are too high to qualify for any of these programs.


This article is part of an educational series sponsored by SCAN Health Plan.

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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.