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Thursday, January 9, 2014

Low-Income People with Medicare Need a Permanent Qualified Individual (QI) Program

Marc Steinberg

Deputy Director of Health Policy

More than 450,000 low-income Medicare beneficiaries rely on a little-known program called the Qualified Individual (QI) program to pay for their Medicare Part B premium. Without QI, they would face  more than $100 per month in additional health care premiums. Currently, QI is a temporary program. Since Congress will be determining the future of QI over the next few months as it considers major Medicare legislation, this is an excellent opportunity improve QI by making it permanent.

QI is one of several programs that help low-income beneficiaries pay their Medicare premiums and out-of-pocket costs. QI serves people with incomes between 120 and 135 percent of the federal poverty level ($13,788 to $15,512 per year for an individual) who also have limited financial assets. Without QI, these people would be required to pay the full Medicare Part B premium of $104.90 per month, which would be a major burden for seniors and people with disabilities with low incomes. With QI, their premium is fully covered, effectively raising their disposable income by an extra $1,258 each year.

QI and programs like it are vital because people with Medicare have disproportionately low incomes. Half of people with Medicare had incomes below $22,500 in 2012. And although Medicare provides vital health insurance, it is also has high deductibles and other cost-sharing obligations. Without programs like QI, many older Americans and people with disabilities would not be able to afford the health care they need.

QI is currently not a permanent part of federal law. This makes it different from other programs that serve low-income Medicare beneficiaries like Medicaid and the Part D Extra Help Program. Unlike these other programs, which are permanent, QI has an expiration date. In recent years, QI has typically been authorized to run through the end of a calendar year. Each year, as December 31 approaches, Congress has needed to pass legislation to extend the program for another year or so. This sort of uncertainty has hindered QI from reaching its full potential, because it is difficult to administer a program that is constantly on the brink of expiration.

This year may be different. QI was scheduled to expire on December 31, 2013, and the recent Murray-Ryan budget agreement extended the program until March 31, 2014. But Congress is considering a significant piece of Medicare legislation that would permanently change how Medicare pays physicians. A number of organizations representing beneficiaries and health care providers have called on Congress to take advantage of this opportunity to permanently authorize QI and several other health care programs  that serve low-income people at the same time that it improves physician payments.

It’s not clear what will happen. The House of Representatives has not yet addressed the long-term future of QI in any of its Medicare bills. In December, the Senate Finance Committee passed a Medicare bill that includes a provision to extend QI for five years. Although this would be a longer extension than QI has had in the past, it’s not the permanent fix that beneficiaries need. There’s still a long way to go before any of these bills become law. Hopefully Congress will make QI permanent, thereby providing long-term security to hundreds of thousands of low-income people with Medicare.