A friend forwarded me an ad he saw online. The headline read, “Seniors over 65 are getting huge benefits this year. See if you qualify for $144 a month.” How can I get this? he wondered.
Another friend asked whether I saw the commercials for the Medicare giveback benefit of up to $144. How could I miss them? I replied.
Let’s tackle some questions about the Medicare giveback benefit.
What is the giveback benefit?
The giveback benefit is officially the Part B premium reduction.
This benefit is making a big splash this year, but it first appeared in 2003. A Federal regulation allowed Medicare+Choice plans (Medicare Advantage’s predecessor) to receive a reduction in its payments, which in turn helps to fund the giveback.
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How do I qualify for the giveback?
The first time I heard about this offer, I wondered whether there might be income-related criteria. In other words, did the person’s income have to be below a certain level? But that is not the case. To qualify for a premium reduction, you must:
- Be a Medicare beneficiary enrolled in Part A and Part B,
- Be responsible for paying the Part B premium, and
- Live in a service area of a plan that has chosen to participate in this program.
How many plans provide this benefit?
That’s a good question. You qualify once you enroll in a plan but there are not that many plans participating.
I checked Advantage plans in one ZIP code in each of three cities—Fort Lauderdale, Chicago and Los Angeles. Of the 146 plans in those three ZIP codes, there are 23 HMO (health maintenance organization) plans and two PPO (preferred provider organization) plans that offer premium reduction; that’s 25 plans out of 146. A few of these plans do not include prescription drug coverage.
Some Special Needs Plans (SNP) also offer this benefit. But, in these cases, the beneficiary may not qualify. For example, there is a SNP for those residing in nursing homes. It’s possible those who choose this plan may be getting assistance with premiums from the State Medicaid program.
Can I get the premium reduction with other benefits?
In one commercial, a woman proclaims, “I called the [ad sponsor] to get dental, transportation, meals and the giveback benefit. They were very helpful.” Note that she didn’t say she got all four benefits because that could be difficult. Of the 25 plans with premium reduction, only three also offered dental with some transportation and meals, 11 offered dental but no transportation or meals, eight had dental and some transportation or meals, and two offered only the giveback with none of the other benefits she wanted.
And remember, additional benefits the plan chooses to provide can come with limits, such as up to 12 meals per discharge for three qualified hospital stays in a year.
Does the plan send me a check?
There are no direct payments to beneficiaries. This is a reduction in the Part B premium you must pay. For example, if a beneficiary is on Social Security, the Part B premium comes out of the monthly benefit before it hits the individual’s bank account. The reduction in the plan’s payment reduces that premium, which means more money in the individual’s bank account.
Can I really get $144 back?
The plan determines the amount. In the 25 plans I checked, the givebacks ranged from $25 to $144. Specifically, six plans offered a $25-$50 reduction, 15 plans had a $51-$100 reduction, and four gave back over $100 with only two plans (both in Florida) offering $144.
How do I find plans that offer this benefit?
The football player and other narrators in commercials say you should call the number on the screen to see whether you qualify. If you meet the criteria noted above, you qualify; you don’t need to make that call. However, if you call (as noted in the commercial’s small print), your call will be transferred to a licensed insurance agent who may or may not sell plans in your area. And, if there is no plan in your area, you may hear about other plans that are available to you.
The best place to start is the Medicare Plan Finder. If a plan offers the Part B premium reduction, you’ll see that noted on the details page. Finding the exact amount of the reduction likely will require digging into plan documents or calling the plan.
Any words of wisdom?
Do not let premium reduction be the driving force in your decision. There are many important factors to consider when choosing a Medicare Advantage plan.
- Does the plan cover your medications?
- Are your pharmacies and physicians in the plan’s network?
- Does the plan have acceptable star ratings?
- Will the plan be cost effective?
- What other benefits does the plan provide that are important to you, such as prescription drug coverage, dental and vision?
Once you’ve found a plan that meets your important criteria, and it also offers a reduction in the Part B premium, that’s great. However, saving $25 or $100 a month when you have to change doctors or pay more for something else is probably not worth it.