Legislative Milestones in Medicaid Coverage of Premiums and Cost Sharing for Low-Income Medicare Beneficiaries

Year Statute
1965 Medicare was enacted as Title XVIII and Medicaid was enacted as Title XIX of the Social Security Act of 1965 (P.L. 89-97). For low-income individuals entitled to both Medicare and Medicaid, the statute provided for Medicaid payment of Medicare Part B premiums as well as Medicare Part A and Part B deductibles and other cost sharing. However, it only allowed states to receive federal matching payments for Part B premiums paid on behalf of individuals receiving cash assistance through certain means-tested programs.
1967 The Social Security Amendments of 1967 (P.L. 90-248) prohibited federal financial participation (i.e. federal Medicaid matching funds) for Medicaid services that could have been paid for by Medicare Part B if an individual had been enrolled.
1986 The Omnibus Budget Reconciliation Act of 1986 (P.L. 99-509) created the Qualified Medicare Beneficiary (QMB) program as a state option. This was the first of the programs now commonly referred to as the Medicare Savings Programs (MSPs).
1988 The Medicare Catastrophic Coverage Act of 1988 (MCCA, P.L. 100-360) contained provisions that required states to cover QMBs but limited Medicaid benefits to Medicare premiums and cost sharing. Most of the MCCA was repealed in 1989, but the MSP requirements for QMB coverage remained in law.
1989 The Omnibus Budget Reconciliation Act of 1989 (P.L. 101-239) created a second MSP, the Qualified Disabled and Working Individuals (QDWI) program and prohibited providers from billing QMB beneficiaries for any amount that exceeds the Medicare rate.
1990 The Omnibus Budget Reconciliation Act of 1990 (P.L. 101-508) established a third MSP, the Specified Low-Income Medicare Beneficiary (SLMB) program.
1997 The Balanced Budget Act of 1997 (BBA, P.L. 105-33) created the Qualified Individuals (QI) program; provided states the option to pay the lesser of (1) the full amount of Medicare deductibles and coinsurance or (2) the amount, if any, by which Medicaid’s rate for a service exceeds the amount already paid by Medicare. The BBA also specified that providers cannot bill beneficiaries for the difference between the Medicaid payment and the full Medicare cost-sharing amount when Medicaid pays less than the full amount of Medicare cost sharing.
2003 The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA, P.L. 108-173) established the Medicare Part D program and the Part D low-income subsidy (LIS) program. The MMA also required higher income Medicare beneficiaries to pay a higher percentage of the Part B premium.
2008 The Medicare Improvements for Patients and Providers Act of 2008 (P.L. 110-275) increased the federal asset limits for MSPs (which had previously been frozen at $4,000 for an individual and $6,000 for couples) to the same level as the full Part D LIS asset limits and indexed to inflation thereafter. It also required the Social Security Administration to transfer information from an LIS application to the state Medicaid agency, requiring the agency to use the information to initiate an MSP enrollment application.
2010 The Patient Protection and Affordable Care Act (ACA, P.L. 111-142, as amended) eliminated Part D cost sharing for full-benefit dually eligible beneficiaries receiving home and community based services who would otherwise require institutional care (beneficiaries residing in institutional settings already had no cost sharing). The ACA also prohibited Medicare Advantage plans and their providers from directly charging dual eligible for Medicare Part A and Part B cost sharing.
2015 The Medicare Access and CHIP Reauthorization Act (P.L. 114-10) permanently extended the QI program.

Source: MACPAC analysis as of March 2016.