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As a Medicare beneficiary, where you live – meaning your state of residence – can have a significant impact on the care that you receive and how you pay for that care during your “golden years.” This page explains how Vermont’s regulations and policies are likely to affect your bottom line.
Many Medicare beneficiaries who struggle to afford the cost of Medicare coverage are eligible for help through a Medicare Savings Program (MSP). In Vermont, these programs pay for Medicare Part B premiums, Medicare Part A and B cost-sharing, and – in some cases – Part A premiums.
MSP asset limits: There are no asset limits for QMB, SLMB or QI in Vermont. The asset limit for QDWI is $4,000 for applicants who live alone and $6,000 for those living with others.
Medicare covers a great number services – including hospitalization, physician services, and prescription drugs, but the program can leave its enrollees with large out-of-pocket expenses. Furthermore, Original Medicare doesn’t cover important services like vision and dental care.
Some beneficiaries – those whose incomes make them eligible for Medicaid – can receive coverage for Medicare cost sharing and dental and vision services if they’re enrolled in Medicaid for the aged, blind and disabled.
This program is called Medicaid for the Aged, Blind and Disabled (MABD) in Vermont
MABD doesn’t ordinarily cover Long Term Services and Supports (LTSS). Applicants usually have to apply for those services separately, undergo an evaluation, and meet a different income limit.
Income eligibility: The income limit – for both single and married applicants – is $1,175 a month in Chittenden County and $1,091 a month outside Chittenden County.
Asset limits: The asset limit is $2,000 if single and $3,000 if married.
The Supplemental Security Income (SSI) program provides another way to qualify for Medicaid in Vermont, because its enrollees automatically receive Medicaid (and the MSP). SSI is a federal income assistance program that has a monthly income limit equal to $783 for singles and $1175 for spouses, who usually receive cash payments increasing their income up to those limits. This program has the same asset limits as Medicaid in Vermont.
The SSI income limit for a married couple is somewhat higher than the Medicaid eligibility limit outside of Chittenden County, which means couples could use SSI to qualify for Medicaid when they wouldn’t otherwise be eligible.
Income limits for couples living in Chittenden county are the same for SSI and Medicaid, and the SSI income limit for single applicants is more restrictive than Medicaid limits throughout the state.
Applicants with incomes too high to qualify for Medicaid benefits for the aged, blind and disabled (MABD) can enroll the Medicaid spend-down in Vermont, which medical expenses to be subtracted from the income that is counted toward the Medicaid eligibility limit.
Vermont approves spend-down benefits for specific periods of time, with additional coverage requiring new medical expenses to be submitted. This spend-down “budget period” lasts one-month for long-term care – and six-months for MABD benefits.
Enrollees must satisfy the asset test that applies to other MABD enrollees.
The Medicaid spend-down in Vermont covers LTSS.
Income eligibility: The income limit – for both single and married applicants – is $1,175 a month in Chittenden County and $1,091 a month outside Chittenden County.
Asset limits: The asset limit is $2,000 if single and $3,000 if married.
The State Pharmaceutical Assistance Program (SPAP) in Vermont – called VPharm – provides additional drug coverage for Medicare Part D enrollees.
VPharm significantly lowers the co-pays for drugs covered by Part D – to between $1 and $2 each. This program also pays a portion of an enrollee’s monthly Part D premium.
This program charges an income-based premium – of up to $50 a month.
SPAP enrollees receive a once-yearly special enrollment period (SEP) to change Part D or Medicare Advantage Prescription Drug plans.
Income limit: The income limit is $2,393 a month if single and $3,233 a month if married.
Asset limit: This program doesn’t have an asset limit.
This application form can be used to apply for VPharm (or for a different prescription drug assistance program – Healthy Vermonters – which has a somewhat higher income limit).
The Vermont Legal Aid website has additional information about prescription drug assistance.
Medicare beneficiaries who receive Medicaid, an MSP, or Supplemental Security Income (SSI) also receive Extra Help – a federal program that dramatically lowers an enrollee’s prescription drug costs under Medicare Part D. Individuals can also apply for Extra Help through the Social Security Administration if they don’t receive it automatically. The income limit is $1,615 a month for single applicants and $2,175 a month for spouses, and the asset limit is $14,610 for individuals or $29,160 for married couples.
Medicare beneficiaries increasingly rely on long-term services and supports (LTSS) – or long-term care – which is for the most part not covered by Medicare. Twenty percent of Medicare beneficiaries who were living at home received some assistance with LTSS in 2015 – and even more beneficiaries will need LTSS as the population continues to age. Medicaid fills this gap in Medicare coverage for long-term care, but its complex eligibility rules can make qualifying for benefits difficult. What’s more – eligibility rules vary significantly from state to state.
Long-Term Care Medicaid is called Choices for Care in Vermont.
Income limits: The income limit is $2,349 a month if single and $4,698 a month if married (and both spouses are applying).
When only one spouse needs Medicaid, the income limit for single applicants is used – and only the applicant’s income is counted.
However, this income limit doesn’t mean an applicant can keep all of this income up to the limit. Nursing home enrollees must pay nearly their entire income toward their care, other than a $72.66 personal needs allowance – or $145.33 for a couple – and the cost of health insurance premiums (such as Medicare Part B and Medigap).
Assets limits: The asset limit is $2,000 per applicant. If only one spouse needs Medicaid, spousal impoverishment rules allow the other spouse to keep up to $126,800.
Certain assets are never counted, including many household effects, family heirlooms, certain prepaid burial arrangements, and one car. Enrollees aren’t allowed to have more than $595,000 in home equity.
Every state’s Medicaid program covers community-based LTSS services. These services are called Home and Community-Based Waiver (HCBS) services because recipients continue living in the community, rather than entering a nursing home.
Income limits: The income limit is $2,349 a month if single and $4,698 a month if married (and both spouses are applying).
However, this income limit doesn’t mean applicants can keep all of their income up to this limit once they begin receiving services. Vermont HCBS recipients are allowed a $1,175 per month community maintanence allowance, but nearly all their other income must be paid toward their care.
When only one spouse needs Medicaid, the income limit for single applicants is used – and only the applicant’s income is counted.
Assets limits: The asset limit is $2,000 per applicant. If only one spouse needs Medicaid, spousal impoverishment rules allow the other spouse to keep up to $126,800.
HCBS recipients can’t have more than $595,000 in home equity.
Eligibility rules for Medicaid LTSS programs differ from other Medicaid benefits when only one spouse is applying. When this occurs, only the applying spouse’s income is counted. (Normally with Medicaid benefits, the income of both spouses is counted – regardless of who is applying.)
Spousal impoverishment rules allow community spouses of Medicaid LTSS recipients to keep a Minimum Monthly Maintenance Needs Allowance (MMMNA) from their Medicaid spouse’s monthly income.
In Vermont in 2020, these spousal impoverishment rules allow community spouses to keep:
Federal law requires states to limit eligibility for Medicaid nursing home and HCBS to applicants with a home equity interest below a specific dollar amount. In 2020, states set this home equity level based on a federal minimum of $595,000 and maximum of $893,000.
Vermont uses the federal minimum home equity limit – meaning applicants with more than $595,000 in home equity are ineligible for LTSS programs.
Because long-term care is expensive, individuals can have an incentive to give away or transfer assets to make themselves eligible for Medicaid LTSS. To curb these asset transfers, federal law requires states to institute a penalty period for Medicaid nursing home applicants who give away or transfer assets for less than their value. States can also have a penalty period for community-based LTSS.
Vermont has an asset transfer penalty for both nursing home care and HCBS. The state uses a 60-month lookback period to calculate this asset transfer penalty – meaning that asset transfers or gifts made during this period may result in ineligibility. This penalty is calculated by dividing the value of asset transfers and gifts by the monthly cost of nursing home care (about $9,595 in Vermont in 2020).
A state’s Medicaid agency is required to recover what it paid for LTSS and related medical costs while a enrollee was 55 or older. The law allows states to also pursue estate recovery against beneficiaries who did not receive LTSS, and beneficiaries who were under 55 and permanently institutionalized.
Vermont has chosen to only recover from the estates of enrollees who receive LTSS when they were 55 or older. This means the Medicaid expansion population in Vermont is not subject to Medicaid estate recovery, even for the Medicaid coverage they receive from 55 to 64 years of age, unless they also need LTSS during that time.
In states where private Medicaid managed care organizations (health insurance companies) provide coverage, Medicaid estate recovery involves the state recovering the amount it paid the insurer for the beneficiary’s coverage. But Vermont does not use private Medicaid managed care organizations.
Vermont will grant an exemption to estate recovery in cases where recovering from an estate would cause undue hardship, or when the estate consists only of personal property valued at less than $2,000.
Congress exempted Medicare premiums and cost sharing from Medicaid estate recovery starting with benefits paid after December 31, 2009, but Medicaid may recover benefits paid until this date.
Free volunteer Medicare counseling is available by contacting the State Health Insurance Program (SHIP) at 800-642-5119. This federal government sponsored program is offered through Area Agencies on Aging (AAAs) in Vermont.
The SHIP can help beneficiaries enroll in Medicare, compare and change Medicare Advantage and Part D plans, and answer questions about state Medigap protections. Counselors may also be able to provide referrals for home care agencies or long-term care services. This website has a list of AAAs in Vermont.
Elder law attorneys can help individuals plan for Medicaid long-term care benefits. You can use this search feature from the National Academy of Elder Law Attorneys (NAELA) to find an elder attorney locally.
Vermont’s Medicaid program is administered by the Department of Vermont Health Access (DVHA). You can apply online for Medicaid, the MSP, VPharm and Healthy Vermonters. This website contains a downloadable application for those programs.
A shorter application that does not ask about assets – available here – can be used when applying only for the MSP, VPharm and/or Healthy Vermonters. This is the application for Medicaid LTSS coverage (Vermont Choices for Care).
An in-person interview is always required when applying for long-term care benefits, and some states also require one for Medicaid ABD. However, interviews are no longer required for the MSP.
Josh Schultz has a strong background in Medicare and the Affordable Care Act. He coordinated a Medicare ombudsman contract at the Medicare Rights Center in New York City, and represented clients in extensive Medicare claims and appeals. In addition to non-profit work, Josh helped implement federal and state health insurance exchanges at the technology firm hCentive. He has held consulting roles, including at Sachs Policy Group, where he worked on Medicare and Medicaid related client projects.
