What Is The Medicare Safety Net Threshold?

Medicare, a government-sanctioned health insurance program for seniors 65 years old and older, is an important fixture on the social insurance scene. Many seniors have low income levels and few financial assets, so ensuring quality health care for seniors isn’t always easy since strong health care usually doesn’t come cheaply.

Not everyone is aware of Medicare’s many benefits, components and eligibility requirements, and questions – especially during the ever-fluctuating health insurance climate in the United States – continue to abound. One such question that is often posed is “What Is The Medicare Safety Net Threshold?”

To fully understand the purpose of Medicare’s safety net, we should first take a look at Medicare’s basic structure, and how it’s subsidized.

How Is Medicare Paid For?

Simply put, we the people pay for Medicare. All employees in the United States are required to have 2.94% of their FICA federal tax withheld to subsidize Medicare – an employee has 50% of that 2.94% taken out of their pay, and his / her employer matches that contribution.

In the event that a prospective Medicare recipient, in the past five years, hadn’t worked or otherwise contributed to the U.S. workforce and had FICA tax taken out of his / her pay, then in order for the recipient to be eligible to receive Medicare benefits, he / she would need to pay a monthly premium in order to become enrolled and stay in the program.

What Is The Medicare Safety Net Threshold?

The general purpose of the Medicare Safety Net is to provide families and individuals with financial assistance for those high, out of pocket costs for medical, out-of-hospital MBS (Medicare Benefits Schedule) services.

The threshold is reached by calculating a recipient’s gap amounts, which is the difference between the Medicare benefit and the schedule fee set by the government. Once your gap amount reaches a threshold, Medicare benefits increase to 100% of the schedule fee for any subsequent out-of-hospital services.

Know that once a threshold is met, a recipient may be eligible for more benefits related to MBS services for the rest of the calendar year.

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