DEPARTMENT OF HEALTH & HUMAN SERVICES 
Centers for Medicare & Medicaid Services  
 Center for Medicaid and State Operations 
7500 Security Boulevard 
Baltimore, MD 21244-1850 
February 3, 1998   
Dear State Medicaid Director:   
This letter is one of a series that provides guidance on the implementation of the Balanced Budget Act. The 
purpose of this letter is to provide information concerning the payment of Medicare Part B premiums for the 
two new mandatory eligibility groups of  low-income Medicare beneficiaries called Qualifying Individuals or 
QIs. A previous letter on this topic was released on December 15, 1997.   
We are pleased to advise that States will have administrative flexibility with regard to the payment method for 
the QI-2 benefit. In the case of QI-2s, with income at least 135%, but less than 175% of the poverty level, the 
benefit in 1998 is equivalent to $1.07 per month. The benefit may be paid directly to the eligible QI-2, 
prospectively or retroactively, on a monthly, quarterly, or annual basis. We hope that this payment flexibility 
makes it easier to administer this important new benefit. As we indicated in our previous letter, States will be 
able to pay the full Medicare Part B premium using the State buy-in process for QI-1s.   
The FY 1998 State allocation table was published in the Federal Register on January 26, 1998, and a copy of it 
is enclosed. Also enclosed is a chart indicating the specific income limits to be used, based on the percentages 
of poverty that are applicable for each of the  Medicare low-income beneficiary groups, until the new Federal 
Poverty Levels are  published by the Department of Health and Human Services in the Federal Register in the  
spring.   
We want to help assure this new benefit is utilized to its maximum potential for these very vulnerable 
individuals. We will continue to work with States, the various technical advisory groups and representatives of 
the beneficiary community to accomplish this goal both for this year and in the future. And, to this end, we 
encourage you to consider using simplified application forms for this program, allowing individuals to apply for 
benefits without making a trip to the Medicaid office and, working with representatives of the beneficiary 
community to reach out to the general public about this program.   
If you have any questions about this provision or the contents of this letter, please contact Robert Nakielny of 
my staff at (410) 786-4466.   
Sincerely, 
/s/ 
Sally K. Richardson Director  
Center for Medicaid and State Operations   
 
Enclosures (2)   
 cc:  All HCFA Regional Administrators   
  
All HCFA Associate Regional Administrators for Medicaid and State Operations   
Lee Partridge - American Public Welfare Association Joy Wilson - National 
Conference of State Legislatures Jennifer Baxendell - National Governors' 
Association HCFA Press Office    Estimated State Allotments for Medicaid Payment of Medicare Part B Premiums   
State FY98 (a) (b)(c) State Share Allocation   
State M11 M22 [2 x (a)] + (b) of (c) (in thousands)  
 
AK  0  2  2  .03%  $63 
AL  36  65  137  2.14%  4,283 
AR  21  37  79  1.23%  2,470 
AZ  18  50  86  1.34%  2,688 
CA  99  311  509  7.96%  15,911 
CO  13  33  59  0.92%  1,844 
CT  13  65  91  1.42%  2,845 
DC  2  3  7  0.11%  219 
DE  4  9  17  0.27%  531 
FL  89  270  448  7.00%  14,004 
GA  42  102  186  2.91%  5,814 
HI  4  9  17  0.27%  531 
IA  15  49  79  1.23%  2,470 
ID  4  15  23  0.36%  719 
IL  75  167  317  4.95%  9,909 
IN  25  92  142  2.22%  4,439 
KS  13  41  67  1.05%  2,094 
KY  18  91  127  1.98%  3,970 
LA  27  56  110  1.72%  3,439 
MA    37  83  157   2.45%    4,908  
MD    25  72  122   1.91%    3,814  
ME    7  27  41   0.64%    1,282  
MI   44  122  210   3.28%    6,565  
MN      18  55  91   1.42%    2,845  
MO    30  81  141   2.20%    4,408  
MS    26  42  94   1.47%    2,938  
MT      8  16  32   0.50%    1,000  
NC    58  110  226   3.53%    7,065  
ND   5  11  21   0.33%    656  
NE    10  26  46   0.72%    1,438  
NH    7  17  31   0.48%    969  
NJ   51  118  220   3.44%    6,877  
NM   10  29  49   0.77%    1,532  
NV   7  19  33   0.52%    1,032  
NY    92  271  455   7.11%    14,223  
OH      56  167  279   4.36%    8,721  
OK      26  47  99   1.55%    3,095  
OR      22  53  97   1.52%    3,032  
PA   82  213  377   5.89%    11,785   RI   7  18  32   0.50%    1,000  
SC   27  52    106   1.66%    3,314  
SD    5  9  19   0.30%    594  
TN    39  56  134   2.09%    4,189  
TX    78  221  377   5.89%    11,785  
UT    4  18  26   0.41%    813  
VA    19  81  119   1.86%    3,720  
VT   4  7  15   0.23%    469  
WA    9  67  85   1.33%    2,657  
WI    10  56  76   1.19%    2,376  
WV   19  39  77   1.20%    2,407  
WY    2  4  8   0.13%    250  
Total   1362  3674  6398   100.00%   200,000  
 
  
1.)  Three-year  average  of  number  (000)  of  Medicare  beneficiaries  in  State  who  are  not  enrolled  in 
Medicaid but whose incomes are at least 120 but less than 135 of Federal Poverty Line   
2.)  Three-year  average  of  number  (000)  of  Medicare  beneficiaries  in  State  who  are  not  enrolled  in 
Medicaid but whose incomes are at least 135 but less than 175 of Federal Poverty Line   
INCOME LIMITS BASED ON PERCENTAGE OF POVERTY  
QMB Monthly Income Limits using 1997 (100% + $20)*   
All States except Alaska and Hawaii: $ 678 - individual $ 905 - couple   
Alaska:  $ 843 - individual $1,126 - couple   
Hawaii:  $ 776 - individual $1,037 - couple   
SLMB Monthly Income Limits using 1997 (120% + $20)*   
All States except Alaska and Hawaii: $ 809 - individual $1,081 - couple   
Alaska:  $1,007 - individual $1,347 - couple   
Hawaii:  $ 927 - individual $1,240 - couple   
QI-1 Monthly Income Limits using 1997 (135% + $20)*   
All States except Alaska and Hawaii: $ 908 - individual $1,214 - couple   
Alaska:  $1,131 - individual $1,513 - couple   
Hawaii:  $1,041 - individual $1,393 - couple   
QI-2 Monthly Income Limits using 1997 (175% + $20)*   
All States except Alaska and Hawaii: $1,171 - individual $1,568 - couple   
Alaska:  $1,460 - individual $1,956 - couple   
Hawaii:  $1,343 - individual $1,800 - couple  
 * $20 = amount of the monthly SSI income disregard