A Medicare Savings Program — commonly called an MSP — is a state-administered program that helps low income Medicare beneficiaries pay for Medicare premiums, deductibles, copays, and coinsurance. Medicare Savings Programs are funded jointly by the federal government and states and are administered through state Medicaid agencies.
Millions of Medicare beneficiaries who qualify for Medicare Savings Programs are not enrolled in them — often because they are unaware the programs exist or believe they will not qualify. Understanding what Medicare Savings Programs are available, who qualifies, and how to apply can help eligible beneficiaries significantly reduce their healthcare costs.
Types of Medicare Savings Programs
There are four types of Medicare Savings Programs each providing a different level of assistance:
- Qualified Medicare Beneficiary — QMB — the most comprehensive Medicare Savings Program. QMB pays the Medicare Part A and Part B premiums, deductibles, copays, and coinsurance for eligible beneficiaries. Providers who accept Medicare are prohibited from billing QMB beneficiaries for Medicare cost sharing amounts. This means QMB beneficiaries generally pay nothing out of pocket for Medicare-covered services.
- Specified Low-Income Medicare Beneficiary — SLMB — pays the Medicare Part B premium for eligible beneficiaries. Does not cover deductibles or cost sharing.
- Qualifying Individual — QI — similar to SLMB and pays the Medicare Part B premium. QI has limited funding and is available on a first-come first-served basis. Applications must be renewed annually.
- Qualified Disabled and Working Individuals — QDWI — pays the Medicare Part A premium for certain disabled individuals who are working and have lost premium-free Part A coverage. This program has very limited enrollment.
Medicare Savings Programs and Extra Help
People who qualify for a Medicare Savings Program are generally automatically enrolled in the Low Income Subsidy — also called Extra Help — for Medicare Part D prescription drug coverage. Extra Help pays most of the costs of Medicare Part D including premiums, deductibles, and copays making prescription drugs significantly more affordable.
This automatic enrollment in Extra Help is one of the most valuable benefits of qualifying for a Medicare Savings Program because prescription drug costs can be a major financial burden for low income Medicare beneficiaries.
Who qualifies for Medicare Savings Programs
Eligibility for Medicare Savings Programs is based on income and assets. The income and asset limits vary by program and are updated annually. General eligibility guidelines for 2024 include:
- QMB — monthly income up to approximately $1,235 for an individual or $1,663 for a couple. Asset limits apply but many states have eliminated asset tests for Medicare Savings Programs.
- SLMB — monthly income up to approximately $1,478 for an individual or $1,992 for a couple.
- QI — monthly income up to approximately $1,660 for an individual or $2,239 for a couple.
These are approximate figures — actual limits vary by state and are adjusted annually. Many states have higher income limits than the federal minimums and some states have eliminated asset tests entirely making it easier to qualify.
Not all income is counted when determining eligibility. Common income exclusions include the first $20 of most income per month, earned income exclusions, and certain other types of income.
How to apply for a Medicare Savings Program
Applications for Medicare Savings Programs are submitted through your state’s Medicaid agency. Ways to apply include:
- Contact your state Medicaid agency — find contact information at medicaid.gov or by calling your state’s Medicaid office directly
- Visit your local Social Security office — Social Security can screen you for Medicare Savings Program eligibility and help you apply
- Contact your State Health Insurance Assistance Program — SHIP — SHIP counselors can help you determine whether you qualify and assist with the application process. Find your state’s SHIP at shiphelp.org.
- Apply through Medicare — call 1-800-MEDICARE to get information about Medicare Savings Programs and how to apply in your state
What you need to apply
When applying for a Medicare Savings Program you will typically need to provide:
- Proof of Medicare enrollment such as your Medicare card
- Proof of identity and age such as a birth certificate or driver’s license
- Proof of residency
- Documentation of income including Social Security award letters, pension statements, and other income documentation
- Documentation of assets including bank statements and financial account information in states that still have asset tests
Why so many eligible people are not enrolled
Despite the significant financial benefits of Medicare Savings Programs millions of eligible beneficiaries are not enrolled. Common reasons include:
- Lack of awareness — many people do not know these programs exist
- Belief that they will not qualify — some people assume their income or assets are too high when they may actually qualify
- Concerns about stigma associated with applying for government assistance
- Complexity of the application process
- Difficulty navigating the enrollment system
If you or a loved one has Medicare and limited income it is worth taking the time to find out whether you qualify for a Medicare Savings Program. The potential savings can be substantial — thousands of dollars per year in some cases.
How Medicare Savings Programs interact with other benefits
Medicare Savings Programs interact with several other benefit programs:
- Medicaid — people who qualify for full Medicaid are typically automatically enrolled in the QMB program. The reverse is not always true — QMB enrollment does not automatically confer full Medicaid eligibility.
- Extra Help — Low Income Subsidy — as noted above Medicare Savings Program enrollees are generally automatically enrolled in Extra Help for Part D prescription drug coverage
- Social Security — Medicare Part B premiums are typically deducted from Social Security benefits. When a Medicare Savings Program pays the Part B premium Social Security benefits increase by the amount of the premium that is no longer deducted.
Key terms to know
- Medicare Savings Program — MSP — a state program that helps low income Medicare beneficiaries pay Medicare premiums and cost sharing
- Qualified Medicare Beneficiary — QMB — the most comprehensive Medicare Savings Program covering premiums deductibles and cost sharing
- Specified Low-Income Medicare Beneficiary — SLMB — a Medicare Savings Program that pays the Part B premium
- Qualifying Individual — QI — a Medicare Savings Program that pays the Part B premium with limited funding available
- Extra Help — Low Income Subsidy — a federal program that helps low income Medicare beneficiaries pay Part D prescription drug costs
- State Health Insurance Assistance Program — SHIP — a federally funded program providing free Medicare counseling
- Asset test — an eligibility requirement based on the value of a person’s assets
Sources
- Medicare.gov — Medicare Savings Programs
- Centers for Medicare and Medicaid Services
- Social Security Administration — ssa.gov
- State Health Insurance Assistance Program — shiphelp.org
This article is for general informational purposes only and does not constitute legal or financial advice. Medicare Savings Program eligibility and benefits vary by state and are subject to change annually. Contact your state Medicaid agency or call 1-800-MEDICARE for the most current information specific to your situation.