Medicare Savings Programs (MSP) are plans that can help people with limited income or assets pay for their Medicare costs. They are sometimes called Medicare Premium Payment Programs or Medicare Buy-In Programs.
There are four types of Medicare Savings Programs, though specific program names may be slightly different in some states:
- Qualified Medicare Beneficiary (QMB) Program
- Specified Low-Income Medicare Beneficiary (SLMB) Program
- Qualifying Individual (QI) Program
- Qualified Disabled and Working Individuals (QDWI) Program
These plans can help with Medicare premiums and other out-of-pocket costs, such as deductibles, copayments, and coinsurance.
Individuals need to have or be eligible for Medicare Part A to participate in a Medicare Savings Program. They also must be within asset and income limits, which vary by state, though many states follow federal guidelines. Contact your state’s Medicaid program to determine your eligibility.
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How Do Medicare Savings Programs Work?
Medicare Savings Programs are federally funded plans administered by each state’s Medicaid program to help eligible individuals afford their Medicare coverage. To better understand how the Medicare Savings Program works, it is critical to first understand the differences between Medicaid and Medicare:
- Medicaid: Medicaid is a state and federal-run health insurance program for people with limited income or resources, and eligibility criteria is typically based on income and household size. Its goal is to help people afford different medical services, such as doctor visits, inpatient and outpatient hospital services, and X-rays.
- Medicare: Medicare is a federal health insurance program for individuals regardless of income. To be eligible for Medicare, you need to be 65 years of age or older or have a qualifying disability, such as End Stage Renal Disease or Amyotrophic Lateral Sclerosis.
Though Medicare and Medicaid are two separate programs, Medicare Savings Programs work with both to offer low-income individuals more affordable healthcare.
The Costs of Medicare and How Medicare Savings Programs Can Help
Medicare savings plans can help reduce certain expenses that come with Medicare, including:
- Premiums: A premium is an amount you need to pay for a healthcare insurance policy. Many people do not have to pay a premium for Part A since they paid Medicare taxes while working. Those who may not be eligible for premium-free Part A may have to pay up to $505 monthly, depending on how long they or their spouse worked and paid Medicare taxes. The standard Part B premium is currently $174.70 per month, though it may be higher based on income. Part C and Part D premiums vary, as these plans are offered by private insurers.
- Deductibles: A deductible is the amount a person must pay before their insurance policy pays. For Medicare Part A, the deductible is $1,632 in 2024 for each time you’re admitted to the hospital. For Medicare Part B, the annual deductible is $240.
- Copays: A copay is a set amount you pay each time you seek a specific service, such as a doctor visit or a prescription refill. Original Medicare typically does not have copays. However, Part D plans may have a copay of around $55.50 per month in 2024, which MSPs can help with.
- Coinsurance: Coinsurance is the percentage of costs for a specific covered healthcare service the individual pays after the deductible. With Medicare Part B, the enrolled individual usually pays 20% of the bill, while Medicare covers the other 80%.
What Do Medicare Savings Programs Cover?
Coverage | QMB Program | SLMB Program | QI Program | QDWI Program |
|---|---|---|---|---|
Part A premium | Yes | No | No | No |
Part B premium | Yes | Yes | Yes | Yes |
Cost-sharing, such as deductibles, copays, and coinsurance | Yes | Depends on state | No | No |
Original Medicare comes in two parts: Part A and Part B. Medicare Savings Programs, depending on the specific plan, may help pay for Part A or Part B costs, or both. For example, the Qualified Medicare Beneficiary Program may pay all or some of the premium for both Parts A and B. Even if the covered individual receives a bill, they can usually dispute it.
Another thing to keep in mind is that if you are eligible for certain Medicare Savings Programs, you may also automatically be eligible for the federal program known as Extra Help. This program could help pay for the out-of-pocket costs of Medicare Part D (prescription drug coverage), including its premium.
Medicare Savings Program Eligibility Criteria
Criteria | QMB Program | SLMB Program | QI Program | QDWI Program |
|---|---|---|---|---|
Individual income limit | $1,235 per month | $1,478 per month | $1,660 per month | $4,945 per month |
Individual resource limit | $9,090 | $9,090 | $9,090 | $4,000 |
Married couple income limit | $1,663 per month | $1,992 per month | $2,239 per month | $6,659 per month |
Married couple resource limit | $13,630 | $13,630 | $13,630 | $6,000 |
Additional criteria | None | Must have Medicare Part A | Must have Medicare Part A coverage, must not qualify for Medicaid | Have a disability, are working, and have lost Social Security disability benefits and premium-free Medicare Part A because you have returned to work |
Eligibility for a Medicare Savings Program primarily depends on your income and assets or resources. Most states follow the same basic limits, but some states have their own guidelines. These eligibility criteria can change each year and take effect on January 1. For example, the current baseline eligibility criteria for the Qualified Medicare Beneficiary Program are:
- Monthly income: $1,235 for individuals or $1,663 for couples
- Total assets: $9,090 for individuals or $13,630 for couples
However, states exclude certain forms of income or assets when determining eligibility so some people may still be eligible for a Medicare Savings Program even if they exceed the standard limits.
Income that’s not typically counted as part of the eligibility criteria includes:
- The first $65 of a person’s monthly wages
- The first $20 of a person’s monthly income
- 50% of a person’s monthly wages (after deducting $65)
- Income from the Supplemental Nutrition Assistance Program (SNAP)
Assets that are not typically counted as part of the eligibility criteria include:
- Primary place of residence
- Primary vehicle (single vehicle)
- Household items and wedding rings
- Life insurance accounts with less than $1,500
- Up to $1,500 in burial funds per person
However, certain assets, such as cash in bank accounts, stocks and bonds, and other properties, are usually counted.
Medicare Savings Programs may also reduce the costs of Medicare Advantage premiums, otherwise known as Medicare Part C. However, those with a Medicare Advantage plan are not eligible for Extra Help benefits.
Qualified Medicare Beneficiary (QMB) Program
The Qualified Medicare Beneficiary Program is intended to help people with limited income pay for their Part A and B premiums, deductibles, and copayments. By federal law, people enrolled in this program cannot be billed for services that Medicare covers, other than prescription drug costs. If an enrolled individual has paid for something Medicare would have usually have covered, they can request reimbursement. Those enrolled in this program typically need to reapply each year with up-to-date financial information.
Specified Low-income Medicare Beneficiary (SLMB) Program
The Specified Low-income Medicare Beneficiary Program is intended for low-income individuals with Medicare Part A who need help paying their Part B premiums. This program only assists with Medicare Part B premiums. Applications must be submitted every year to continue in the SLMB program.
Qualifying Individual (QI) Program
Similar to the SLMB program, the Qualifying Individual Program helps those who fall below the federal poverty guidelines pay for their Medicare Part B premiums. People covered by Medicaid cannot receive QI benefits. Applications must be submitted annually to maintain benefits, but those who had benefits the previous year receive more priority than first-time applicants.
Qualified Disabled and Working Individuals (QDWI) Program
The Qualified Disabled and Working Individuals Program helps pay for Medicare Part A premiums. Those enrolled in this program cannot receive Extra Help benefits. To be eligible for the QDWI plan, you should not be receiving any other medical help from your state. You may also need to meet at least one of the following criteria:
- Be actively employed, under the age of 65, and with a qualifying disability
- Have lost your premium-free Part A due to returning to work
The income limits for this program are a little higher for this program, while the resource limits are lower. As of 2023, the limits are:
- $4,945 individual monthly income limit; or $6,659 married couple monthly income limit
- $4,000 individual resource limit; or $6,000 married couple resource limit
Applications must be submitted each year to maintain benefits.
How to Apply for a Medicare Savings Program
Before applying for a Medicare Savings Program, ask yourself:
- Is your income for the current year at or below the income limits listed for the program you’re applying for?
- Are you currently enrolled in or are you eligible for Medicare Part A?
- Do you have limited resources — money in the bank, stocks or bonds, etc. — that are below the program’s limits?
If the answer to these questions is yes, reach out to your State Medicaid Program and ask them about the specific eligibility requirements for your state’s MSPs. Then, fill out an online application or apply by phone. Information that may be required includes:
- Medicare card
- Social Security card
- Proof of identity (ex. passport or birth certificate)
- Proof of address (ex. recent utility bill)
- Proof of income (ex. recent federal tax return or pay stub)
- Asset information (ex. bank statements, life insurance policies, or stock certificates)
Most people are either denied or approved within 45 days of applying. If denied, you may request a fair hearing to try to reach a different decision. If approved, the benefits typicallykick in the following month after approval.
Putting It All Together
Remember that you may need to reapply for your Medicare Savings Program every year, and will likely receive a mailed notice that it’s time to apply again to maintain your benefits.
If you do not receive a notice, contact your local Medicaid office for help. Check your state’s specific income and resource limits to help determine your eligibility for a Medicare Savings Program.