Medicare savings programs help people with limited income and resources pay for some out-of-pocket costs associated with healthcare. If a person is working, they may qualify.
Medicare provides health insurance coverage to help people pay for healthcare services. However, Medicare does not cover all costs, and Medicare savings programs (MSPs) are designed to help pay some of those extra costs.
The federal government funds MSPs, but they are run by the Medicaid program, and enrollment requirements may vary between different states.
In this article, we discuss the four MSPs, eligibility, and enrollment. Finally, we look at the Extra Help program.
We may use a few terms in this piece that can be helpful to understand when selecting the best insurance plan:
- Deductible: This is an annual amount that a person must spend out of pocket within a certain time period before an insurer starts to fund their treatments.
- Coinsurance: This is a percentage of a treatment cost that a person will need to self-fund. For Medicare Part B, this comes to 20%.
- Copayment: This is a fixed dollar amount that an insured person pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Medicare savings programs assist people with low income levels.
The programs have tiered levels, based on an individual’s income. If a person’s income is too high for one program, then a different program with a higher income limit may suit them.
Each of the four programs has different benefits and eligibility requirements.
Qualified Medicare Beneficiary (QMB)
The QMB program pays for Medicare Part A and Part B premiums, along with cost-sharing expenses such as deductibles, coinsurance, and copays for people with limited resources and income.
Healthcare providers cannot bill an individual who receives QMB benefits, and Medicare pays the provider. However, a person may have a copay for Medicare Part D prescription drugs. The maximum amount in 2020 is $3.90.
Specified Low-Income Medicare Beneficiary (SLMB)
If an individual has an income above that allowed for the QMB program, they may qualify for the SLMB program.
The SLMB program helps people who are enrolled in Medicare Part A to pay for their Medicare Part B premiums. They must also have limited resources and income. The program does not help with any other costs, such as copays or deductibles.
Qualifying Individual (QI)
The QI program allows a higher income level than either the QMB or the SLMB programs. It covers the cost of Medicare Part B premiums for people who are enrolled in Medicare Part A and have limited resources and income.
Medicare allocates the benefits on a first-come-first-served basis. People must reapply annually, and a person who was in a program the previous year is given priority.
In addition, if an individual qualifies for Medicaid, they cannot get assistance from the QI program.
Qualified Disabled and Working Individuals (QDWI)
The QDWI program helps a person pay Medicare Part A premiums. Medicaid limits enrollment to individuals who meet the following criteria:
- is aged years, is working, and has a disability
- returned to work and lost the premium-free Part A
- is not getting state medical assistance
- meets the resources and income limits
Each MSP has different income and resource eligibility limits, which may also vary by state. Some states do not count certain assets when they decide if someone is eligible.
Medicaid uses the federal poverty level (FPL) to calculate the income limits, which increase each year. The resource limits also increase annually.
People should note that the income and asset requirements for the programs may change from year to year. Individuals should contact their state Medicaid agency for further information, as well as current income and asset limits.
To receive MSP benefits individuals must meet the following eligibility criteria:
- have or be eligible for Medicare Part A
- live in the state where they are applying for the QMB program
- have limited income, savings, and resources
Income limits
The table below shows the income limits for each of the four MSPs.
| MSP | Individual monthly income limit | Couple monthly income limit | % of FPL |
|---|---|---|---|
| QMB | $1,084 | $1,457 | 100% |
| SMLB | $1,296 | $1,744 | 120% |
| QI | $1,456 | $1,960 | 135% |
| QDWI | $4,339 | $5,833 | N/A |
For allprograms, the income limits in Hawaii and Alaska may be higher. A person who is working and gets an income may also qualify for the program.
Resource limits
For the QMB, SMLB, and QI programs, the resource limits is $7,860 for an individual and $11,800 for a married couple.
However, for the QDWI program, there are different resource limits of $4,000 for an individual and $6,000 for a married couple.
Resources counting towards the resources limit include money in bank accounts, stocks, and bonds.
Some resources do not count towards the limit, including:
- a primary home and vehicle
- furniture
- personal and household items
- a pre-paid burial plot
- a burial plan allowance of $1,500
Can I have an MSP and Medicaid?
Even though the state’s Medicaid agency administers the MSPs, they are separate programs.
A person can have the QMB or SLMB program and Medicaid.
However, someone cannot have either the QI or the QDWI programs and Medicaid.
To check if they are eligible for an MSP, a person can apply by contacting their state’s Medicaid office.
Individuals must complete an application form and provide supporting documentation to prove their eligibility.
Generally, processing an application may take 45 days, and a person can appeal if Medicaid denies their application.
When an individual qualifies for the QMB, SLMB, or QI program, they automatically qualify for the Extra Help prescription drug program. This program assists with out-of-pocket expenses for prescription medications, including premiums, deductibles, and other prescription drug costs.
People with Extra Help may still have a copay for prescriptions in some pharmacies. In 2021, the maximum copay is $3.70 for generic drugs and $9.20 for brand-name drugs.
People with a Medicare Advantage plan, in the QDWI program, or in a Medigap plan cannot also get Extra Help benefits.
The state government administers MSPs through the Medicaid agency. These plans provide financial assistance to help people with low income pay for Medicare premiums and out-of-pocket costs, such as copays, coinsurance, and deductibles.
If someone qualifies for an MSP, they may also qualify for the Extra Help program. This program provides help for the cost of prescription drugs.
The requirements vary by state, so an individual should contact their state’s Medicaid office to find out about their eligibility.