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Medicare Savings Programs (MSPs) helps low-income beneficiaries shoulder the out-of-pocket health care costs associated with Original Medicare.
Medicare Savings Programs help low-income Medicare beneficiaries shoulder out-of-pocket health care costs, including premiums, deductibles, coinsurance and copays. Medicare Savings Programs are run through your state’s Medicaid program.
Medicare is the federal health insurance program primarily for Americans 65 and older. It’s subsidized by the government, but not free. Medicare beneficiaries must pay premiums, deductibles and copays. Medicare Savings Programs (MSPs) helps low-income beneficiaries shoulder the out-of-pocket health care costs associated with Original Medicare. Original Medicare is comprised of Medicare Part A (hospital insurance) and Medicare Part B (outpatient insurance).
Medicare Savings Programs don’t help with costs associated with Medicare Part C, a private alternative to Original Medicare. They also don’t directly help pay for Medicare Part D (prescription drug coverage), but if you qualify for an MSP, you automatically get Extra Help, a assistance program for Medicare Part D costs.
There are four types of Medicare Savings Programs:
Learn about the total cost of Medicare.
You’re eligible for a Medicare Savings Program if you are:
Eligibility for a Medicare Savings Program is primarily based on income and resources (money in checking, saving and investment accounts). Those limits vary by program and state. They are also subject to change each year. The chart below, sourced from Medicare.gov, provides the general Medicare Savings Program requirements for 2018.
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|Income limit (single)||$1,032||$1,234||$1,386||$4,132|
|Income limit (married)||$1,392||$1,666||$1,872||$5,572|
|Resource limit (single)||$7,560||$7,560||$7,560||$4,000|
|Resource limit (married)||$11,340||$11,340||$11,340||$6,000|
|Helps pay:||Part A & B costs||Part B premiums||Part B premiums||Part A premiums|
Resource limits include money in a checking or savings accounts, stocks and bonds. They do not include your home, a car, burial plot, $1,500 for burial expenses, furniture and other personal items.
Medicare Savings Programs are federally funded, but administered by the state, so you must apply for a Medicare Savings Program by calling your state’s Medicaid office.
Medicaid is the jointly-funded state and federal health insurance program for needy Americans. Learn more about the difference between Medicaid and Medicare.
Medicare.gov recommends needy beneficiaries fill out a Medicare Savings Program application through their state’s Medicaid office, even if their income or resources are higher than the amounts listed in the chart above. Many states apply different standards when determining a resident’s Medicare Savings Program eligibility. Limits in Alaska and Hawaii are slightly higher, for instance. Depending on where you live, you could still qualify for assistance.
A notice of approval or denial will come from your state, usually within 45 days of filing an application.
If you are approved for the Qualified Medicare Beneficiary program, you will receive a QMB card. It will go into effect the month after the month you were approved. (Eligibility isn’t retroactive.) Once you are in this Medicare Savings Program, providers can’t bill you for deductibles, copays or coinsurance related to Medicare-approved treatment and services. Pharmacists, meanwhile, can charge you no more than $3.70 for prescription drugs covered by Medicare Part D, but this is because you are automatically eligible for the Medicare Extra Help program (more on this below).
If you are approved for the Specified Low-Income Medicare Beneficiary or Qualifying Individual programs, the state will start paying your Medicare Part B premiums. These premiums normally come out of your Social Security check.
Medicare Savings Program limits are adjusted every January 1, based on any changes in the annual consumer price index since September of the previous year.
You do have to reapply each year to maintain coverage. You should receive a notice in the mail reminding you it’s time to confirm your eligibility again, but if not, you should call your state Medicaid office.
Medicare Savings Programs help low-income beneficiaries pay the out-of-pocket costs associated with Medicare Part A and Medicare Part B. They don’t work with Medicare Part C, a private alternative to Original Medicare, and they don’t outright cover prescription drugs.
However, if you qualify for any of the three Medicare Savings Programs for people over 65 — Qualified Medicare Beneficiary, Specified Low-Income Medicare Beneficiary or Qualifying Individual — you automatically qualify for Medicare Extra Help, a program that helps pay for a Medicare Part D prescription drug plan.
Learn more about Medicare Extra Help.
Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.
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