What is the Medicare Savings Program?

Medicare Savings Programs (MSPs) helps low-income beneficiaries shoulder the out-of-pocket health care costs associated with Original Medicare.

Jeanine Skowronski

Jeanine Skowronski

Published July 6, 2018

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.

What is the Medicare Savings 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:

  1. The Qualified Medicare Beneficiary (QMB) Program helps pay for Medicare Part A premiums, Medicare Part B premiums and all deductibles, coinsurance and copays.
  2. The Specified Low-Income Medicare Beneficiary (SLMB) Program helps pay for Medicare Part B premiums only.
  3. The Qualifying Individual (QI) Program is granted on a first-come, first-served basis, with priority given to people qualified in the prior year. It helps pay for Medicare Part B premiums only.
  4. The Qualified Disabled and Working Individuals (QDWI) Program helps disabled workers under 65 pay Medicare Part A premiums.

Learn about the total cost of Medicare.

Who is eligible for a Medicare Savings Program?

You’re eligible for a Medicare Savings Program if you are:

  • Living in one of the 50 states or the District of Columbia
  • 65 or older
  • Receiving Social Security Disability benefits
  • Diagnosed with certain disabilities or permanent kidney failure (even under age 65)
  • Meet the income and resource limits in your state

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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Medicare Savings Program Income Limits in 2018

QMBSLMBQIQDWI
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 costsPart B premiumsPart B premiumsPart 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.

How do I apply for the Medicare Savings Program?

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.

How does a Medicare Savings Program work?

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.

What is the Medicare Extra Help program?

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.

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