Medicare is the federal health insurance program for Americans age 65 and older, as well as younger individuals with certain disabilities. While Medicare is cheaper than traditional private health insurance, and some parts of it are free, Medicare beneficiaries must pay for some costs on their own, including premiums, deductibles, and copays.
Medicare Savings Programs (MSPs) help low-income Medicare beneficiaries pay the out-of-pocket expenses associated with Original Medicare. Original Medicare is comprises Medicare Part A (hospital insurance) and Medicare Part B (outpatient insurance).
MSPs are run at the state level by each individual state’s Medicaid program. That means you need to contact your state’s Medicaid office to apply for an MSP. Even if you already take part in a Medicare Savings Program, you will need to apply each year. (Medicaid is a separate health insurance program that helps low-income individuals, but it isn’t focused on seniors. You don’t need to have Medicaid to apply for MSPs.)
MSPs don’t help with costs from Medicare Advantage plans (Medicare Part C), which offer a private alternative to Original Medicare. They also don’t directly pay for Medicare Part D prescription drug coverage, but if you qualify for an MSP, you automatically get Medicare Extra Help, a program that helps with Part D costs.
What are the Medicare Savings Programs?
There are four types of Medicare Savings Programs. Three of them are available only if you have Medicare and are at least 65 years old:
The Qualified Medicare Beneficiary (QMB) Program helps pay for Medicare Part A premiums and Medicare Part B premiums, deductibles, coinsurance, and copays. It’s possible to qualify for the QMB program and other Medicaid programs.
The Specified Low-Income Medicare Beneficiary (SLMB) Program helps pay for Medicare Part B premiums only. You must already have Medicare Part A to qualify. You can take part in the SLMB program and other Medicaid programs at the same time. Some states may refer to this as the SLIMB program.
The Qualifying Individual (QI) Program helps pay for Medicare Part B premiums only. It’s granted on a first-come, first-served basis, with priority given to people who qualified the previous year. If you qualify for the QI program, you cannot qualify for other Medicaid programs.
The fourth MSP is available to workers who have a disability and are under age 65:
The Qualified Disabled and Working Individuals (QDWI) Program helps workers who have a disability to pay Medicare Part A premiums. It’s only available to those who lost Part A coverage because they returned to work.
Quick review: what’s Medicaid?
Medicaid is a federal assistance program that provides health insurance for low-income and vulnerable Americans. The program is partially funded by the states and each state can set its own eligibility requirements. Qualifying for Medicaid benefits depends largely on your income, but also on your age, disability status, pregnancy, household size, and your household role.
See if you qualify with our state-by-state guide to Medicaid.
Medicaid is a separate program from Medicare. Both programs provide health insurance, but Medicare coverage is primarily for seniors while Medicaid eligibility depends largely on your income. It’s possible to take part in both programs at the same time. Learn more about the difference between Medicaid and Medicare.
You do not need to have Medicaid to apply for MSPs. In fact, you don’t qualify for the QI program if you have Medicaid.
Who is eligible for a Medicare Savings Program
Eligibility for a Medicare Savings Program depends primarily on your income and resources. Your resources are loosely defined as all the savings and investments you have. The income limits and resource limits vary by MSP and state. They are based on the federal poverty guidelines (also called the federal poverty level or FPL), so they may be adjusted each year and you may not qualify even if you qualified in the past.
Three of the four MSPs are only for Medicare beneficiaries. They all require you to have, or be eligible for, Medicare Part A. You also need to live in one of the 50 states or the District of Columbia.
You may also qualify for an MSP if you receive Social Security Disability benefits, you have certain disabilities, or if you have permanent kidney failure (even if you’re under age 65).
The chart below provides the general Medicare Savings Program monthly income limits for 2022. Requirements in some states may vary slightly, especially in Hawaii and Alaska. These income limits are set to change in 2023, but until the new figures are released you may still qualify using the 2022 limits.
2021 Medicare Savings Program income limits
Income limit: individual
Income limit: married couple
Resource limit: individual
Resource limit: married couple
What it helps pay
Part A & B costs
Part B premiums
Part B premiums
Part A premiums
What counts toward your resource limit?
Your resource limit includes money you have in all types of savings accounts, checking accounts, and retirement accounts. It also includes all of your investments in stocks or bonds. If you own multiple properties, the value of everything except your primary residence may count toward your resource limit.
The resource limit does not consider your primary home, a car, a burial plot, furniture, or any other personal items. You can also exclude $1,500 per person to account for burial expenses. A life insurance policy doesn’t count, and neither do any advance tax credits or money you received for housing assistance.
How to apply for a Medicare Savings Program
MSPs are administered by state Medicaid programs, so you must call your state’s Medicaid office to apply. Medicare.gov lists contact information for all state Medicaid offices.
If you think your income or total resources are too high to qualify, you should still fill out a Medicare Savings Program application. Individual states may have different requirements, so you could still qualify for assistance depending on where you live. Alaska and Hawaii have slightly higher income limits, for instance.
How Medicare Savings Programs work
After applying, you will receive a notice of approval or denial from your state. This notice usually comes within 45 days of filing your application. What happens next depends on which program you are approved for.
If you are approved for the Qualified Medicare Beneficiary program, you will receive a QMB card. Your card goes into effect at the start of the next month; eligibility isn’t retroactive. You will need to show this card each time you receive care so that your provider knows you’re in the QMB program.
Once you are in the QMB program, health care providers won’t bill you for deductibles, copays, or coinsurance related to Medicare-approved treatment and services. Pharmacists can still charge you but you are also automatically eligible for help with prescription drug coverage through the Medicare Extra Help program. We discuss Extra Help more in the next section.
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. The premium payments normally come out of your Social Security check. Service for these two MSPs may be retroactive for up to three months.
States adjust their MSPs on January 1, based on any changes in the annual consumer price index since September of the previous year. You should receive a notice in the mail reminding you when it’s time to re-apply. If you don’t, make sure to call your state Medicaid office so you don’t lose coverage.
What is the Medicare Extra Help program?
MSPs can help pay the out-of-pocket expenses associated with Medicare Part A and Medicare Part B. They do not cover prescription drug costs. However, Medicare recipients who qualify for an MSP are also automatically eligible for Medicare Extra Help, which helps pay for a Medicare Part D prescription drug plan. Extra Help eliminates your premiums and deductibles. It also reduces your copays for generic and brand-name medications.
Learn more about Medicare Extra Help.