Medicare Savings Program

Although Medicare reduces healthcare costs for many Americans, it is not free. Medicare Savings Programs (MSP) help offset the cost-share and premiums associated with Original Medicare. Qualifying beneficiaries can use this program to lower their Medicare cost-share to a manageable amount.

We’ll discuss the different Medicare Savings Programs and how to apply for a Medicare Savings Program.

What are Medicare Savings Programs?

State and local governments administer Medicare Savings Programs, which help low-income Medicare beneficiaries by covering some or all of their out-of-pocket Medicare costs.

There are several different programs based on your monthly income and assets. When you apply for a Medicare Savings Program, you’ll be assigned to the appropriate program. Since this program is regulated at a state level, the eligibility requirements for medical assistance can vary. Like Medicaid, states have the option of being more generous with their programs, but all states have a minimum threshold they must meet.

4 types of Medicare Savings Programs

The four Medicare Savings Programs are:

• Qualified Medicare Beneficiary (QMB)
• Specified Low-Income Medicare Beneficiary (SLMB)
• Qualified Individual (QI)
• Qualified Disabled Working Individuals (QDWI) 

Qualified Medicare Beneficiary (QMB) Program

The QMB Program is the MSP that provides the most benefits. Medicare beneficiaries with limited income may qualify. The QMB program may pay your Medicare Part B premiums and the other costs associated with Medicare, which includes Medicare Part A and Part B deductibles, copays, coinsurance, and excess charges.

The QMB program’s qualification rules may vary depending on your state, but the minimum requirements are standardized by the federal government. 

To qualify, you must be eligible for Medicare Part A and be under your state’s federal monthly income limits. You cannot have assets or resources that exceed the outlined limits. Typically, your home, personal vehicle, and other personal items aren’t considered resources. 

Some states do not have an asset test for Medicare Savings Programs. Check with your local Department of Social Services or Medicaid office to verify.

Specified Low-Income Medicare Beneficiary (SLMB) Program

The SLMB program is for Medicare beneficiaries whose income is too high for the QMB program but is not more than 20% above the federal poverty level. SLMB will only pay your Medicare Part B premium.

Qualified Individual (QI) Program

QI is for individuals whose income is between 20% to 35% above the national poverty level. This program will still assist with your Medicare Part B premiums. 

Qualified Disabled and Working Individuals (QDWI) Program

The QDWI program assists qualified beneficiaries with their Medicare Part A premiums only. To be eligible for QDWI, you must have the same qualifications as QI. In addition, you must also receive Social Security Disability, be disabled, and lose premium-free Part A because you returned to work. The income requirements are also higher than other MSP programs.

Medicare Savings Program advantages

Extra Help

For all of the MSPs, except QDWI, you’ll automatically receive Extra Help for prescriptions through Medicare Part D. This is provided through the Federal Low-Income Subsidy (LIS) program. Those who qualify will automatically be enrolled in the Extra Help drug assistance program. Your prescriptions must be on the formulary of your Medicare plan for Extra Help to assist with the costs of your medications.

Ongoing Special Enrollment Period

If a beneficiary qualifies for Extra Help by virtue of having an MSP, they’ll also be granted an ongoing Part D Special Enrollment Period (SEP) that allows them to make a plan change quarterly. They can apply to Part D prescription drug coverage, and Medicare Advantage plans under an SEP.

Their SEP allows one change from January through March, April through June, and July through September. Once they make their change, the policy will start at the beginning of the following month. They also have access to all other election periods, such as the Annual Enrollment Period and Medicare Advantage Open Enrollment Period.

Medicare Advantage Dual Special Needs Plans

These MSPs, in many cases, will give Medicare beneficiaries the right to enroll in Medicare Advantage Dual Special Needs Plans. These plans typically have benefits that are richer than those of non-SNP Medicare plans.

How to apply to the Medicare Savings Program

You’ll need to contact your state’s Medicaid office to apply for the Medicare Savings Program. You can also apply for benefits online. Medicaid.gov lists each state’s contact information for Medicaid services on its website.

You can also apply at the same time you’re applying for Extra Help on the Social Security Administration’s website. There is a question on the Federal Low-Income Subsidy application that you can answer to send the information to the state to see if you qualify. Your state may ask you for additional information in order to complete and fully process your MSP application.