What are Medicare Savings Programs, and How Do they Work?

Medical expenses are the third largest annual expense for Americans 65 and older. While Medicare provides affordable healthcare insurance for older Americans, its costs can be too high for individuals with low incomes and resources. 

Medicare Savings Programs are operated by each state’s Medicaid agency to provide low-income Medicare beneficiaries with financial aid so they can get access to the care they need. This is one of the ways that Medicaid and Medicare work together to ensure older Americans receive affordable, quality healthcare. 

Key Takeaways:

• Medicare Savings Programs are run by each state Medicaid office.

• There are four types of Medicare Savings programs with different eligibility requirements and benefits.

• Some people automatically qualify for Medicare Savings Programs and others need to apply. If you’re having a difficult time paying for Medicare-related costs, you should check to see if you’re eligible for one of these programs.

What are Medicare Savings Programs?

Medicare Savings Programs (MSPs) are Medicaid-run aid for Medicare beneficiaries who have low incomes and resources. In some cases, Medicare Savings Programs may also be called Medicare Buy-In Programs or Medicare Premium Payment Programs. Benefits vary by program, but MSPs help Medicare beneficiaries pay for Medicare Part A and Part B premiums, Part A and B deductibles, coinsurance, and copayments. 

Who’s eligible for Medicare Savings Programs?

Eligibility is different for each Medicare Savings Program. Each has its own monthly income limit and resource limit for both individuals and married couples. We detail the income and resource limits for each program below. 

Note: For each of the four Medicare Savings Programs, income and resource limits are slightly higher in Alaska and Hawaii due to higher costs of living. 

What counts toward your “resources?”

For the purpose of Medicaid and Medicare Savings Programs, your “resources” are:

• Any money you have in your checking, savings, or retirement accounts

• Value of stocks

• Bonds

States won’t count the following when determining your available resources:

• Your home’s value

• One car

• Burial plot

• Up to $1,500 set aside for burial expenses

• Furniture

• Household and personal items

The four types of Medicare Savings Programs

There are four types of Medicare Savings programs with different levels of coverage and eligibility requirements. Some states have different names for these programs. Learn more about each of the programs below.

Qualified Medicare Beneficiary (QMB) Program benefits and eligibility

The Qualified Medicare Beneficiary Program helps Medicare beneficiaries pay for:

• Part A premiums

• Part B premiums

• Part A and B deductibles

• Coinsurance and copayments for Medicare-covered services

If you’re on the QMB Program, you have cost protection. This means Medicare providers are not allowed to bill you for Medicare-covered services and equipment. You may receive a bill for a Medicaid copayment.

If you do receive a bill:

• Tell your provider or debt collector that you’re on the QMB program and should not be charged.

• Contact your state Medicaid office to get a refund for bills paid.

Individuals who receive QMB benefits are also automatically eligible for Extra Help, otherwise known as the Part D Low-Income Subsidy (LIS). With Extra Help, you’ll pay no more than $11.20 for each drug covered by your Medicare drug plan (in 2024).

QMB Program eligibility

The QMB program is intended for people who are most in need. As such, it has the lowest limits of all of the Medicare Savings Programs. Below are the income and resource limits for 2024. These limits change each year.

Specified Low-Income Medicare Beneficiary (SLMB) Program benefits and eligibility

The Specified Low-Income Medicare Beneficiary Program pays for beneficiaries' Part B premiums.

Individuals who receive SLMB benefits are also eligible for Extra Help and will pay no more than $11.20 for drugs covered by their Medicare drug plan (in 2024). 

SLMB Program eligibility

While SLMB only provides financial support for Part B premiums, you must be enrolled in both Part A and Part B to be eligible. Below are the income and resource limits for 2024. These limits change each year.

Qualifying Individual (QI) Program benefits and eligibility

The Qualifying Individual Program pays for beneficiaries' for Part B premiums.

If you qualify for the QI Program, you’ll also receive Extra Help benefits and will pay no more than $11.20 for drugs covered by your Medicare plan (in 2024). 

QI Program eligibility

Below are the income and resource limits for 2024. These limits change each year.

If you qualify for Medicaid, you cannot receive benefits from the QI program, but you may be able to receive assistance from another Medicare Savings Program. 

You need to re-apply for the QI Program each year to continue receiving benefits. States approve QI applications on a  first-come, first-served basis, but if you received QI benefits the previous year, your application will be prioritized. 

Qualified Disabled & Working Individual (QDWI) Program benefits and eligibility

The Qualified Disabled and Working Individual Program pays for beneficiaries' Part A premiums. 

QDWI Program eligibility

To qualify for the QDWI Program, you must meet all of the following criteria as well as the income and resource limits detailed in the chart below:

• You have a disability

• You’re currently working

• You lost your Social Security disability benefits and premium-free Part A because you returned to work

How to apply for Medicare Savings Programs

Medicare Savings Programs are run by each state’s Medicaid agency. Many people automatically qualify for these programs. If you don’t, you will need to apply. Even if you don’t meet the income and resources requirements detailed above, you should check your state-specific eligibility requirements, because some states have different criteria or count resources differently.

To apply, contact your local Medicaid office.

If you’re having a difficult time applying, have questions about eligibility, or need help getting a refund for Medicare bills you shouldn’t have received, we’re here to help! Our Medicare Advocates can help you navigate the ins and outs of these programs. Just give us a call at (855) 900-2427 to get your Medicare questions answered.

Other ways to save on Medicare costs

Medicare Savings Programs help beneficiaries pay for Part A and B premiums and out-of-pocket costs. These programs are just one of the programs available to older Americans with low incomes. In addition to government programs that provide financial assistance for Medicare-related expenses, there are strategic ways to save on healthcare costs. 

Additional government programs for financial aid:

• Extra Help, also known as the Part D Low-Income Subsidy (or LIS)

• Supplemental Security Income (SSI) benefits

• Additional Medicaid programs run by your state. Most states have at least one program intended for individuals who are aged (or elderly), blind, or disabled. This is often called ABD or EBD Medicaid. 

Ways to save outside of government programs

All Medicare beneficiaries, regardless of income and resource amounts, can save by making smart (sometimes strategic) choices. 

1. Opt for generic or comparable prescriptions. In some cases, just switching from one form of a medication to another (e.g., from a capsule to a tablet) can save you a significant amount of money.

2. Price check your pharmacy! Pharmacies charge different amounts for prescriptions. Your plan may also have preferred pharmacies with lower costs for you. Finally, some people can save by switching to a mail order pharmacy.

3. Re-evaluate your Medicare coverage each year. During the Open Enrollment Period, you can change your Medicare Advantage and prescription drug plans. Because plans change each year, this is a good time to shop around to see if you can save. 

If you have any questions about how you can save on Medicare costs, we’re here to help with free advice and support! We’ll compare pharmacy pricing, help you look for a better-value plan, and much more. 

Schedule a free consultation or call us at (855) 900-2427 to get your questions answered and feel confident in your Medicare decisions.