What Is a Medicare Savings Program?

Lots of things go up over time: your age, inflation, your list of medical problems, health insurance costs, and your blood pressure just to name a few. While Medicare is meant to be the government’s answer to rising health care costs as you get older, it doesn’t always cut it for some folks. Medicare Savings Programs (MSPs) can help.

MSPs can help low- and fixed-income people afford Medicare. If you struggle to cover your Medicare costs, listen up.

If you’re looking into MSPs, then you probably already know what Medicare is. But let’s review the basics.

Medicare is a government-run insurance program for people 65 and older, as well as people with disabilities, kidney failure or Lou Gehrig’s disease. It comes in four parts:

• Part A: Hospital insurance
• Part B: Medical insurance
• Part C: Medicare Advantage (a bundling plan run by private insurers that can include extra coverage)
• Part D: Prescription drug coverage

Parts A and B together are called Original Medicare. People who opt for Original Medicare often buy extra coverage called Medigap that helps cover your share of Medicare costs.

Part C (or Medicare Advantage, as it’s more commonly known) is parts A, B and usually D bundled together, sometimes with a few other coverages like vision and dental. Medicare Advantage plans have networks, while those with Original Medicare can go pretty much wherever they want for care.

Understanding Medicare Savings Programs (MSPs)

MSPs cover some or all of Medicare parts A and B premiums, deductibles, copays, and coinsurance for people who fall under certain income limits.

Administered by Medicaid, these programs are designed to make sure everyone has health insurance coverage. You don’t necessarily have to qualify for Medicaid to get help through an MSP.

Medicare and Medicaid are different government programs (Medicare is insurance while Medicaid is financial aid for medical services), but they work together in some cases like with MSPs. Medicare is run by the federal government while Medicaid is run by individual states. This means the rules around MSPs will differ depending on where you live.

Types of Medicare Savings Programs

Just like there are different kinds of lettuce . . . you know what, let’s make it cookies . . . talking about Medicare is already too much like eating vegetables. Okay, so just like there are different kinds of sandwich crème cookies—you’ve got the original Oreos, vanilla versions, double crème, weird holiday ones with crazy colors—there are different kinds of MSPs. As you might expect, one will probably fit your situation better than another.

Qualified Medicare Beneficiary (QMB) Program

This program pays premiums for both parts A and B. It also covers deductibles, copayments and coinsurance. With a QMB, you shouldn’t have to pay for any Medicare-covered services so long as your provider accepts Medicare or is within your Advantage network.

Eligibility Criteria

Eligibility depends on two things: income and resources (stocks, bonds and money in bank accounts).

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Single: You can’t make more than $1,275 in a month and your resources can’t add up to more than $9,430.

Married: You can’t make more than $1,724 and your resource limit is $14,130.^[1]

Specified Low-Income Medicare Beneficiary (SLMB) Program

This program will cover Part B premiums if you qualify.

Eligibility Criteria

Besides the standard eligibility requirements for Medicare, you may qualify for the SLMB program if your income is between 100% and 120% of the federal poverty level.

Single: You can’t make more than $1,526 in a month and your resources can’t add up to more than $9,430.

Married: You can’t make more than $2,064 monthly and your resource limit is $14,130.^[2]

Qualifying Individual (QI) Program

This program helps pay for Part B premiums as well. It’s only available to people who don’t qualify for any other kind of Medicaid benefit (but people who take QI assistance can still get help from a different MSP if qualified for it). With QI, there are a limited number of spots, and applications are approved on a first-come, first-served basis. Also, the government gives priority to people who got this benefit the year before.

Eligibility Criteria

You’ll need to meet the standard eligibility requirements for Medicare, of course. But beyond that, you may qualify for the QI program if your income is between 120% and 135% of the federal poverty level.

Single: You can’t make more than $1,715 in a month and your resources can’t add up to more than $9,430.

Married: You can’t make more than $2,320 and your resource limit is $14,130.^[3]

Qualified Disabled and Working Individuals (QDWI) Program

You might’ve guessed from the name, but this program is for those with disabilities who’ve lost their disability benefits and free Part A premiums because they’ve gone back to work. So, this MSP just covers Part A premiums.

Eligibility Criteria

Along with qualifying for Medicare because you’re disabled, you may qualify for the QDWI program if your income is at or below 200% of the federal poverty level. But there are also some extra earned-income disregards (accountant-speak for not counting some of your income against you) that can bring the limit up to 400% of the federal poverty level. Also, you can’t already be eligible for Medicaid.

Single: You can’t make more than $5,105 in a month and your resources can’t add up to more than $4,000.

Married: You can’t make more than $6,899 and your resource limit is $6,000.^[4]

Eligibility Requirements for MSPs

As you read above, participation is mainly based on your income and assets or resources (but some states don’t count those). Each program varies slightly, but they all set a limit on how much money you can make to qualify. The limits here are from the federal government. MSPs are run by states, so in some states you may qualify for help even if your income is higher than the federal limits. Check with your state to be sure.

To figure out if you’re eligible:

• Check your state’s income guidelines
• Talk to your state’s Medicaid office

Even if it doesn’t look like you’ll qualify based on the income guidelines, go ahead and contact your state. They may have exceptions.

Application Process

Because these are state-run programs (Medicaid!), you’ll need to apply through your state. Each state calls their Medicaid office something a little different, but you can find a list of each state’s Medicaid office contact on Medicaid.gov.

Keep in mind, you’ll need to prove you’re enrolled in Medicare and prove your income (this includes any Social Security benefits you’re getting) along with any assets or resources your state counts.

Documents you’ll need:

• Social Security card, birth certificate, passport or green card
• Medicare card
• Pay stubs or W2s
• Bank and investment account statements
• Life insurance policies (if you have any kind of cash value life insurance)

Navigating these programs and applications can seem like a maze, but you don’t have to do it alone. There are advisors who can help guide you through it for free.

How MSPs Interact With Other Programs

Besides the financial help with Medicare premiums, deductibles and copays, you’ll also get access to additional support like Extra Help. (Creative name, huh? Well, it’s also called Medicare Part D Low Income Subsidy or LIS . . . you know what? That’s definitely not better.)

This program helps cover the cost of prescription drugs—in 2024, you’ll pay no more than $11.20 for each drug.^[5] People who qualify for the QMB, SLMB and QI programs automatically qualify for Extra Help (people using the QDWI program are not eligible).

It can work the other way too. Enrollment in Extra Help can sometimes lead to automatic qualification for an MSP (it’s the government—they don’t always do things the fastest or most efficient way).

FYI, if you are accepted into an MSP and your income levels and situation make you eligible for full Medicaid benefits, your state is required to tell you.

Common Challenges in Enrolling in MSPs

These babies are quite complicated—from eligibility to application, using an MSP can be daunting. One common hurdle is burdensome paperwork for applying and renewing coverage. But you don’t have to rely on some unenthused government worker on the other end of a phone. There are people who can help you.

If you think you might struggle with Medicare costs, it’s a good idea to plan ahead for how you’ll get help paying once you enroll. The government can move slowly. So do some of the work ahead by figuring out which MSPs you’ll apply for and what you’ll need on hand to apply.

Find a Guide

Like we mentioned earlier, some people qualify for help through an MSP even when they think they won’t. If you’re struggling to pay for Medicare, check with your state to see if you qualify.

Medicare is complicated enough. Adding an MSP onto the pile can make for a real dumpster fire of paperwork, deadlines, eligibility guidelines and ever-changing rules. But using a Medicare advisor can help cut through the complications. Good ones are trained to know the ins and outs of programs related to Medicare and can make it easier to get the help you need.

The good folks at Chapter can find you the right Medicare plan, and they can help you sort through MSPs and navigate using them in conjunction with your Medicare. Chapter advisors are there to help you through every twist and turn of Medicaid—from signing up to using your benefits to making doctor appointments! And it’s all free.