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What is the Medicare Savings Program?

August 22, 2021

Grandmother and grandson making dinner because the grandmother may have saved with Medicare Savings Program

Not all Medicare beneficiaries can afford to pay their premiums, copayments, and coinsurance. If you have a lower income, it’s possible that you’ll qualify for a Medicare Savings Program to help with your out-of-pocket expenses.

Are you asking, “Do I qualify for a Medicare Savings Program?” If so, this article will help. This page is designed to help you understand the Medicare Savings Program income limits and other requirements.

Read on to find out if you qualify.

What Does the Medicare Savings Program Cover?

There are four different Medicare Savings Programs that you may qualify for. Each one has different requirements and benefits. In general, there are income limits and resource limits to qualify for each program, and they may help pay your premiums, deductibles, copayments, and coinsurance.

Qualified Medicare Beneficiary

The first program is known as the “Qualified Medicare Beneficiary” program. If your income is 100% of the Federal Poverty Level or below and you are below the resources threshold, you can qualify for assistance with Part A premiums (if applicable), Part B premiums, deductibles, copayments, and coinsurance. Providers are not allowed to bill you for services or items covered by Medicare, and you pay very little for prescription drugs as well.

Specified Low-Income Medicare Beneficiary

You may be eligible for the Specified Low-Income Medicare Beneficiary (SLMB) program if you make less than 120% of the Federal Poverty Level and are below the resources threshold for the program.

This program covers your Part B premium but does not cover any other out-of-pocket expenses from Medicare. You will still be responsible for your deductible, copayments, and coinsurance.

However, you will qualify for Extra Help with prescription drugs under Medicare Part D automatically, which will help you save money on needed medication.

Qualified Individual Program

The Qualified Individual (QI) program is state-based and helps pay Part B Medicare premiums for those with Medicare Part A and limited resources. This limited program is available on a first-come, first-serve basis and has limited spots each year. You also need to reapply each year.

You can qualify for the QI program if you make 135% or less of the Federal Poverty Level income and are below the resources limit for the program.

Qualified Disabled Working Individual

If you qualified for Medicare due to a disability but recently returned to work, you may no longer be able to get Medicare Part A premium-free. You can qualify for this assistance if you make as much as 400% of the Federal Poverty Limit if your income is from working.

The Qualified Disabled Working Individual (QDWI) program may help you if the following apply:

  • You’re a disabled working person under 65
  • You lost Social Security benefits and premium-free Medicare Part A due to returning to work
  • You’re not getting medical assistance from your state through Medicaid
  • You meet the income and resource requirements set by the state

QDWI will help pay your Medicare Part A premiums.

Who Qualifies for the Medicare Savings Program?

There are two qualifications for the Medicare Savings Programs. One is based on your income, and the other is your resources. The requirements may vary depending on the state you live in, and whether any of your income comes from working. Let’s take a deeper look.

What is the Income Limit for the Medicare Savings Program?

The Medicare Savings Program income limit varies by location; most states base it on a percentage of the Federal Poverty Limit, which shifts slightly each year.

In 2021, here are the monthly income limits for each program. Limits for Hawaii and Alaska are slightly higher.

  • Qualified Medicare Beneficiary: Individual $1,094 and Married Couple $1,472
  • Specified Low-Income Medicare Beneficiary: Individual $1,308 and Married Couple $1,762
  • Qualified Individual: Individual $1,469 and Married Couple $1,980
  • Qualified Disabled Working Individual: Individual $4,379 and Married Couple $5,892

There are also resource limits for each program. Counted resources include stocks, bonds, and money in your checking or savings account. The resource limit for the QMB, SLMB, and QI programs is $7,970 for an individual and $11,960 for a married couple.

For the QDWI program, the resource limit is $4,000 for an individual and $6,000 for a married couple.

What Counts as Income for Medicare Savings Program?

When looking at your income, how do you know what counts? The good news is that if you are working, around half of your working income is excluded. Worker’s compensation and disability benefits are also excluded.

If your income, after these adjustments, is close to the limit, it’s worth applying for the program. If approved, you could save a considerable amount of money on out-of-pocket expenses. Contact your state’s Medicaid office if you have questions about your eligibility.

Medicare Savings Program vs. Medicaid

The Medicare Savings Program is administered by each state, often through the Medicaid office. However, it is not the same as Medicaid.

Medicaid is specifically designed for low-income families and individuals and covers medical care with little to no out-of-pocket expenses. There is no monthly premium to be on Medicaid, you qualify based on your income and assets.

The Medicare Savings Program is designed to help Medicare beneficiaries, who are disabled or over 65, pay for their out-of-pocket costs with Medicare. This may include your Part B premium, your Part A premium (if any), and other costs.

It is possible to be eligible for both Medicare and Medicaid at the same time. These folks are known as “Dual Eligible,” and generally qualify for a Medicare Savings Program automatically, along with Extra Help for prescription drugs.

Learn More About the Medicare Savings Program

If you’re ready to learn more about Medicare and the Medicare Savings Program, it’s helpful to talk to a licensed insurance agent. Contact us to learn more and compare plans to find the one that’s right for you.

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