As people approach retirement age, they often worry about how they will afford medical expenses. Of course, Medicare is here to help all eligible seniors, but it is not a free program.  

Fortunately, a Medicare Savings Program was invented specifically to provide financial assistance for Medicare costs for older Americans in need.

In this easy-to-understand guide, we’ll explain everything you need to know about the Medicare Savings Programs (MSPs).

What is the Medicare Savings Program?

Medicare Savings Programs (MSPs, also known as Medicare Premium Payment Programs) are special programs in the United States designed to help individuals and families who have limited income with their Medicare-related costs. The programs are state-administered.

The program offers assistance in paying for your premiums, deductibles, coinsurance, and copayments, alleviating the financial burden on you as a qualified beneficiary.

What are the types of Medicare Savings Programs?

There are four main types of MSPs:

1. Qualified Medicare Beneficiary (QMB) Program: This program covers Medicare Part A and Part B premiums, deductibles, coinsurance, and copayments for eligible individuals. QMBs typically have the most comprehensive coverage under MSPs.
2. Specified Low-Income Medicare Beneficiary (SLMB) Program: SLMB assists with paying monthly Medicare Part B premiums for eligible individuals who meet the income and asset requirements but do not qualify for full QMB benefits.
3. Qualified Individual (QI) Program: QI helps pay a monthly Medicare Part B premium for individuals who meet the income and asset criteria. It has limited funding, and benefits are provided on a first-come, first-served basis.
4. Qualified Disabled and Working Individuals (QDWI) Program: QDWI helps pay Medicare Part A premiums for certain disabled individuals who are working, have lost their premium-free Part A coverage due to employment, and meet the program’s income and asset limits.

Who qualifies for the Medicare Savings Program?

The criteria that determine MSP eligibility are as follows:

1. Income: The program considers your income to determine if you’re eligible. This includes wages, Social Security benefits, pensions, retirement accounts, and other forms of income.
2. Resources: In addition to income, the program also looks at your available resources or assets. This includes cash, bank accounts, stocks, bonds, and property. However, certain resources like your primary residence, personal belongings, one vehicle, burial plots, and specific life insurance policies are exempt. The resource limits may vary depending on your state.
3. Age and Disability: Eligibility for the Medicare Savings Program isn’t limited to a specific age group. If you’re 65 or older or under 65 and have certain disabilities, you may qualify for the program.

What counts as income for the Medicare Savings Program?

The program takes into account various sources of income, including, but not limited to:

●  Wages: Income earned from your employment or self-employment.

●  Social Security Benefits: Retirement, survivors, or disability benefits you receive from the Social Security Administration.

●  Pensions: Regular payments you receive from a former employer or retirement plan.

●  Retirement Accounts: Distributions from your retirement accounts, such as 401(k) or IRA.

●  Rental Income: Income you receive from rental properties or real estate investments.

●  Investments: Dividends, interest, or capital gains you earn from stocks, bonds, or other investments.

●  Other Income: Any other sources of income you may have, such as alimony, child support, or annuities.

Certain forms of income, such as tax refunds, specific government assistance, and certain types of assistance received from family or friends, may be excluded.

MSP income limits 2023

The monthly income limits determine the level of assistance provided under the program. They are updated annually and can vary by state. In 2023, the income limits for the program are as follows:

1. Qualified Medicare Beneficiary (QMB) Program:

●  Individual: Income limit of $1,235 per month.

●  Couple: Income limit of $1,663 per month.

2. Specified Low-Income Medicare Beneficiary (SLMB) Program:

●  Individual: Income limit of $1,478 per month.

●  Couple: Income limit of $1,992 per month.

3. Qualifying Individual (QI) Program:

●  Individual: Income limit of $1,660 per month.

●  Couple: Income limit of $2,239 per month.

How to apply for Medicare Savings Program?

Applying for the program is a relatively straightforward process. Here’s a step-by-step guide to help you navigate the application: 

1. Gather necessary documentation: Before starting the application, gather essential documents such as proof of income, assets, Medicare card, Social Security number, and identification.
2. Contact your State Medicaid Office: Reach out to your state’s Medicaid office to inquire about the Medicare Savings Program and request an application form. You can typically find contact information on your state’s Medicaid website or by calling their toll-free number.
3. Complete the application: Fill out the application form accurately and provide all requested information. Ensure that you include supporting documents to verify your income and resources. Contact your state’s Medicaid office for guidance if you need assistance or have questions while completing the application.
4. Submit the application: Once completed, submit it to your state’s Medicaid office. Follow their instructions regarding submission methods, such as mailing, faxing, or online submission.
5. Await notification: After submitting your application, the state Medicaid office will review your eligibility based on the information provided. They may request additional documentation if necessary. Once the review process is complete, you will receive a notification regarding your eligibility status.

Is the Medicare Savings Program the same as Medicaid?

While the Medicare MSP Program and Medicaid are related, they are not the same program. It’s important to understand the differences between the two:

1. Medicare Savings Program (MSP): The MSP provides financial assistance to eligible individuals in paying for their Medicare costs. It specifically targets individuals with limited income and resources enrolled in Medicare. The MSP helps cover premiums, deductibles, coinsurance, and copayments associated with Medicare coverage.
2. Medicaid: Medicaid is a joint federal and state program that provides healthcare coverage to low-income individuals and families. Unlike the MSP, Medicaid is not limited to enrolled individuals in Medicare. Medicaid offers comprehensive healthcare coverage for people of all ages if they are eligible, including doctor visits, hospital stays, prescription drugs, and long-term care services.

While there are differences between the two programs, there are situations where individuals may be eligible for both. For example, some individuals may qualify for full Medicaid benefits in addition to the MSP, receiving comprehensive coverage for their healthcare needs.

The bottom line

Understanding the Medicare MSP Program is crucial for you if you’re seeking financial assistance with your Medicare costs.

By meeting the program’s eligibility criteria, you can alleviate the financial burden of premiums, deductibles, and other out-of-pocket expenses.

Take the time to familiarize yourself with these programs so you can make informed decisions and access the healthcare support you need. With knowledge and understanding, you can effectively utilize these programs to ease your Medicare expenses.

Article updated on October 2, 2023