Medicare Savings Programs: How to Reduce Your Medicare Costs

Medicare Savings Programs: How to Reduce Your Medicare Costs

Medicare Savings Programs (MSPs) help Medicare beneficiaries with low incomes and limited resources pay for the monthly cost of Medicare and health care expenses, including deductibles, copays and coinsurance.

Eligibility varies by state, but most people qualify for one of the four MSPs if they earn less than $18,588 a year and have limited resources. Those with disabilities and limited resources can earn up to $55,380 and qualify.

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What are Medicare Savings Programs?

Medicare Savings Programs can eliminate or reduce the cost of Original Medicare (Parts A and B) and can reduce how much enrollees pay for medical care. What’s covered and who qualifies depend on the individual MSP as well as the state that's managing the program.

Most states use a combination of both income and assets to determine eligibility. You can enroll in a Medicare Savings Program even if you have Medicaid.

About the 4 Medicare Savings Programs

The four Medicare Savings Programs are Qualified Medicare Beneficiary (QMB), Specified Low-Income Medicare Beneficiary (SLMB), Qualifying Individual (QI) and Qualified Disabled Working Individual (QDWI).

For seniors, Qualifying Individual is the easiest to qualify for because of its high income limits. Qualified Disabled Working Individual is only available to those enrolled in Medicare because of a disability or health condition.

  1. Qualified Medicare Beneficiary

    The Qualified Medicare Beneficiary (QMB) program helps pay for the monthly cost of Medicare Part A if you're one of the few people who are not otherwise eligible for free Medicare Part A.

    QMB also pays for the monthly cost of Medicare Part B, which is $164.90 per month in 2023. And it pays for medical expenses incurred as part of Medicare Part B including yearly deductibles, copayments and coinsurance for doctor appointments and outpatient care.

    Typically, individuals can qualify with yearly incomes of $13,836 or less in 2022 and assets of $8,400 or less. Married couples can qualify with incomes of $18,552 or less and resources up to $12,600 in most states.

    If you are enrolled in a QMB program, you may have to pay a minimal copay when you receive medical care. This bill will come from Medicaid (not Medicare) because Medicaid administers the savings programs.

  2. Specified Low-Income Medicare Beneficiary

    The Specified Low-Income Medicare Beneficiary (SLMB) program helps pay for the monthly cost of Medicare Part B, which is $164.90 in 2023.

    In most states, individuals can qualify for the SLMB program with an income of $16,000 or less per year and assets of $8,400 or less. Married couples can qualify if they earn up to $22,212 with assets not exceeding $12,600. You must be enrolled in both Medicare Part A and Part B to qualify.

  3. Qualifying Individual

    The Qualifying Individual (QI) program also helps pay for the monthly cost of Medicare Part B.

    QI has a slightly higher qualifying income limit than the QMB and SLMB programs, and you cannot qualify for this program if you are enrolled in your state’s Medicaid program. In most states, individuals can qualify if their incomes do not exceed $18,588 a year with assets at or below $8,400. Married couples can qualify in most states with incomes that do not exceed $24,960 a year and assets at or below $12,600.

    You must apply every year for the program. States approve applications on a first-come, first-served basis, and they give priority to people who received QI benefits the previous year.

  4. Qualified Disabled Working Individual

    The Qualified Disabled Working Individual (QDWI) program covers the monthly cost of Medicare Part A for people with disabilities who returned to work and, as a result, lost their free Medicare Part A and Social Security Disability Insurance (SSDI).

    To qualify for this program, you must have Medicare while being under age of 65 and actively employed while having a disability. You also need to meet the financial requirements, which in most states means an individual needs to earn $55,380 per year or less and have assets of $4,000 or less. Married couples can qualify in most states with yearly incomes of $74,268 annually and assets of $6,000 or less.

Medicare Savings Programs financial requirements

Most people will qualify for a Medicare Savings Program if they earn less than $18,588 a year, while those with disabilities can earn up to $55,380 annually and still qualify.

Individual eligibility

Couple eligibility

Medicare Savings Program
Monthly income limit
Resource limit
What it pays for
Qualified Medicare Beneficiary (QMB)$1,153$8,400Part B monthly cost
Part B medical costs
Part A monthly cost (if applicable)
Specified Low-Income Medicare Beneficiary (SLMB)$1,379$8,400Part B monthly cost
Qualifying Individual (QI)$1,549$8,400Part B monthly cost
Qualified Disabled Working Individual (QDWI)$4,615$4,000Part A monthly cost

Monthly income and resource limits in most states for 2022. Limits are slightly higher in Alaska and Hawaii.

Individual eligibility

Medicare Savings Program
Monthly income limit
Resource limit
What it pays for
Qualified Medicare Beneficiary (QMB)$1,153$8,400Part B monthly cost
Part B medical costs
Part A monthly cost (if applicable)
Specified Low-Income Medicare Beneficiary (SLMB)$1,379$8,400Part B monthly cost
Qualifying Individual (QI)$1,549$8,400Part B monthly cost
Qualified Disabled Working Individual (QDWI)$4,615$4,000Part A monthly cost

Monthly income and resource limits in most states for 2022. Limits are slightly higher in Alaska and Hawaii.

Couple eligibility

Medicare Savings Program
Monthly income limit
Resource limit
What it pays for
Qualified Medicare Beneficiary (QMB)$1,546$12,600Part B monthly cost
Part B medical costs
Part A monthly cost (if applicable)
Specified Low-Income Medicare Beneficiary (SLMB)$1,851$12,600Part B monthly cost
Qualifying Individual (QI)$2,080$12,600Part B monthly cost
Qualified Disabled Working Individual (QDWI)$6,189$6,000Part A monthly cost

Monthly income and resource limits in most states for 2022. Limits are slightly higher in Alaska and Hawaii.

Each year, the federal government establishes annual income and resource limits for the programs. However, the programs are managed by state Medicaid agencies. States are not allowed to make it more difficult to qualify, but they can make it easier to qualify by having higher thresholds for income or assets.

  • Higher income limits are used in the District of Columbia and seven states — Alaska, Connecticut, Hawaii, Indiana, Maine, Maryland and Massachusetts — making it easier to qualify for the Medicare Savings Programs.
  • Asset limits are not used when determining eligibility in the District of Columbia and 10 states — Alabama, Arizona, Connecticut, Delaware, Louisiana, Mississippi, New Mexico, New York, Oregon and Vermont. Additionally, asset limits are higher than federal standards in Maine, Massachusetts and Minnesota.

For example, Connecticut's QMB program has a monthly income limit of $2,390 for individuals and $3,220 for couples. That's about twice as high as the federal limits of $1,153 for single individuals and $1,546 for couples.

What's included as income

What's excluded from income

  • Wages
  • Net earnings from self-employment
  • Social Security benefits
  • Pensions and annuity income
  • Unemployment income
  • Royalties

What's included as income

  • Wages
  • Net earnings from self-employment
  • Social Security benefits
  • Pensions and annuity income
  • Unemployment income
  • Royalties

What's excluded from income

  • The first $20 of your monthly income
  • The first $65 of your earned monthly wages and half of your monthly wages after the first $65
  • Interest and dividends
  • Assistance programs for those with low incomes including the Supplemental Nutrition Assistance Program (SNAP), housing and home energy

Income calculations for Medicare Savings Programs typically use the same guidelines as the Supplemental Security Income (SSI) program. Refer to the guidelines from the Social Security Administration for more details, or check with your state Medicaid office when filing your application because your state may use different rules.

What's included as a resource

What's excluded from your resources

  • Cash
  • Money in a checking or savings accounts
  • Retirement accounts
  • Stocks, bonds, mutual funds
  • Second homes or real estate holdings

What's included as a resource

  • Cash
  • Money in a checking or savings accounts
  • Retirement accounts
  • Stocks, bonds, mutual funds
  • Second homes or real estate holdings

What's excluded from your resources

  • Primary residence
  • One car
  • Personal possessions such as household goods
  • Jewelry such as wedding or engagement rings
  • Burial spaces and burial funds amounting to $1,500 per person
  • Life insurance policy with a cash value up to $1,500 per person

In addition to meeting the income and resource requirements, you must be enrolled in or qualified for Medicare to be eligible for a Medicare Savings Program. You also must reside in one of the 50 states or the District of Columbia. Medicare Savings Programs are not available in Puerto Rico or the Virgin Islands.

Go ahead and apply

If you are struggling to pay your Medicare expenses, it is always a good idea to apply to the Medicare Savings Programs to see if you might qualify. Even if you're not eligible based on the federal standards, you may still qualify in your state because of different requirements and calculation methods.

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How to apply for a Medicare Savings Program

Apply for the Medicare Savings Programs through your state’s Medicaid agency. You can usually submit your application online, over the phone or by mail.

About 16% of all Medicare enrollees participate in the Medicare Savings Programs. However, only about half of the people who are eligible are enrolled, meaning many people who qualify for financial assistance are not getting the available help.

Medicare or Medicaid may prompt you to apply for an MSP based on your financial details. But it is always better to be proactive and to apply for the programs even if you think you may not qualify. You can apply for an MSP program at the same time you apply for Medicare or anytime you’re enrolled in Medicare, but the application is separate from your Medicare application.

It can take a few months before you are deemed eligible for one of the savings programs and actually receive benefits. The benefits should apply retroactively from the time you actually qualified.

Extra Help program for prescription drugs If you qualify for one of the Medicare Savings Programs, you automatically qualify for full benefits under the Medicare Extra Help program, which reduces the cost of prescription drugs and Medicare Part D prescription insurance.

If you don't automatically qualify for Extra Help, you can apply through the Social Security Administration.

Frequently asked questions

What does the Medicare Savings Program pay for?

The Medicare Savings Programs help pay for Medicare-related costs including the monthly cost of Original Medicare and medical expenses. You can qualify if you are enrolled in Medicare, have a low income and have limited resources.

What is the income limit for the Medicare Savings Program?

Most individuals qualify for one of the Medicare Savings Programs if they earn less than $18,588 a year in 2022. Those who have disabilities can qualify with incomes up to $55,380 a year. However, requirements can vary widely between states.

What’s the difference between QMB and SLMB?

Between these two Medicare Savings Programs, Qualified Medicare Beneficiary (QMB) has lower income limits than Specified Low-Income Medicare Beneficiary (SLMB), making it harder to qualify. But QMB has better benefits, covering nearly all costs for the Medicare program and medical care.

Does Social Security count as income for QMB?

Yes, Social Security is considered income. If your monthly Social Security check exceeds $1,153 a month and you are single, you will not qualify for the Qualified Medicare Beneficiary (QMB) program in most states.

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