Medicare Savings Programs: Help Paying Your Premiums

The Basic Idea

Medicare is not free. Most people pay a monthly Part B premium, and Original Medicare leaves them responsible for deductibles and a 20% share of many services. For someone living on a modest, fixed income, those costs can be a heavy part of the budget. The Part B premium alone is $202.90 a month, and it is usually deducted from a Social Security check before the check ever arrives.

Medicare Savings Programs, often abbreviated MSPs, exist to lighten that load. The federal government sets the framework, but each state runs its own program, decides who qualifies within federal limits, and takes the applications. Medicare.gov notes that state rules vary and that you may still qualify even if your income or resources look too high on paper, which is why it is worth checking.

The Four Programs

Program	What it helps pay	Notes
QMB	Part A premium if any, Part B premium, deductibles, coinsurance and copays	Providers cannot bill you for Medicare-covered cost-sharing
SLMB	Part B premium	Income limit a little higher than QMB
QI	Part B premium	Apply every year, first-come first-served
QDWI	Part A premium	For certain working people with disabilities

There are four programs, each aimed at a slightly different group. Medicare.gov describes them this way.

Qualified Medicare Beneficiary (QMB). This program offers the most help. It pays your Part A premium if you have one, your Part B premium, and your deductibles, coinsurance and copayments for Medicare-covered services. Income limits are the lowest of the four.

Specified Low-Income Medicare Beneficiary (SLMB). This program pays your Part B premium. It is for people whose income is a little higher than QMB’s cutoff.

Qualifying Individual (QI). This program also pays the Part B premium and has a somewhat higher income limit than SLMB. Two features set it apart. You must apply every year to stay in QI, and states approve applications on a first-come, first-served basis, with priority given to people who got QI benefits the previous year. That means applying early in the year is a good idea.

Qualified Disabled and Working Individual (QDWI). This program pays the Part A premium for certain people with disabilities who went back to work and lost premium-free Part A. Its income limit is higher than the others, but it applies to a narrow group.

The specific income and resource limits change each year, and they can differ by state, so we do not list them here. The current figures are on Medicare.gov, and your state Medicaid agency can tell you the limits that apply to you.

Extra Help Comes Along Automatically

One feature that often goes unnoticed is that if you qualify for QMB, SLMB or QI, you automatically qualify for Extra Help, the program that lowers Part D prescription costs. Medicare.gov states that QMB, SLMB and QI include Extra Help with your drug costs. That can reduce your premiums, deductibles and copays on covered drugs for the year.

This matters because drug costs and premiums are a separate burden for many people. If you are already considering a payment option such as the one we describe in our post on the Medicare Prescription Payment Plan, remember that Medicare’s own materials say it may not be the best choice if you get or are eligible for Extra Help or a Medicare Savings Program, since those programs reduce costs rather than just reschedule them.

Protection from Surprise Bills for QMB Members

If you are in QMB, federal rules protect you from being billed for Medicare-covered services. Medicare.gov states that Medicare providers are not allowed to bill you for services and items Medicare covers, including deductibles, coinsurance and copayments. That is a strong protection, and it is a reason to show your providers both your Medicare card and your state Medicaid or QMB documentation. If a provider bills you improperly, you can call your state Medicaid office or 1-800-MEDICARE to report the problem.

How Eligibility Works

Eligibility generally comes down to two tests. The first is income. Programs compare your monthly income to a limit that depends on household size. The second is resources, meaning things like bank accounts and certain investments. Some states look at resources, and some states do not count certain types of resources or certain amounts of income when they decide who qualifies. Medicare.gov says that you may still qualify in your state even if your income or resources are above the federal limits listed, because some states are more generous.

Common things that may or may not count vary by state. Some states, for example, leave out certain assets when they decide eligibility, but you should confirm with your state rather than assume. The best approach is to apply and let the state do the calculation, rather than ruling yourself out based on a quick look at a chart.

Generally you need to have Medicare Part A to qualify for these programs. Some have additional conditions, so ask the state office about the specifics.

How to Apply

These programs are run by your state, so you apply through your state’s Medicaid agency or the local office that processes benefits for it. Many states have online applications, and offices can often help you by phone or in person. The Social Security Administration can also point you to information, and 1-800-MEDICARE can help you find the right contact for your state.

You will usually need to give personal and financial information, and the office may ask for documents that verify your income and resources. Common items include a government-issued ID, your Medicare card, and recent statements for income and bank accounts, though each state sets its own list. If you are working with a caregiver or family member, they can often help you collect the paperwork and complete the application, and the office can tell you how to authorize that help. Our caregiver’s guide to Medicare includes other tips for helping a loved one with these forms.

Ohio, Kentucky, Indiana and other states each have their own application process and names for these programs, so it is best to look up your own state’s page or call your state Medicaid office. We cannot determine your eligibility, and the state makes the decision.

What Happens After You Are Approved

If you are approved, the program begins paying your Part B premium. For many people whose premium is withheld from Social Security, that deduction generally stops once the state starts paying it, and your check goes up by that amount. The change can take a few months to show up, so ask the state when to expect it and whether any premiums withheld in the meantime will be refunded to you.

Programs also have renewal requirements. QI requires a new application each year. Others may ask you to confirm your income and resources periodically. If you get a letter from the state, open it promptly and respond by the deadline, because missing a renewal can end your benefit.

If your income or resources change, tell the state agency. A raise, a change in household size, an inheritance or a move to another state can affect eligibility. If you move, you will need to apply in your new state.

How MSPs Fit With Other Coverage

With Original Medicare. If you are in QMB, Medicaid pays your Medicare cost-sharing, which can reduce the usefulness of a Medigap policy. Whether you would still want one is a question to review with someone who can see your whole situation. If you have SLMB or QI, which pay only the premium, you still have deductibles and the 20% coinsurance, and you might consider other coverage. Our pages on how much Medicare costs and Medicare Supplement plans can help you think through that.

With Medicare Advantage. People with an MSP can join Medicare Advantage, but the way cost-sharing works can depend on the type of plan and your state’s rules. Ask the plan how your MSP and Medicaid interact with its copays before you enroll. Our post on Medicare Advantage out-of-pocket maximums describes how the plan’s own limit works.

With other help. State Pharmaceutical Assistance Programs and manufacturer assistance programs can help with drug costs, as Medicare’s materials note. You can have more than one source of help, and each has its own rules.

What an MSP Does Not Do

An MSP does not replace Medicare. You still need Medicare Part A and Part B, and you still choose between Original Medicare and an Advantage plan. It also does not cover things Medicare does not cover, such as most dental, vision and hearing care, and long-term care. Our page on Medicare and long-term care explains that gap.

And an MSP is not the same as full Medicaid. Some people qualify for both. Others qualify only for an MSP. The programs have different rules, and a state office can tell you which applies.

A Step-by-Step Way to Apply

Applying is usually less daunting than people expect, but a little preparation saves repeat trips. Here is a sequence that works for most applicants.

• Step 1: Find your state’s program. Each state names and runs its own programs. Start with your state Medicaid agency, or call 1-800-MEDICARE and ask for the contact for your state.
• Step 2: Check the current limits. Income and resource limits change each year and can differ by state. Medicare.gov lists the federal figures, and your state can tell you whether it is more generous.
• Step 3: Gather your documents. Typical items include your Medicare card, a government-issued ID, proof of income such as a Social Security benefit letter, and recent statements for bank accounts. Your state sets its own list, so ask before you go.
• Step 4: Complete the application. Many states take applications online, by phone, by mail or in person. If a family member or caregiver is helping, ask the office how to authorize that help.
• Step 5: Answer follow-up requests quickly. A request for more documentation can delay a decision, and a missed deadline can lead to a denial.
• Step 6: Read the decision notice. It should tell you which program you were approved for, when coverage starts, and what to do if you disagree.
• Step 7: Show your cards. If you are in QMB, share both your Medicare card and your state Medicaid or QMB documentation with providers.
• Step 8: Calendar your renewals. Note the date you must reapply or confirm your information, especially for QI, which requires a new application every year.

If you are close to the income limit, do not rule yourself out. Medicare.gov says some states do not count certain types or amounts of income or resources, so only an application gives you a real answer.

How an MSP Works With Each Type of Coverage

With Original Medicare alone. This is where the programs are easiest to understand. QMB pays the Part B premium and your Medicare cost-sharing, so the deductible and the 20% are generally not your responsibility. SLMB and QI pay only the premium, so you still owe the deductible and 20% coinsurance unless you have other coverage.

With Original Medicare and Medigap. A person with QMB may find that Medicaid already covers the cost-sharing a Medigap plan would pay. Whether to keep a Medigap policy in that case is worth a careful look, in part because a canceled Medigap policy can be hard to get back. A person with SLMB or QI still has the deductible and coinsurance, so Medigap may remain useful. Do not cancel anything until you have confirmed the program has been approved and is active.

With Medicare Advantage. People with an MSP can enroll in Advantage plans, but how your state coordinates payment with the plan’s copays can vary. Ask the plan and your state how cost-sharing is handled. Our post on Medicare Advantage out-of-pocket maximums explains the plan’s own limit.

With Part D. Because QMB, SLMB and QI include Extra Help, your drug plan costs may drop for the year. If you see a charge that seems wrong after you are approved, call your plan and ask whether your Extra Help status has been recorded.

Three Scenarios

These are hypothetical examples.

Picture a retiree whose Social Security check is modest and whose savings are small. They assumed they earned too much to qualify for anything. A short call to the state turns out to show that the state does not count certain resources. They apply, are approved for a program that pays the Part B premium, and their Social Security payment goes up once the deduction stops.

Picture a retiree who qualifies for QMB. They receive a bill from a clinic for a coinsurance amount. Because QMB members cannot be billed for Medicare-covered cost-sharing, they call the clinic, show their documentation, and, if the clinic persists, contact their state Medicaid office or 1-800-MEDICARE.

Picture someone approved for QI. They were approved the previous year and need to apply again. They submit the application early in the year, because approval is first-come, first-served, with priority for people who received QI the year before.

Costly Mistakes to Avoid

• Assuming you earn too much. Limits can vary by state, and some states disregard certain income or resources.
• Forgetting to reapply for QI. It requires a new application every year.
• Not showing your card to providers. QMB protections work best when the provider knows about your status.
• Dropping other coverage too early. Wait until your program is active and you understand what it pays.
• Ignoring letters from the state. A missed renewal can end your benefit.
• Forgetting to report changes. A move, a change in income or a change in household can affect eligibility.

What to Ask the State

• Which program do I qualify for, and when does coverage start?
• Is the Part B premium going to stop being deducted from my Social Security payment, and when?
• What documents do I need now, and what will I need to renew?
• How do I get Extra Help recorded with my drug plan?
• If I am in Medicare Advantage, how will my copays be handled?
• Who do I call if a provider bills me for something I should not owe?

What to Do If It Goes Wrong

If you are denied, read the notice carefully. It should explain the reason and what you can do if you disagree, and your state Medicaid office can tell you how to ask for a review. Check whether your circumstances have changed or whether you could qualify for a different program; QMB, SLMB and QI have different thresholds, so being turned down for one is not necessarily the end. If a provider bills you improperly while you are in QMB, contact your state Medicaid office or 1-800-MEDICARE. Your State Health Insurance Assistance Program offers free counseling and can help you through the process.

Frequently Asked Questions

What do Medicare Savings Programs pay for?

It depends on the program. QMB pays the Part A premium if you have one, the Part B premium, and cost-sharing on Medicare-covered services. SLMB and QI pay the Part B premium. QDWI pays the Part A premium for certain working people with disabilities.

How do I apply for a Medicare Savings Program?

You apply through your state, usually the state Medicaid agency or the local office that processes its benefits. Many states offer online, phone and in-person options. 1-800-MEDICARE can help you find the right contact.

Do I automatically get Extra Help if I qualify for an MSP?

Yes. According to Medicare.gov, QMB, SLMB and QI include Extra Help with prescription drug costs.

Do I have to reapply each year?

For QI, yes, and approvals are first-come, first-served, with priority to people who got QI the previous year. Other programs may require periodic renewals, so respond to any letter from your state.

Can I qualify if my income is above the published limit?

Possibly. Medicare.gov notes that some states do not count certain types or amounts of income or resources, so you could qualify even if you are above the federal limits listed. Applying is the only way to know.