What Are Medicare Savings Programs?

Medicare is a federal health insurance program for older adults and people with disabilities that helps cover the costs of hospitalizations, medical expenses, and medications.

While Medicare significantly reduces health care expenses for those it protects, coverage expenses still financially burden many beneficiaries. People enrolled in Medicare can pay thousands of dollars a year in premiums, deductibles, copayments, and coinsurance.

Those with low incomes and limited resources can enroll in state-run Medicare Savings Programs to help lower care costs. These programs assist with fees that would otherwise fall on individuals.

Health Care Costs Financially Burden Many Medicare Beneficiaries

According to the Kaiser Family Foundation, one in six Medicare recipients in 2017 reported difficulty accessing care or paying medical bills because of high prices. Concerns are even greater for individuals with yearly incomes below $20,000, with one in four saying they had difficulty getting treatments or paying bills.

Research also reveals that the average Medicare beneficiary spent thousands of dollars – about $5,460 – in out-of-pocket medical expenses in 2016.

Medicare Savings Program Options

People with limited income and resources can join Medicare Savings Programs that help shield them from some medical expenses.

There are four main types of Medicare Savings Programs:

• Qualifying Medicare Beneficiary (QMB) Program – Contributes to Part A hospital insurance premiums and Part B medical premiums, deductibles, coinsurance, and copayments for Medicare-covered services
• Qualifying Individual (QI) Program – Helps those who are enrolled in Medicare Part A as well as Part B cover their Part B medical insurance premiums
• Specified Low-Income Medicare Beneficiary (SLMB) Program – Assists qualified seniors and individuals with disabilities who are enrolled in Medicare Parts A as well as B in covering the cost of Medicare Part B premiums
• Qualified Disabled Working Individual (QDWI) Program – Helps working people with disabilities younger than 65 pay for Part A premiums

As the cost of medications can be high, those who meet the criteria for Medicare Savings Programs can also benefit from the Extra Help Program. Extra Help helps cover the cost of Medicare Part D prescription drugs. Note that you are automatically qualified for Extra Help if you are enrolled in a Medicare Savings Program.

Qualifying for a Medicare Savings Program

Generally, people must have a relatively low income and few countable resources to be eligible for the QMB, QI, and SLMB programs. Some states impose specific limits on how much you can have in terms of assets to be eligible for each of these programs. These limits also vary by state, while some states do not outline an asset limit.

For 2023, Medicare.org has yet to release the financial eligibility qualification criteria. According to MedicareInteractive.org, the income thresholds will increase from 2022 to 2023.

In addition, you usually must be enrolled in Medicare Part A to qualify for a Medicare Savings Program. This, too, may differ across states.

Working people with disabilities under age 65 with limited income can enroll in the QDWI Program. To qualify, they must have a disability, be employed, and have lost Social Security disability benefits due to returning to work.

Although your assets may exceed the asset limit your state imposes, you could still be eligible for one of these programs. This is because some states do not count certain assets toward their asset limit. So, you may consider applying regardless.

Enrolling in Medicare Savings Programs

Since states administer the programs, you must apply for Medicare Savings Programs with your state. Again, states can have different eligibility requirements and may differ in how the programs help cover costs.

If you are a Medicare beneficiary struggling with health care fees, consider applying for a Medicare Savings Program. Contact your local State Health Insurance Assistance Program (SHIP). SHIP counselors can help you understand your options and determine whether you qualify for a Medicare Savings Program in your state. You also may consider reaching out to an elder law attorney in your area for assistance.

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