In 1965, President Lyndon Johnson signed the Medicare and Medicaid Act that created the program to help provide older adults with affordable health care coverage. Today, more than 60 million people use Medicare as their primary health insurance.
And while Medicare was designed to be affordable, the premiums, copayments and deductibles can add up—making it difficult for some to take advantage of the program. In fact, health care costs using traditional Medicare can still be out of reach for many older Americans. The American Society on Aging reports that Medicare beneficiaries enrolled in traditional Medicare in 2021 had an annual Part B premium of $1,782 and a Part B deductible of $203. Plus, they were charged a 20% coinsurance for outpatient services (including physician-administered drugs.
However, for some low-income seniors, a Medicare Savings Program can help cut those costs.
What is a Medicare Savings Program?
Medicare Savings Programs are federally funded programs administered by the states that can help pay Medicare premiums, copayments and deductibles for qualifying individuals.
There are four separate Medicare Savings Programs, each with different eligibility requirements. Keep in mind all these programs are administered by the states, and each state can have slightly different eligibility requirements. To ensure your loved one’s eligibility, check with your specific state administrator.
Qualified Medicare Beneficiary Program
The Qualified Medicare Beneficiary (QMD) Program can cover Part A premiums and Part B premiums, deductibles, coinsurance and copayments.
To be eligible for the QMD program, applicants must have a monthly income at or below $1,153 for individuals or $1,546 for married couples. In addition, applicants can’t have more than $8,400 in resources for an individual or $12,600 for married couples.
The assets counted as resources vary by state but, in general, include money in a checking, savings or retirement account, stocks and bonds.
Specified Low-Income Medicare Beneficiary Program
The Specified Low-Income Medicare Beneficiary (SLMB) Program helps pay for Part B premiums, but it requires you have both Medicare Part A and Part B to qualify. In addition, you must not go over the monthly income thresholds of $1,379 for individuals or $1,851 for married couples. Resource limits are the same as for the QMD program.
Qualifying Individual Program
Like the SLMB program, the Qualifying Individual (QI) Program helps to pay for just Part B premiums. However, you must be enrolled in both Part A and Part B to be eligible for the program.
Income thresholds are slightly higher for the QI program, with monthly income limits of $1,549 for individuals and $2,080 for married couples. Resource limits remain the same as for the QMD and SLMB programs.
To continue to receive benefits, recipients must reapply to the QI program each year, and priority is given to previous QI recipients when applications are reviewed on a first-come, first-served basis.
Qualified Disabled Working Individual Program
The Qualified Disabled Working Individual (QDWI) Program is designed to help those with disabilities who are working and have lost their Social Security disability benefits and premium-free Medicare Part A because of their return to work.
To qualify for the QDWI program, applicants must not make more than $4,615 a month for individuals or $6,189 for married couples. Resource limits are set at $4,000 for individuals and $6,000 for married couples.
If you live in Alaska or Hawaii, income limits for all four programs are slightly higher.
How do you apply for a Medicare Savings Program?
Medicare Savings Programs are administered by the Medicaid program in each state, and the application process varies by state.
The Medicaid.gov website offers more information about the application process in each state.
Is other help available to pay for Medicare?
Another program administered by the federal government is called Extra Help, and it lowers the cost of prescription drugs through Medicare Part D.
To qualify for Extra Help, your savings, investments and real estate (not including your home) must be worth less than $15,510 for individuals or $30,950 for married couples. Other assets not included in the calculation include:
- Personal possessions
- Life insurance
- Burial plots
- Irrevocable burial contracts
- Some back payments from Social Security or Supplemental Security Income.
If you’re enrolled in Medicaid or have Medicare and Supplemental Security Income, you will automatically be eligible for Extra Help.