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Medicare Savings Program: What It Is, How It Works, and Who Qualifies

Healthcare costs can be overwhelming, especially for people living on a fixed income. That’s where Medicare Savings Programs (MSPs) come in. If you are either new to Medicare or a new agent, you might ask; what is the Medicare savings Program. This program is designed to help individuals who meet specific income requirements with Medicare-related costs such as; premiums, deductibles, and coinsurance.

Let’s break down what these programs are, how they work, and who qualifies.

What Is the Medicare Savings Program

The Medicare Savings Program (MSP) is a set of federally funded, state-run programs that help eligible individuals pay for some or all of their Medicare Part A and/or Part B costs. This includes:

• Monthly premiums
• Annual deductibles
• Copays or coinsurance amounts

There are four main types of MSPs, each with slightly different income and asset limits and benefits.

The Four Types of Medicare Savings Programs

1. Qualified Medicare Beneficiary (QMB) Program
   • Pays for Medicare Part A & Part B premiums
   • Also covers deductibles, coinsurance, and copayments
   • Very limited income and asset limits apply
2. Specified Low-Income Medicare Beneficiary (SLMB) Program
   • Helps pay for Part B premiums only
   • Slightly higher income limits than QMB
3. Qualifying Individual (QI) Program
   • Also helps with Part B premiums
   • Available on a first-come, first-served basis
   • You must reapply each year
4. Qualified Disabled and Working Individuals (QDWI) Program
   • Pays for Part A premiums
   • For people under 65 who lost their premium-free Part A due to returning to work

How the Program Works

If you qualify for any of the Medicare Savings Programs:

• Your state pays your Medicare premiums directly to Medicare.
• In the case of QMB, providers are prohibited from billing for services covered by Medicare (except for a small copay in some cases).
• Enrollment in an MSP automatically qualifies you for Extra Help, a program that reduces prescription drug costs under Medicare Part D.

Who Qualifies for a Medicare Savings Program

Eligibility is based on monthly income and assets. The exact limits vary slightly by state, but general federal guidelines for 2025 are:

1. QMB (Qualified Medicare Beneficiary)

• Income: Below $1,325/month (individual), $1,783/month (married couple)
• Resources: Below $9,660 (individual), $14,470 (couple)

2. SLMB (Specified Low-Income Medicare Beneficiary)

• Income: $1,585/month (individual), $2,135/month (couple)
• Resources: Same as QMB

3. QI (Qualifying Individual)

• Income: $1,781/month (individual), $2,400/month (couple)
• Resources: Same as QMB

4. QDWI (Qualified Disabled and Working Individual)

• Income: Up to $5,302/month (individual), $7,135/month (couple)
• Resources: $4,000 (individual), $6,000 (couple)

Note: These limits are approximate and may vary slightly by state and year. Some states do not count all income or resources when determining eligibility.

Another way to save is by using the Canadian Medstore for some non-formulary or higher cost medications. Click here to watch a video on this program.

How to Apply

You must apply through your state Medicaid office, even though the program is funded by the federal government. You can apply at any time during the year; there’s no annual enrollment window for MSPs.

When applying, you’ll typically need to provide:

• Proof of income (such as pay stubs or Social Security statements)
• Bank statements
• Medicare card
• Identification documents

Individuals living on Medicare with a limited income shouldn’t overlook the Medicare Savings Programs. These programs can save hundreds or even thousands of dollars annually, making it easier to access needed care without worrying about the financial burden.

Those who might be close to the income or asset limits should still apply. Some states have flexible guidelines or exclude certain resources from their calculations.

Medicare agents; stay updated on the latest events and information, click here.

If you are an agent who is ready to join the team at Crowe; click here for contracting

A licensed Medicare agent or your local State Health Insurance Assistance Program (SHIP) can provide guidance with the process.

Extra help Medicare

Medicare provides programs and benefits to many people. This includes the Extra Help Medicare program that provides qualified beneficiaries help paying their Medicare Part D monthly premium, annual deductible, coinsurance and copays for their prescription medications.
To qualify for this program, individuals must meet income requirements.  Individuals who are accepted into this program do not have to pay any Part D late enrollment penalty they may have acquired.

How to apply for extra help

If you do not automatically qualify for Extra Help, you will need to apply.  You must meet the following qualifications to be eligible for Extra Help.

1. Applicants must have Medicare Parts A and B.
2. They must reside in the U.S. or the District of Columbia.
3. They do not have more than $34,360 in assets that include savings, investments & real estate if they are married, or $17,220 if they are single or not living with a spouse. If your assets are more than that, you are not eligible for Extra Help. Important; this amount does not include your home, cars or personal possessions.  It also does not include life insurance, irrevocable burial contracts or back payments from Social Security or SSI.

If you meet the qualifications specified above, you can apply for Extra Help online.

Click here to apply for Extra Help online

For help with the online application, call Social Security at 1-800-772-1213 (TTY 1-800-325-0778).

Please note: Some people do not need to apply for Extra help.  If you have either Medicare and SSI (Supplemental Security Income) or Medicare and Medicaid, you do not need to apply for Extra Help.  You will automatically be enrolled.

Extra Help isn’t available in Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana Islands, or American Samoa. But there are other programs available in those areas to help people with limited income and resources. Programs vary in these areas. Call your State Medical Assistance (Medicaid) office to learn more

Who can get Extra Help

If you think you meet the financial requirements and have Medicare A & B as well as are a resident of the U.S. or District of Columbia, just complete the online application.  You will receive a letter notifying you if you are accepted into the program.

Important:  residents of Guam, Puerto Rico, the US Virgin Islands, Northern Mariana Islands or American Samoa are not eligible for the Extra Help program.  To find alternative programs in those areas, check your state’s Medicaid eligibility at Medicaid.gov to find resources.

Additional financial resources

Individual states also have financial resources available through Medicare Savings Programs for those who meet the income qualifications. Use this link to find additional information for financial help in your area.

Beneficiaries can also go to Medicare.gov  or call 1-800-medicare (TTY 1-877-486-2048)to find information on financial assistance programs.

Please be aware:  Extra Help is not a prescription drug plan.  Beneficiaries must enroll in either an MAPD plan or a stand alone PDP plan to have coverage for prescription medications.

Agents, learn how to run a Medicare PDP or MAPD plan quote using Sunfire or Connecture.  Watch our quick YouTube video

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