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BEACON Senior News

What are Medicare savings programs?

Nov 22, 2023 10:54AM ● By National Council on Aging

For adults age 65 and older, Medicare provides important health care coverage. But it’s not free; there are out-of-pocket costs to consider. For example, while most people won’t pay a premium for Medicare Part A (hospital insurance), Part B (medical insurance) does have a monthly premium. There are other out-of-pocket costs as well, including deductibles, copayments and coinsurance.

If you’re an older adult with chronic health issues, your Medicare costs can really add up during the year. And unless you have a Medigap policy or Medicare Advantage plan, there’s no annual limit on what you pay out of pocket.

So what do you do if you’re barely making ends meet? Can you get help paying your Medicare out-of-pocket costs? The answer is yes. If you have limited income and assets, the Medicare Savings Programs (MSPs) can help cover your Medicare costs. Not only will this reduce your financial worries, it will make it easier to get the care you need to stay healthy.

What are MSPs?

Medicare Savings Programs are special benefit programs sponsored by state Medicaid agencies. Also referred to as Medicare Buy-In Programs or Medicare Premium Payment Programs, they are designed to relieve some (or all) out-of-pocket Medicare expenses for people with limited means.

There are four different MSPs:

  • Qualified Medicare Beneficiary (QMB): Helps pay for Part A premium and Part B premium, deductibles, coinsurance and copayments
  • Specified Low-Income Medicare Beneficiary (SLMB): Helps pay for Part B premium
  • Qualifying Individual (QI): Helps pay for Part B premium
  • Qualified Disabled Working Individual (QDWI): Helps pay for Part A premium

Each MSP has unique benefits and eligibility guidelines. You cannot choose which program you want to enroll in. Instead, you will be enrolled in the one most closely matched to your income, assets and other details provided on your application.

Three of the four MSPs cover the Medicare Part B premium, which in 2024, is $174.70 a month for most people. Enrollment in an MSP could save you $2,0968.40 each year. If you’re living on a fixed income, this extra financial help can give you added peace of mind and more room in your budget for essentials like food and utilities.

Enrollment in an MSP automatically qualifies you to receive the Medicare Part D Low Income Subsidy (LIS, or Extra Help). This benefit helps pay for prescription drugs and is estimated by the Social Security Administration to have an annual value of $5,300. Plus, if you’re not already enrolled in Medicare Part D, you will have no late enrollment penalty if you receive Extra Help.

Who qualifies?

You must have at least Medicare Part A and meet your state’s income and asset limits to qualify for an MSP. 

All of the MSPs in all states include a $20 general income disregard, which means the first $20 of your monthly income is not counted toward the income limit. If you receive food assistance through the Supplemental Nutrition Assistance Program (SNAP), those funds are also not counted.  

States may apply different standards and methods in determining eligibility for MSPs. Be sure to refer to the specific eligibility guidelines for your state.

How do I apply?

You must apply for MSPs through your state’s Medicaid office. To find out if you qualify for one of the four programs, you can:

  • Contact the Colorado Medicaid Office at 800-221-3943. You can find the contact information for other states on the Medicaid website.
  • Reach out to your local State Health Insurance Assistance Program (SHIP). SHIPs provide free, unbiased guidance to Medicare beneficiaries and their families. They can help you apply for the MSPs and Part D Low Income Subsidy/Extra Help. Contact the Colorado Springs SHIP office at 719-471-2096. Find SHIPs in other states by calling 1-877-839-2675.
  • Visit BenefitsCheckUp®, National Council on Aging’s free online tool where you can learn more about money-saving benefits programs, including Medicaid and the Medicare Savings Programs. 
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