Medicare Savings Program (MSP)
The Medicare Savings Program (MSP) is a program funded by the federal government and administered by individual states through the Department of Health and Human Services (DHS). This is easier understood as Medicaid for people that are on Medicare. The program is aimed at helping people with low income and resources pay their Medicare premiums. In some cases, the MSP may assist in paying Medicare Part A and Medicare Part B deductibles, copayments, and coinsurance.
If someone qualifies for the following levels of the MSP (QMB, SLMB, or QI) they are automatically enrolled into the Extra Help program. Extra Help is a federal government program that can help pay for Medicare Prescriptions drug premiums and copays.
It's important to note that qualifications for Medicaid prior to Medicare are often different. These qualifications will also vary from state to state.
For example:
In Michigan a single person may have an annual income of up to $16,000 or less with $100,000 in savings and still be eligible for Medicaid. This same person, once eligible for Medicare, would no longer qualify for Medicaid (MSP) due the different eligibility requirements for people on Medicare!
In this article, we will cover the four different level MSPs, how to apply for them, and eligibility, among other things.
The Types Of Medicare Savings Program
There are four Medicare Savings Programs. These are basically 4 different levels of Medicaid. Each of these MSPs has its own income eligibility limit.
They include:
● Qualified Medicare Beneficiary (QMB)
● Specified Low-Income Medicare Beneficiary (SLMB)
● Qualifying Individual (QI)
● Qualified Disabled & Working Individuals (QDWI)
Qualified Medicare Beneficiary (QMB) Program
The Qualified Medicare Beneficiary (QMB) is one of the Medicare Savings Programs. It assists persons who do not have enough work history to qualify for premium-free Part A to pay their Medicare Part A premium.
Additionally, the QMB program pays Part B premiums as well. Once eligible for this program Medicaid becomes the secondary insurance to Medicare. Medicaid will then pay the deductibles, coinsurances, and copayments left over after Original Medicare pays its share of covered healthcare services.
Having Medicare and having QMB Medicaid makes a person “Dual Eligible”. Dual eligible beneficiaries may qualify to enroll in a unique Medicare Advantage plan called a Dual Special Needs Plan (D-SNP).
Each time you access care, ensure your provider knows you are a QMB program beneficiary. Make sure to show both your Medicare card and Medicaid card whenever you visit a provider or facility.
The following are QMB income & resource limits in 2022:
● Individual monthly income limit- $1,153
● Married couple monthly income limit- $1,546
These limits above are slightly higher in Alaska and Hawaii. You may qualify for QMB benefits even if your working income is higher than the limits listed.
● Individual resource limit- $8,400
● Married couple resource limit- $12,600
Specified Low-Income Medicare Beneficiary (SLMB) Program
The SLMB Program is a state Medical Savings Program that helps pay Part B premiums only. It does not assist in paying deductibles or copays. The SLMB program is designed for people who have Part A and limited income and resources.
Even if you have or are eligible for a premium-free Part A plan, you usually still need to pay the monthly premium for Medicare Part B. The standard amount for Part B's monthly premium is $164.90 (in 2023). However, the SLMB program will pay these Part B premiums and save you more than $2000 annually. This means your Part B premium will no longer be deducted from your Social Security if you become eligible for the SLMB program.
The income and resource limits for the SLMB program in 2022 are:
● Individual monthly income limit-$1,379
● Married couple monthly income limit-$1,851
These limits above are slightly higher in Alaska and Hawaii. You may qualify for QMB benefits even if your working income is higher than the limits listed.
● Individual resource limit-$8,400
● Married couple resource limit-$12,600
Qualifying Individual (QI) Program
The QI Program is an MSP administered by the state that helps people pay Part B premiums only. Usually, these people have Medicare Part A as well as limited income and resources.
If you receive Social Security benefits, your Part B premium won't be deducted from them if you are eligible and enrolled in the QI program.
Application for the QI program is performed every year. Benefits are allocated on a first-come, first-served basis. In other words, priority is given to the applicants from the previous year.
The QI income & resource limits in 2022 are:
● Individual monthly income limit-$1,549
● Married couple monthly income limit-$2,080
These limits above are slightly higher in Alaska and Hawaii. You may qualify for QMB benefits even if your working income is higher than the limits listed.
● Individual resource limit-$8,400
● Married couple resource limit-$12,600
Qualified Disabled And Working Individuals (QDWI) Program
The Qualified Disabled and Working Individual (QDWI) Program is the MSP that helps pay Medicare Part A premium only. To qualify for the QDWI program, you must:
● Have a disability
● Be working
● Have lost your Social Security disability benefits and premium-free Part A because you returned to work
● Not be getting state medical assistance
● Meet the income and resources limits
The income & resource limits for QDWI in 2022 are as follows:
● Individual monthly income limit-$4,615
● Married couple monthly income limit-$6,189
These limits above are slightly higher in Alaska and Hawaii. You may qualify for QMB benefits even if your working income is higher than the limits listed.
● Individual resource limit-$4,000
● Married couple resource limit-$6,000
What are the items included in the Medicare Savings Program resource limits?
Each state has its list of specific resources and limits. Resources refer to certain items or money you have in a bank account. The following are considered countable resources:
● Money in a checking or savings account
● Stocks
● Bonds
● Mutual Funds
● IRA’s
The following are examples of what resources are not:
● Your home
● Burial plot
● One car
● Furniture
● Other personal and household items
● A burial allocated amount of $1,500
Who Is Eligible For The Medicare Savings Program?
Each level of the Medicare Savings Program has its income and resource eligibility limits. Also, only the state can determine if a person qualifies for an MSP.
Please note that income and resources requirements for each of the programs may increase annually.
However, the general eligibility requirements for an MSP include:
● Aged 65 or older
● A resident of a state or the District of Columbia.
● Those under 65 must have a certain Medicare-qualifying disability such as End-Stage Renal Disease (ERSD) and Lou Gehrig’s disease, also known as amyotrophic lateral sclerosis (ALS).
● Must have limited income, savings, and resources (according to the state you're applying in).
How Do I Apply For A Medicare Savings Program?
If your answer is positive to the questions below, contact your state's Medicaid office to check if you are eligible for a Medicare Savings Program in your state.
The questions are as follows:
● Do you have, or are you eligible for, Part A?
● Is your income at or below the income limits for any of the MSPs stated above (for 2022)
● Do you have limited resources, below the limit stated above?
Interested persons must fill out an application form. You can also fill out the form even if your income or resources are higher than the specified limits. You may be asked to provide supporting documentation to prove your eligibility.
The application process may take up to 45 days. If Medicaid denies your application, you can appeal.
Low Income Subsidy (Extra Help Program)
Low Income Subsidy (LIS/Extra Help) is a federal government program that can help pay for Medicare Prescriptions drug premiums and copays. In other words, it covers your out-of-pocket costs for prescription drugs, including premiums, and deductibles, among other costs. Some people with higher incomes get partial Extra Help. Hence, they pay reduced monthly premiums, deductibles, and copayments.
You automatically qualify for Extra Help when you qualify for the QMB, SLMB, or QI program.
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