A Medicare Savings Program (MSP) is a Medicaid-funded benefit that helps people with limited income pay for their Medicare costs. Depending on which of the four programs you qualify for, your state may cover your Medicare premiums, deductibles, copayments, or coinsurance. These programs are run by individual states but follow federal guidelines, and they can save you hundreds of dollars a month on healthcare costs you’d otherwise pay out of pocket.
The Four Types of Medicare Savings Programs
There are four distinct Medicare Savings Programs, each covering different costs and serving slightly different groups of people. The most comprehensive is the Qualified Medicare Beneficiary (QMB) program, and the others cover narrower slices of Medicare expenses.
Qualified Medicare Beneficiary (QMB)
QMB is the most generous of the four programs. It covers Part A premiums (if you don’t already get premium-free Part A), Part B premiums, and all deductibles, coinsurance, and copayments for Medicare-covered services. That last part is significant: federal law prohibits Medicare providers and suppliers, including pharmacies, from billing QMB enrollees for any Medicare cost-sharing. If you’re in the QMB program, you have no legal obligation to pay Part A or Part B deductibles, coinsurance, or copayments. If a provider tries to bill you for those costs, they’re violating federal law.
Specified Low-Income Medicare Beneficiary (SLMB)
SLMB covers your Part B premiums only. It doesn’t help with deductibles, copayments, or coinsurance. You need to have both Part A and Part B to qualify. The income limits are slightly higher than QMB, so this program catches people who earn a bit too much for the fuller benefit.
Qualifying Individual (QI)
Like SLMB, the QI program pays only your Part B premiums, and you must have both Part A and Part B. The income ceiling is higher than SLMB, making this the option for people whose income is above the SLMB threshold but still limited. One key difference: you cannot receive QI benefits if you’re already on Medicaid.
Qualified Disabled and Working Individual (QDWI)
QDWI serves a very specific group: people under 65 who are disabled and lost their free Medicare Part A coverage because they returned to work. If that applies to you, QDWI helps pay your Part A premiums so you can keep hospital insurance. To qualify, you must continue to have a disabling impairment, sign up for premium Part A, have limited income, and have resources below $4,000 as an individual or $6,000 as a couple (not counting your home, usually one car, and certain insurance). You also can’t already be eligible for Medicaid.
Who Qualifies: Income and Asset Rules
Eligibility for all four programs is based on your monthly income and, in most cases, the value of your assets (also called resources). The income limits rise as you move from QMB to SLMB to QI, meaning each program has progressively higher thresholds. The exact dollar amounts are updated annually and vary by state.
When your state calculates your income, it doesn’t count every dollar. A $20 monthly general income exclusion is subtracted from your countable income, which is the same exclusion used in the Supplemental Security Income (SSI) program. For the QDWI program, additional earned income disregards apply on top of that $20, which makes sense given that the program specifically serves people who’ve gone back to work.
Some states have eliminated the asset test entirely for QMB, SLMB, and QI, meaning they only look at your income when deciding eligibility. Other states still count resources like bank accounts and investments but exclude your home, one vehicle, and burial funds. Because these rules differ by state, it’s worth checking with your state Medicaid office to find out which rules apply where you live.
Automatic Eligibility for Prescription Drug Help
One of the most valuable side benefits of enrolling in any Medicare Savings Program is that you automatically qualify for Extra Help, also known as the Part D Low Income Subsidy. Extra Help covers most of your prescription drug costs under Medicare Part D, including premiums, deductibles, and copayments. This can save several thousand dollars a year on medications alone.
You don’t need to apply separately. Once your state confirms your MSP enrollment, you’re automatically enrolled in Extra Help. If you want, you can also apply for both programs simultaneously through Social Security. When you submit an Extra Help application, Social Security will send your information to your state to start an MSP application unless you specifically ask them not to.
How the Programs Differ at a Glance
- QMB: Covers Part A premiums, Part B premiums, deductibles, coinsurance, and copayments. Lowest income threshold. Providers cannot bill you for cost-sharing.
- SLMB: Covers Part B premiums only. Slightly higher income limit than QMB.
- QI: Covers Part B premiums only. Higher income limit than SLMB. Cannot be combined with Medicaid.
- QDWI: Covers Part A premiums only. For disabled workers under 65 who lost free Part A by returning to work.
How to Apply
You apply for Medicare Savings Programs through your state Medicaid office, not through Medicare itself. Each state has its own application form and process. You can typically apply in person, by mail, or online depending on your state. Many states also accept applications by phone.
You’ll generally need to provide proof of income (such as Social Security benefit statements, pay stubs, or pension documentation), proof of assets (bank statements, investment account records), your Medicare card or Medicare number, and proof of identity and residency. If you’re already receiving other forms of assistance like SNAP or SSI, your state may already have much of this documentation on file.
Your local State Health Insurance Assistance Program (SHIP) can help you with the application at no cost. SHIP counselors are trained to walk people through the process and can tell you exactly which documents your state requires. You can find your state’s SHIP by calling 1-877-839-2675.
If you’re approved, benefits typically start the month after your application is processed, though this varies by state. Your state Medicaid agency will begin paying the covered premiums directly, so the amount is deducted before you ever see a bill. For QMB enrollees, the state also handles cost-sharing payments to providers on your behalf.