Seniors who can’t afford to pay their Medicare premiums and other medical costs may be able to get some assistance from their states. There are four different Medicare Savings Programs (MSPs) that help pay some or all of a senior’s Medicare premiums and may also pay Medicare deductibles, copayments and coinsurance.
Do Low-Income Seniors Have to Pay for Medicare?
Most Medicare beneficiaries get what is called “premium-free Part A” because they paid a certain amount of Medicare taxes while working. Those who do not qualify for free Part A benefits have the option to buy this coverage. Medicare Part A premium amounts depend on how long a beneficiary worked and paid Medicare taxes. In 2021, Part A premiums are either $259 or $471 per month.
When it comes to Part B premiums, things function a little differently. Everyone pays a premium for Medicare Part B, which is based on a beneficiary’s modified adjusted gross income (MAGI) as reported on their IRS tax return from two years ago. Beneficiaries who receive Social Security, Railroad Retirement Board or Office of Personnel Management benefits have their Part B premiums automatically deducted from these payments each month. In 2021, the standard premium for Medicare Part B is $148.50 for beneficiaries whose MAGI on their 2019 tax return was $88,000 or less for individuals and those married filing separately or $176,000 or less for those who filed jointly.
Of course, most Medicare beneficiaries live on limited incomes that fall well below the lowest threshold of $88,000. According to a Kaiser Family Foundation report, the most recent annual income data available shows that half of all Medicare beneficiaries had incomes below $26,200 in 2016. One-quarter of beneficiaries had income below $15,250. The $148.50 Part B premium alone adds up very quickly for seniors like these. Fortunately, there are programs that help with Medicare premiums.
How to Get Help Paying Medicare Premiums
Medicaid administers four kinds of Medicare Savings Programs available to dually eligible beneficiaries who need help covering out-of-pocket health care costs. The key qualification for all these programs is currently having (or at least being eligible for) Medicare Part A. From there, each program sets its own monthly income and resource limits, and additional eligibility requirements may apply.
Monthly income limits are based on the U.S. Federal Poverty Guidelines (often referred to as FPL). These guidelines are updated each year but may not be published until late January or even February. According to the National Council on Aging (NCOA), “until formal publication of these figures by Social Security and Medicare, states may continue to use the previous year’s eligibility guidelines until March.” It is also important to note that individual states can choose to apply more generous income caps for these programs.
When it comes to resource allowances, certain states, such as New York, do not set asset limits for their MSP programs, and those that do only “count” certain kinds of assets. Countable assets include money in checking and savings accounts and investments like stocks and bonds. Resources that are not counted include one home, one car, a burial plot, up to $1,500 put aside for burial expenses, furniture and personal items.
Each program is described in further detail below. Keep in mind that the income and resource limits may vary slightly from state to state. If you believe you may be eligible, it is worth applying or at least checking with your state’s Medicaid agency regarding specific financial eligibility criteria, even if your income and resources are higher than the 2021 thresholds listed here.
Types of Medicare Savings Programs
Qualified Medicare Beneficiary Program (QMB)This program is the most comprehensive and helps beneficiaries pay for Medicare Part A and Part B premiums as well as coinsurance, deductibles and copayments. To qualify, the monthly income and annual resource limits for an individual are $1,094 and $7,970, respectively. For a couple, the income and resource limits are $1,472 and $11,960, respectively.
Specified Low-Income Medicare Beneficiary Program (SLMB)The SLMB program only helps beneficiaries pay their Part B premiums. To qualify, the monthly income and annual resource limits for an individual are $1,308 and $7,970, respectively. For a couple, the income and resource limits are $1,762 and $11,960, respectively.
Qualifying Individual Program (QI)This program only helps cover beneficiaries’ Part B premiums. It is not open to people who qualify for Medicaid. To qualify for the QI program, the monthly income and annual resource limits for an individual are $1,469 and $7,970, respectively. For a couple, the income and resource limits are $1,980 and $11,960, respectively.
Medicare beneficiaries must re-apply for the QI program each year, and help is granted on a first-come, first-served basis. Individuals who already receive QI benefits are given priority over those who apply for the first time.
Qualified Disabled Working Individuals Program (QDWI)The QDWI program is more complex and less common than the others. It only provides assistance with paying for Medicare Part A premiums. A beneficiary may be eligible if they are under age 65, have a disabling impairment, lost their free Medicare Part A when they successfully returned to work and do not qualify for Medicaid. Eligible individuals must also meet income and resource requirements. The monthly income and annual resource limits for an individual are $4,379 and $4,000, respectively. For a couple, the income and resource limits are $5,892 and $6,000, respectively.
Medicare beneficiaries who are eligible for the QMB, SLMB and QI programs also qualify automatically for another program called Extra Help. Extra Help provides assistance with the costs of Medicare prescription drug coverage (Part D).
Applying for Help With Medicare Premiums
Additional information about these programs is available online. Visit the Centers for Medicare & Medicaid Services (CMS) website for information regarding Medicare Savings Programs (MSPs) and the Social Security Administration’s website for additional information on the Extra Help program. You can also contact your local Area Agency on Aging, Social Security office or state Medicaid agency for state-specific information and assistance with applications.
Sources: Part A Costs (https://www.medicare.gov/your-medicare-costs/part-a-costs); Part B Costs (https://www.medicare.gov/your-medicare-costs/part-b-costs); Income and Assets of Medicare Beneficiaries, 2016-2035 (https://www.kff.org/medicare/issue-brief/income-and-assets-of-medicare-beneficiaries-2016-2035/); Medicare Savings Programs (MSPs): Eligibility and Coverage (2020) (https://d2mkcg26uvg1cz.cloudfront.net/wp-content/uploads/medicare-savings-programs-coverage-and-eligibility.pdf); NY Medicare Savings Program (MSP) (https://www.health.ny.gov/health_care/medicaid/program/update/savingsprogram/); Medicare Savings Programs (https://www.medicare.gov/your-medicare-costs/get-help-paying-costs/medicare-savings-programs); Medicare Savings Programs Eligibility and Coverage Chart (https://www.ncoa.org/resources/medicare-savings-programs-eligibility-and-coverage-chart/); Seniors & Medicare and Medicaid Enrollees (https://www.medicaid.gov/medicaid/eligibility/seniors-medicare-and-medicaid-enrollees/index.html)