Medicare comes with costs that add up quickly - premiums, deductibles, copays, and prescription drug expenses. For seniors with limited income, those costs can be a real strain. What many people do not realize is that there are programs specifically designed to reduce those costs, and a significant number of eligible seniors are not enrolled in them.
This article explains the main programs available, who they are designed to help, and how to find out if you qualify.
Medicare Savings Programs
Medicare Savings Programs (MSPs) are state-run programs that help pay for Medicare costs including Part A and Part B premiums, deductibles, coinsurance, and copayments. According to Medicare.gov, there are four MSPs, each with its own eligibility level and coverage:
Qualified Medicare Beneficiary (QMB). The most comprehensive of the four. QMB generally helps pay Part A and Part B premiums, deductibles, coinsurance, and copayments. Providers who accept Medicare are generally not permitted to bill QMB enrollees for cost-sharing amounts.
Specified Low-Income Medicare Beneficiary (SLMB). Helps pay the Part B premium for those who do not qualify for QMB but have limited income.
Qualifying Individual (QI). Similar to SLMB but covers a slightly higher income range. QI assistance is funded on a first-come, first-served basis each year, so applications are worth submitting early.
Qualified Disabled and Working Individuals (QDWI). A narrower program for people under 65 who are working with a disability and need help paying Part A premiums.
Each program has income and resource limits that are updated annually. Because eligibility is income-based and limits can change year to year, checking current thresholds is the most reliable way to know whether you qualify. Medicare.gov publishes updated limits each year at medicare.gov/your-medicare-costs/get-help-paying-costs/medicare-savings-programs.
How to Apply for a Medicare Savings Program
Despite being closely tied to Medicare, MSP applications are not submitted through Medicare or Social Security. According to Medicare.gov, you apply for Medicare Savings Programs through your state Medicaid office.
To find your state Medicaid office:
- Visit medicare.gov and search for Medicare Savings Programs - the page includes a link to state contacts
- Call 1-800-MEDICARE (1-800-633-4227)
- Contact your local State Health Insurance Assistance Program (SHIP) counselor, who can guide you through the application at no cost
Enrolling in a Medicare Savings Program may also automatically qualify you for Extra Help with Part D costs (described below), so it is worth applying for both at the same time.
Extra Help (Low-Income Subsidy)
Extra Help, also called the Low-Income Subsidy (LIS), is a separate federal program that helps reduce the cost of Medicare Part D prescription drug coverage. According to the Social Security Administration (ssa.gov), Extra Help can significantly lower Part D premiums, deductibles, and copays for eligible enrollees.
People who are enrolled in a full-benefit Medicaid program or in QMB, SLMB, or QI automatically qualify for Extra Help. Others may qualify based on income and resources, even if they do not qualify for the MSPs above.
Extra Help applications can be submitted through the Social Security Administration. You may also have additional options for applying — contact Social Security or your local State Health Insurance Assistance Program (SHIP) counselor to learn the best way to apply in your area. You can apply:
- Online at ssa.gov/extrahelp
- By calling Social Security at 1-800-772-1213
- In person at your local Social Security office
Why Do These Programs Go Unused?
Most people eligible for Medicare Savings Programs and Extra Help simply don't know they exist. There is no automatic enrollment for most of these benefits, and Social Security and Medicare don't always proactively notify people who qualify. Many seniors also assume these programs are only for people with very low incomes — but the eligibility thresholds are higher than most expect.
The most common reason eligible seniors are not enrolled in these programs is simply not knowing they exist. Medicare Savings Programs and Extra Help are not prominently advertised, and the application process involves different agencies than most people expect.
Income and resource limits are also broader than many people assume. Seniors who consider themselves middle-income sometimes qualify, particularly as limits are updated each year. Checking eligibility costs nothing.
SHIP Counselors: Free Help Navigating These Programs
State Health Insurance Assistance Program (SHIP) counselors are trained specifically to help seniors understand Medicare costs and find programs that can reduce them. According to the SHIP Technical Assistance Center (shiptacenter.org), this service is available at no cost in every state and counselors are not affiliated with insurance companies.
A SHIP counselor can help you understand whether you likely qualify, which programs to apply for, and how to complete the process. This is one of the most useful resources available and one of the most underused.
Find your local SHIP counselor at shiptacenter.org or by calling 1-800-677-1116.
Where to Start
- Medicare Savings Programs overview: medicare.gov/your-medicare-costs/get-help-paying-costs/medicare-savings-programs
- Extra Help with Part D: ssa.gov/benefits/medicare/prescriptionhelp
- SHIP Counselors (free Medicare help): shiptacenter.org or 1-800-677-1116
- Eldercare Locator (find your AAA): eldercare.acl.gov or 1-800-677-1116
Eligibility income and resource limits for Medicare Savings Programs and Extra Help are updated annually. A SHIP counselor or benefits specialist through your local Area Agency on Aging can help you check current eligibility and navigate the application process at no cost.