Medicare Savings Program

What it means

Medicare is not free. The Part B premium is deducted from Social Security every month, and for somebody on a modest income it is a meaningful proportion of it. Medicare Savings Programs pay that premium for people below an income threshold, and the more generous tiers also pay the deductibles and coinsurance.

They are administered by state Medicaid agencies rather than by Medicare, and they go by initials — QMB, SLMB, QI — which correspond to descending levels of help at ascending income limits. Somebody who does not qualify for one tier may qualify for the next.

Qualifying for any of them automatically qualifies the person for Extra Help with prescription costs, which is why the two are normally applied for together. Under the most generous tier, providers are also barred from billing the person for Medicare cost-sharing at all.

Several states have removed the asset test entirely, and others apply limits considerably higher than the program's reputation suggests. Assuming ineligibility without checking is a frequent reason somebody who qualifies is not enrolled.

Why it matters

It puts the Part B premium back into a monthly income, which for many households is the largest single available improvement.

It is the gateway to Extra Help, so one application resolves both the premium and the prescription costs.

When you are likely to meet it

• When a parent's income is modest and the Part B deduction is a real burden.
• When somebody is choosing between medication and other necessities.
• When applying for Extra Help, which asks whether these have been considered.

How this varies by state

Income limits follow the federal poverty level and change annually. Whether there is an asset test, and how high it is, is a state decision.

Related terms

• Extra HelpA federal subsidy that pays most of the cost of Medicare prescription drug coverage.
• MedicaidA joint federal and state program that pays for health care, including long-term care, for people with limited income and assets.
• MedicareThe federal health insurance program for people aged sixty-five and over, and for some younger people with disabilities. It does not pay for long-term care.
• Medicare Part DMedicare's prescription drug coverage, bought as a separate plan from a private insurer.
• MedigapA private policy that pays some of what Original Medicare leaves the patient to pay. It cannot be combined with a Medicare Advantage plan.

Official sources

The authority this page describes, at the agency that publishes it. Sahvelo does not restate a rule from a secondary source.

• Medicare — the parts of Medicare (opens in a new tab)

Sahvelo guidance that uses this

• Medicare