What to Know About Medicare Savings Programs

If your household income and resources fall below certain levels, you may qualify for one of five federally funded programs to help you pay Medicare costs.

These programs were created because not everyone reaches retirement age with the same ability to handle expenses like Medicare premiums, copays, coinsurance, deductibles, and the cost of prescription drugs.

In 2018, the U.S. Census Bureau predicted that by 2034, 77 million Americans will be 65 years or older. Yet some stark disparities in retirement income exist between racial and ethnic groups in the United States.

According to 2016 data analyzed by researchers at the Federal Reserve, just 34 percent of Black families and 30 percent of Hispanic or Latino families have retirement accounts to help them pay their living expenses, compared with 60 percent of white families.

The gap in average net worth at retirement age is even wider: $933,000 for white families, compared with $138,000 for Black families and $191,000 for Hispanic or Latino families.

Medicare offers several savings programs for people with lower retirement income. These programs may make it easier to get good healthcare as you grow older. They’re run by Medicaid in the state where you live.

These four Medicare savings programs are funded by the federal government but operated by Medicaid in each state:

• Qualified Medicare Beneficiary (QMB) program
• Specified Low-Income Medicare Beneficiary (SLMB) program
• Qualifying Individual (QI) program
• Qualified Disabled and Working Individual (QDWI) program

The income requirements for Medicare savings programs in 2021 are summarized in the following table:

• Healthcare providers may not bill you. If you are in the QMB program, your healthcare providers aren’t allowed to bill you for the care you receive — Medicaid will pay them directly. If you are wrongly billed for a healthcare service, make sure the doctor knows you’re in the QMB program. Then, contact Medicare to let them know you’re being billed for the service.
• You must qualify. To qualify for the QDWI program, you must be disabled, working, and under 65 years old. If you went back to work and lost your premium-free Medicare Part A coverage, and if you’re not getting medical help from your state right now, you may be eligible for the QDWI program.
• You must enroll each year. If you’re enrolled in Medicaid, you won’t be able to get QI benefits. If you apply for the QI program and you’re accepted, you’ll need to reapply every year.
• There may be a delay before benefits begin. Once you’re accepted, it can take a couple of months before Medicaid begins paying your premiums. Medicaid will reimburse you for any premium payments you made while Medicaid was supposed to be paying.

If you’re eligible for Medicare and your income and resources are at or below the limit for a Medicare savings program, you can apply by contacting the Medicaid office in your state.

You should receive an update on the status of your application within 45 days. If Medicaid denies your application, you may be able to file an appeal.

Here are some steps you can take to apply for a Medicare savings program:

• Familiarize yourself with the kinds of questions you may be asked when you apply. The form is available in multiple languages.
• Before you begin applying, gather supporting documents such as your Social Security and Medicare cards, proof of your address and citizenship, bank statements, IRA or 401k statements, tax returns, Social Security awards statements, and Medicare notices.
• To apply for the a program, you’ll need to contact your state Medicaid office. You can check online to find your state’s office locations, or call Medicare at 800-MEDICARE.
• Once you submit your application, you should receive a confirmation or denial within about 45 days. If you’re denied, you can request an appeal. Enrollment in any of these programs must be renewed each year.
• Reach out to your State Health Insurance Assistance Program (SHIP) if you have any questions or need additional assistance.

If you qualify for the QMB, SLMB, or QI programs, you’ll automatically be enrolled in the Extra Help program, too. This program will help you pay all the premiums, deductibles, and coinsurance for a Medicare Part D prescription drug plan.

If you have Extra Help, you’ll always pay either your Extra Help copay or your Part D cost for your prescriptions, whichever is less.

It’s possible to get partial support from Extra Help. People with partial Extra Help pay lower premiums, deductibles, and copays. Plus, they pay just 15 percent of the cost of prescription medications until they meet their annual out-of-pocket limit.

Medicare Part D plans are offered by private insurance companies. Each insurer will have different requirements for which documents you need to provide to show your eligibility.

Some examples of the kinds of documentation you might be asked to provide include:

• notice from Medicare saying you’re qualified (purple)
• Extra Help notice of award from Social Security
• Medicare automatic enrollment notice (green/yellow)
• notice from Medicare about a change in your copay (orange)
• proof that you have Medicaid

Medigap (Medicare supplement)

Medigap plans are private insurance policies that help you pay your Medicare costs, including copays, coinsurance, and deductibles. You can choose from among 10 plans, and each plan offers the same coverage nationwide.

Starting in 2020, though, you won’t be able to enroll in a Medigap plan that pays your Part B premiums as a new enrollee. To take a look at the different costs and coverage options, you can use Medicare’s plan compare tool.

Medicaid

This program is a health safety net jointly run by federal and state agencies. It offers the same services as Medicare, plus some additional benefits like nursing home care and personal care.

PACE

The Program for All-inclusive Care for the Elderly (PACE) can get you the medical care you need at a PACE center in your area, in your home, or in your community, so you don’t have to go to a nursing home.

Here are just a few of the services PACE beneficiaries may receive:

• adult day care
• dentistry
• home care
• hospital care
• lab work
• physical or occupational therapy
• social work counseling
• meals
• medical specialty services

PACE centers are not available everywhere. To find out if your state operates a PACE center near you, contact your state Medicaid office.

• Medicare savings programs help people with lower income pay their Medicare Part A and Part B premiums, deductibles, copays, and coinsurance.
• To qualify, your monthly income must be at or below a certain limit for each program, and your household resources cannot exceed certain limits.
• If you qualify for one or more of these programs, you may also qualify for Extra Help. This program helps lower the cost of your prescription drugs.
• Although these programs are federally funded, they are run by state Medicaid programs. To apply, you can contact the Medicaid office in your state or complete an online application.
• You can also cut your Medicare costs by applying for Medicaid, enrolling in PACE, or purchasing a Medigap policy.
• It may take some time to gather the necessary documentation and fill out the appropriate applications, but these savings programs could make it possible for you to get the healthcare you need at a cost you can afford.