Medicare Savings Program Rules, Benefits And Options

What is the Medicare Savings Program?

Medicare is a useful tool for getting affordable health insurance. However, it's not without its costs. Medicare premiums are too expensive for many Americans. The Medicare Savings Program helps solve this problem.

For those who qualify, the Medicare Savings Program (MSP) can help pay for some or all of your Medicare premiums. The MSP helps you pay for Medicare when you might not otherwise be able to stay in the system. This helps you stay healthy, regardless of your age or income.

The Medicare Savings Program is available for low-income individuals with Medicare coverage. Eligibility for the Medicare Savings Program is often linked to eligibility for Medicaid. However, you don't have to be on Medicaid to qualify for the Medicare Savings Program.

How Does the Medicare Savings Program Work?

When you're in the Medicare Savings Program, your state will pay for some of your Medicare premiums and possibly some of your medical expenses. The amount your state pays depends on your income and working status.

There are four levels of subsidy:

1. Qualified Medicare Beneficiary Program

2. Specified Low-Income Medicare Beneficiary Program

3. Qualifying Individual Program

4. Qualified Disabled and Working Individuals Program

Qualified Medicare Beneficiary Program

The Qualified Medicare Beneficiary Program (QMBP) is available for those with the lowest income and assets. People who meet the QMBP limits are often referred to as "full-dual" because they also qualify for Medicaid.

In order to qualify for QMB you have to meet certain income requirements. In 2020, those are:

• Individual monthly income limit of $1,084

• Married couple monthly income limit of $1,457

• Individual resource limit of $7,860

• Married couple resource limit of $11,800

When you're in the QMBP, your state will pay:

• Your Part A premium

• Your Part B premium

• Copayments, coinsurance, and deductibles for services

The QMBP represents the maximum subsidy level, and your out-of-pocket costs for services and prescription drugs will be very low.

Specified Low-Income Medicare Beneficiary Program

The Specified Low-Income Medicare Beneficiary Program (SLIMBP) is for people who qualify for Medicaid but have income that exceeds the QMBP thresholds. Under the SLIMBP, your state will pay your Medicare Part B premium each month.

Qualifying Individual Program

The Qualifying Individual Program (QIP) is only available if you don't qualify for Medicaid. Under the QIP, your state will pay for your Medicare Part B premium.

Qualified Disabled Working Individuals Program

The Qualified Disabled Working Individuals Program (QDWIP) is for people who are under 65, disabled but working, and have lost premium-free Part A due to resuming work. Your state will pay your Part A premium when you meet the QDWIP criteria.

How Does the Medicare Savings Program Work With Private Medicare Plans?

The Medicare Savings Program has a limited impact on private option Medicare plans. The only impact is if you qualify for Medicaid. When you qualify for Medicaid, your access to some private plans may change.

Medicaid and Medicare Supplement Insurance

Generally, you are not allowed to buy Medicare Supplement insurance, also called Medigap, when you have Medicaid. There are two reasons for this.

1. First, when you qualify for both Medicare and Medicaid, your out-of-pocket costs for health insurance are very small, in many cases $0. You don't need supplemental coverage in this case.

2. Also, Medicare Supplement insurance plans charge a monthly premium. Medicaid serves individuals and families with limited income. The premium for a Medigap plan would eat up a high percentage of your income if you're on Medicaid.

Medicare Advantage and Prescription Drug Plans

The Medicare Savings Program works very well with these plans. The Qualified Medicare Beneficiary Program is especially well suited to work with these private plans.

For instance, when you are in the QMBP, your prescription drug costs are limited if you have Part D drug coverage. You can get Part D coverage from either a standalone prescription drug plan or a Medicare Advantage plan (MAPD plan).

Under the QMBP, your prescription costs are severely limited (no more than $3.80 per prescription in 2019). However, you must be enrolled in a Medicare Part D plan to reap this benefit.

As a Qualified Medicare Beneficiary, doctors and facilities are not allowed to charge you copays or coinsurance for any Medicare-covered service. You'll pay $0 for every covered procedure.

Some Medicare Advantage plans are designed specifically for people on Medicaid. Medicare Advantage plans also offer benefits beyond what Original Medicare or Medicaid offer.

In many cases, you can get access to:

• Gym memberships

• Transportation to or from medical appointments

• Coverage for acupuncture or chiropractic care

• Access to more comprehensive dental coverage than is available through Medicaid

Take Advantage of Medicare Savings

The Medicare Savings Program offers many options to cut costs on Medicare. Depending on your income and asset level, you may not have to pay any premiums for Medicare coverage. Additionally, combining Medicare Advantage with the Medicare Savings Program can give you extra benefits at no cost.

If you think you might qualify for one of the Medicare Savings Programs, you can apply with your state. To see which Medicare Advantage or prescription drug plans are available in your area or to compare quotes, connect with a licensed Medicare professional. They can assist you with any additional questions you may have about the Medicare Savings Program and offer helpful tips on how to save on healthcare coverage.

Joseph Arroyo is a licensed Medicare insurance specialist who lives in Hilton Head, South Carolina. Arroyo is certified to sell Medicare products including Medicare Supplement insurance, Medicare Advantage, and prescription drug plans.