Medicare is not free. Most people pay a monthly Part B premium, which is $202.90 in 2026 for most beneficiaries, along with deductibles, copays, and coinsurance. For people living on a modest fixed income, these costs can take a large share of each Social Security check. Medicare Savings Programs (MSPs) exist to help. Run by state Medicaid agencies with federal funding, these programs can pay Medicare premiums and, for the lowest-income enrollees, most out-of-pocket costs as well. Many eligible people never enroll because they do not know the programs exist or assume they earn too much. This guide explains how each program works, who qualifies, and how to apply.
What Medicare Savings Programs are
Medicare Savings Programs are four federal programs administered by each state’s Medicaid office:
- Qualified Medicare Beneficiary (QMB) program
- Specified Low-Income Medicare Beneficiary (SLMB) program
- Qualifying Individual (QI) program
- Qualified Disabled and Working Individuals (QDWI) program
Each has its own income limits and benefits. Federal rules set minimum standards, but states can use more generous rules, so eligibility varies by state.
The four programs
Qualified Medicare Beneficiary (QMB)
QMB is the most comprehensive program. It pays:
- The Part A premium, for people who owe one
- The Part B premium
- Part A and Part B deductibles, coinsurance, and copays
Importantly, providers who accept Medicare are not allowed to bill QMB enrollees for Medicare-covered services, beyond limited Medicaid copays in some states. This protection is known as the QMB billing prohibition. If a provider bills you, show your QMB status and contact Medicare.
Under federal standards, QMB generally requires income at or below 100% of the federal poverty level, plus a small income disregard.
Specified Low-Income Medicare Beneficiary (SLMB)
SLMB pays the Part B premium only. The federal income range is generally above 100% and up to 120% of the federal poverty level.
Qualifying Individual (QI)
QI also pays the Part B premium. The federal income range is generally above 120% and up to 135% of the federal poverty level. QI has some unique rules:
- Funding is limited, and applications are generally approved on a first-come, first-served basis.
- You must reapply each year.
- You cannot receive QI if you qualify for Medicaid.
Qualified Disabled and Working Individuals (QDWI)
QDWI pays the Part A premium for certain people under 65 with disabilities who lost premium-free Part A because they returned to work. Income limits are higher, at up to 200% of the federal poverty level, but it applies to a narrow group.
Income and resource limits
Federal poverty guidelines are updated each year, and Medicare Savings Program limits follow them, usually taking effect in the spring. States calculate income after a standard $20 general income disregard and sometimes other disregards, so people with income somewhat above the listed figures may still qualify. Earned income is treated more favorably than unearned income such as Social Security.
Resource (asset) limits
Federal rules also set limits on countable resources, such as bank accounts, stocks, and bonds. In recent years, the federal resource limit has been under $10,000 for an individual and under $15,000 for a married couple, adjusted annually. Many items are not counted, including:
- Your home
- One car
- Burial plots and a limited amount set aside for burial expenses
- Household goods and personal belongings
Several states have eliminated the asset test entirely or set higher limits, so check your state’s rules even if your savings are above the federal figures.
Why enrolling matters
The benefits can be substantial:
- Part B premium savings. Having the state pay the $202.90 monthly premium returns about $2,400 a year to your Social Security check.
- Protection from medical bills. QMB enrollees are shielded from Medicare cost-sharing, which can include a Part A hospital deductible of more than $1,600 per benefit period.
- Automatic Extra Help. People enrolled in any Medicare Savings Program automatically qualify for Extra Help, the federal program that lowers Medicare Part D prescription drug premiums, deductibles, and copays.
- Late enrollment penalty relief. In many cases, MSP enrollment can help people enroll in Part B outside normal enrollment periods, and Part B late enrollment penalties are generally waived for those whose premiums are paid by the state.
How Medicare Savings Programs work with other coverage
Medicaid
Some people qualify for both Medicare and full Medicaid, known as dual eligibles. Many dual eligibles are also enrolled in QMB or SLMB. Medicaid can then cover services Medicare does not, such as long-term care, depending on the state.
Medicare Advantage
You can be enrolled in a Medicare Savings Program and a Medicare Advantage plan. Your state pays your Part B premium, and QMB enrollees remain protected from Medicare cost-sharing for covered services. Some plans, called Dual Eligible Special Needs Plans (D-SNPs), are designed specifically for people with both Medicare and Medicaid.
Medigap
QMB enrollees generally do not need a Medigap policy, since QMB already covers Medicare cost-sharing. People in SLMB or QI still have cost-sharing and may weigh whether supplemental coverage is affordable.
An example
Consider Ruth, a 72-year-old widow whose only income is a modest Social Security benefit and who has a few thousand dollars in a savings account. Before enrolling, the Part B premium is deducted from her check each month, and a hospital stay would leave her owing the Part A deductible. After her state approves her for QMB, the state begins paying her Part B premium, so her Social Security deposit rises by that amount once the change is processed. If she is hospitalized, she is not responsible for the Medicare deductible or coinsurance. She is also enrolled automatically in Extra Help, which lowers her prescription drug costs. The exact figures depend on her state and her income, but the combined savings can amount to thousands of dollars a year.
How long approval takes to show up
Even after approval, it can take a few months for Social Security to stop deducting the Part B premium from your benefit. When the change takes effect, you may receive a refund of premiums the state should have paid. Keep your approval letter in case a provider or Social Security needs proof of your status.
How to apply
- Contact your state Medicaid office. Applications are handled by the state, often online, by phone, by mail, or in person at a local office.
- Gather documents. You may need your Medicare card, Social Security award letter, bank statements, proof of address, and information about other income or assets.
- Submit the application. Applying for Extra Help through Social Security can also start an MSP application, since Social Security shares that data with states.
- Watch for a decision. States must process applications within a set time frame, and QMB coverage typically starts the month after approval, while SLMB and QI can be retroactive for up to three months.
- Renew each year. Most programs require periodic renewal, and QI requires reapplying annually.
Free, unbiased help is available through your State Health Insurance Assistance Program (SHIP), which offers one-on-one Medicare counseling.
Common misconceptions
- “I have too much income.” Income disregards and state rules may let you qualify even if your income is above the federal figures.
- “I own a home, so I cannot qualify.” Your primary home is not counted as a resource.
- “The state will take my house.” Federal law exempts Medicare Savings Program benefits from Medicaid estate recovery.
- “It is the same as Medicaid.” MSPs are separate programs with different limits, and many enrollees do not have full Medicaid.
Related reading: Medicare IRMAA: How Income-Related Surcharges Work and How to Appeal Them and Special Enrollment Periods: How to Get Health Coverage Outside Open Enrollment.
Frequently Asked Questions
What does a Medicare Savings Program pay for?
Depending on the program, it pays the Part B premium and, for QMB enrollees, the Part A premium if owed plus Medicare deductibles, coinsurance, and copays.
What is the difference between QMB and SLMB?
QMB covers premiums and most Medicare cost-sharing for people with the lowest incomes. SLMB pays only the Part B premium for people with slightly higher incomes.
Do Medicare Savings Programs have an asset limit?
Federal rules set a resource limit adjusted each year, but many items such as your home and one car are not counted, and several states have eliminated the asset test.
If I qualify for a Medicare Savings Program, do I get Extra Help?
Yes. Enrollment in any Medicare Savings Program automatically qualifies you for Extra Help with Part D prescription drug costs.
Where do I apply for a Medicare Savings Program?
Apply through your state Medicaid office. Your State Health Insurance Assistance Program can help you complete the application for free.
This article is for general informational purposes only and is not legal, medical, tax, or financial advice. Rules vary by state and change over time; confirm details with the relevant agency or a licensed professional.
