Medicare Doesn't Have to Break the Bank
For many Americans, Medicare premiums, deductibles, and drug costs can strain a fixed income. Fortunately, several government programs exist to help lower-income beneficiaries reduce or even eliminate these expenses. This guide covers the most important assistance programs and how to apply.
Medicare Savings Programs (MSPs)
Medicare Savings Programs are state-run programs that help pay for Medicare costs including premiums, deductibles, and coinsurance. There are four types, each with different income and asset limits:
1. Qualified Medicare Beneficiary (QMB) Program
This is the most comprehensive MSP. If you qualify:
- Your state pays your Part A and Part B premiums
- Your state pays your deductibles, coinsurance, and copayments
- Providers cannot bill you for Medicare cost-sharing (a significant protection)
2. Specified Low-Income Medicare Beneficiary (SLMB) Program
- Your state pays your Part B premium
- Does not cover deductibles or coinsurance
- Income limits are slightly higher than QMB
3. Qualifying Individual (QI) Program
- Your state helps pay your Part B premium (partial or full assistance)
- Funding is limited — approved on a first-come, first-served basis each year
- You must apply annually to maintain benefits
4. Qualified Disabled and Working Individuals (QDWI) Program
- Covers the Part A premium for disabled individuals who have returned to work and lost premium-free Part A
- Narrowest eligibility — must be working and meet specific income requirements
How to Apply for Medicare Savings Programs
- Contact your state's Medicaid office — MSPs are administered at the state level
- You can also apply through your Social Security office
- Gather documentation: proof of income, bank statements, and Medicare card
- Income and asset limits vary by state, so check your state's specific rules
Tip: Enrolling in an MSP automatically qualifies you for Extra Help with Part D drug costs.
Extra Help (Low Income Subsidy — LIS)
Extra Help is a federal program that reduces the costs of Medicare Part D prescription drug coverage. It's one of the most valuable — and underutilized — programs available to Medicare beneficiaries.
What Extra Help Covers
- Reduces or eliminates your Part D monthly premium
- Lowers or eliminates your Part D deductible
- Reduces copayments for covered prescriptions significantly
- Eliminates the late enrollment penalty for Part D
Who Qualifies?
Eligibility is based on income and resources (assets). The Social Security Administration reviews applications and sets limits annually. Generally, individuals with limited savings and incomes below a certain percentage of the federal poverty level will qualify. Many people are surprised to find they are eligible.
How to Apply for Extra Help
- Apply online at SSA.gov
- Call the Social Security Administration at 1-800-772-1213
- Visit your local Social Security office
- Apply through your State Health Insurance Assistance Program (SHIP)
Medicaid and Dual Eligibility
If you qualify for both Medicare and Medicaid, you are considered "dual eligible." This status provides the broadest range of benefits:
- Medicaid may cover services Medicare doesn't, such as long-term care and dental
- Medicaid often pays your Medicare premiums and cost-sharing
- You may qualify for a Dual Eligible Special Needs Plan (D-SNP) — a specialized Medicare Advantage plan designed for this population
State Pharmaceutical Assistance Programs (SPAPs)
Many states operate their own programs to help residents pay for prescription drugs. These programs vary widely by state in terms of eligibility and what they cover. Contact your State Health Insurance Assistance Program (SHIP) to learn what's available in your state.
Don't Leave Benefits on the Table
Millions of Medicare beneficiaries qualify for financial assistance programs but never apply — often because they don't know these programs exist. If you're on a fixed income, it's worth taking the time to explore every option. A free SHIP counselor can walk you through your options at no cost.