Medicare Savings Programs (MSPs) and the Low-Income Subsidy (LIS) are two separate programs that provide financial assistance to individuals with limited income and resources to help them afford their Medicare-related expenses.
Medicare Savings Programs are federally funded State-administered programs that help pay for Medicare Part A and/or Part B premiums, deductibles, coinsurance, and copayments. The Medicare Savings Programs have four categories: Qualified Medicare Beneficiary (QMB) program, Specified Low-Income Medicare Beneficiary (SLMB) program, Qualified Individual (QI) program, and Qualified Disabled Working Individual (QDWI) program.
The Low-Income Subsidy, on the other hand, is a federal program that provides assistance with Medicare Part D prescription drug costs for individuals with limited income and resources. The program helps pay for Part D premiums, deductibles, and copayments.
Although the Medicare Savings Programs and Low-Income Subsidy have different eligibility requirements and cover different types of Medicare-related expenses, they are both designed to help individuals with limited income and resources pay their Medicare-related costs. If you qualify for one or both programs, you may be able to receive additional assistance with your Medicare expenses.
It’s important to note that the eligibility requirements and benefits for Medicare Savings Programs and the Low-Income Subsidy may vary by State and change from year to year.
What is a Low-Income Subsidy?
The Low-Income Subsidy (LIS), also known as “Extra Help,” is a program that provides assistance with Medicare prescription drug costs for people with limited income and resources. The program is designed to help individuals who have trouble paying their Medicare Part D premiums, deductibles, and prescription drug copayments.
To be eligible for the Low-Income Subsidy/Extra Help, you must have an annual income within 150% of the Federal Poverty Level and have limited assets (not including your home or car). If you are eligible for the program, you may receive reduced or eliminated Medicare Part D premiums, deductibles, and copayments.
You can apply for the Low-Income Subsidy through the Social Security Administration (SSA) by completing an application and providing proof of income and resources. You can apply online at www.ssa.gov, by phone at 1-800-772-1213, by visiting your local Social Security office, or contact your trusted insurance advisor for assistance filling out the application.
If you are eligible for Extra Help, it can be a valuable resource in helping pay for your prescription medications and managing your healthcare costs.
What are the criteria for determining the Low-Income Subsidy in 2023?
The criteria for determining if someone is eligible for the Low-Income Subsidy, also known as Extra Help, in 2023 may vary slightly from previous years and are subject to change. However, the following is an overview of the general eligibility requirements for Extra Help in 2023:
- Income: Your income must be at or below 150% of the Federal Poverty Level (FPL) for your household size. In 2023, the FPL is $14,580 for an individual and $19,720 for a married couple living together. This means that to be eligible for a Low-Income Subsidy/Extra Help, an individual’s income must be at or below $21,870, and a married couple’s income must be at or below $29,580.
- Resources: Your resources (also known as assets) must be below a certain limit, which is set at $16,660 for an individual and $33,240 for a married couple in 2023. Resources that count toward this limit include cash, savings, investments, and property. Do not include your primary residence, personal belongings, your vehicle, burial plot, and $1500 for burial expenses.
- Medicare Part D enrollment: You must be enrolled in a Medicare Part D plan (either a stand-alone Prescription Drug Plan or a Medicare Advantage plan with Prescription Drug coverage) to receive LIS. If you have Part A and/or Part B you are eligible to enroll in Part D.f
- U.S. citizenship or legal residency: You must be living in the U.S. or a legal resident to be eligible for LIS.
It’s important to note that these eligibility criteria are subject to change and may vary based on your specific circumstances and where you live.
What are Medicare Savings Programs?
Medicare Savings Programs (MSPs) are programs administered through each State that help individuals with limited income and resources pay for their Medicare premiums and cost-sharing expenses. These programs are federally and State-funded. The programs are designed to provide financial assistance to people who would otherwise struggle to pay their healthcare costs.
There are four types of Medicare Savings Programs:
- Qualified Medicare Beneficiary (QMB) Program: This program helps pay for Medicare Part A and Part B premiums, deductibles, coinsurance, and copayments. QMBs are also protected from being billed for Medicare costs that should have been covered by the program.
- Specified Low-Income Medicare Beneficiary (SLMB) Program: This program helps pay for Medicare Part B premiums. Individuals who are not eligible for QMB but have an income below a certain level may be eligible for SLMB.
- Qualified Individual (QI) Program: This program helps pay for Medicare Part B premiums. Eligibility for the QI program is determined on a first-come, first-served basis and is subject to funding availability.
- Qualified Disabled Working Individual (QDWI) Program: You may qualify for the QDWI Program if you: have a disability, are working, lost Your Social Security disability benefits and Medicare premium-free Part A because you returned to work. This program helps pay for Part A premiums only.
To be eligible for any of these Medicare Savings Programs, you must meet specific income and asset limits, which vary by State. You can apply for MSPs through your State’s Medicaid agency or through your local Social Security office.
If you are struggling to pay your Medicare premiums or other healthcare costs, the Medicare Savings Programs can be a valuable resource in helping you manage your healthcare expenses.
What are the criteria for Medicare Savings Programs in 2023?
Before we continue to look at the Guidelines that are the basis for Medicare Savings Programs, I do need to point out a couple of things. First, Centers for Medicare & Medicaid Services (CMS) sets the minimum criteria for program eligibility. Second, each State may decide to apply more liberal income and resource eligibility criteria. In other words, some States will follow the Federal limits exactly and some States will have more lenient criteria (basically, allowing more income and resources). In the future, I may endeavor to provide more information for each State’s limits.
The criteria for Medicare Savings Programs (MSP) in 2023 vary slightly from previous years and are subject to change. The CMS income and resource guidelines are for all 48 States, including DC and exclude Alaska* and Hawaii* as the Federal Poverty Levels in those two States are higher. The following is an overview of the general eligibility requirements for MSPs in 2023:
- Qualified Medicare Beneficiary (QMB) program: Your monthly income must be at or below 100% of the Federal Poverty Level (FPL) for your household size plus $20. In 2023, the annual FPL is $14,580 for an individual and $19,720 for a married couple living together. This means that to be eligible for the QMB program, an individual’s monthly income must be at or below $1235 (100% FPL + $20), and a married couple’s monthly income must be at or below $1664 (100% FPL + $20).
- Specified Low-Income Medicare Beneficiary (SLMB) program: Your income must be above 100% but at or below 120% of the FPL for your household size plus $20. In 2023, this means that an individual’s monthly income limit would be $1478 (100% FPL + $20), and a married couple’s monthly income limit would be $1992 (100% FPL + $20).
- Qualified Individual (QI) program: Your income must be above 120% but at or below 135% of the FPL for your household size plus $20. In 2023, this means that an individual’s monthly income limit would be $1661 (100% FPL + $20), and a married couple’s monthly income limit would be $2239 (100% FPL + $20).
In addition to the above income limitations, your resources must be no more than $9,090 for an individual and $13,630 for a married couple.
- Qualified Disabled and Working Individuals (QDWI) program: You must be disabled, under 65 years of age, and have lost your premium-free Part A coverage due to returning to work. You must meet income and resource guidelines. In 2023, a disabled working individual’s monthly income must be no more than $4945, and a married couple’s monthly income must be at or below $6659. These numbers are, also, based on a percentage of the FPL + $20 and includes additional earned income disregards.
QDWI resource limits of $4,000 for an individual and $6,000 for a married couple apply.
It’s important to note that these eligibility criteria are subject to change and may vary based on your specific circumstances and where you live. If you think you may be eligible for an MSP, you can apply through your State Medicaid agency or ask your trusted advisor if they can assist.
*To see income and resource requirements for Alaska and Hawaii, click here.