Struggling with Medicare’s $185 monthly premium and rising out-of-pocket costs? You might qualify for little-known government programs that cover these expenses entirely—even if your income seems too high or you have significant savings.
Key Takeaways
- The Medicare Savings Program (MSP) helps individuals with limited income and resources pay for Medicare costs, including premiums, deductibles, and coinsurance
- Four different MSP programs exist with varying income limits from $1,325 to $5,302 monthly for individuals in 2025
- Automatic enrollment in Extra Help prescription drug benefits can save thousands annually with copayments capped at $4.90 for generic drugs and $12.15 for brand-name drugs
- Some states like California have eliminated asset tests entirely, making more people eligible regardless of savings
- Applications must be submitted through your state’s Medicaid office, not directly through Medicare
Medicare Savings Programs Cut Your Healthcare Costs
Medicare coverage comes with out-of-pocket costs that can strain tight budgets. Part B premiums alone cost $185 monthly in 2025, plus deductibles, coinsurance, and copayments that add up quickly throughout the year. For Medicare beneficiaries living on fixed incomes, these expenses often force difficult choices between healthcare and basic necessities like food or utilities.
The Medicare Savings Program offers financial relief by covering these Medicare costs for qualifying individuals. These state-run programs work alongside Medicare to eliminate or reduce premiums, deductibles, and other out-of-pocket expenses. Medicare.org provides resources to help beneficiaries understand their coverage options and navigate the application process.
Beyond immediate cost savings, MSP enrollment automatically qualifies participants for Extra Help with prescription drug costs through Medicare Part D. This dual benefit can save thousands of dollars annually while ensuring access to necessary medications and medical care.
Four Medicare Savings Programs Available
Each Medicare Savings Program targets different income levels and provides specific types of assistance. Understanding these distinctions helps determine which program might offer the best support for individual circumstances.
1. Qualified Medicare Beneficiary (QMB) – Most Coverage
The QMB program provides the most extensive financial assistance among all Medicare Savings Programs. It covers Part A premiums for those who don’t qualify for premium-free coverage, plus all Part B premiums, deductibles, coinsurance, and copayments for Medicare-covered services. Healthcare providers cannot bill QMB participants for these covered costs, and participants may only face small Medicaid copayments when applicable. This coverage makes QMB the most valuable program for those who qualify based on the lowest income thresholds.
2. Specified Low-Income Medicare Beneficiary (SLMB) – Part B Premium Help
SLMB focuses specifically on covering Medicare Part B premiums, which saves participants $2,220 annually at current rates. While it doesn’t cover deductibles or copayments like QMB, SLMB still provides significant financial relief. Participants must have both Part A and Part B to qualify, and the program serves those whose income falls slightly above QMB limits but still needs assistance with Medicare costs.
3. Qualifying Individual (QI) – Limited Part B Premium Assistance
The QI program also covers Part B premiums but operates on a first-come, first-served basis with limited funding. Participants must reapply annually, and priority goes to previous year recipients. States process applications chronologically until funding runs out, making early application necessary. QI serves individuals who don’t qualify for other Medicaid benefits but need help with Medicare premiums.
4. Qualified Disabled & Working Individual (QDWI) – Part A for Working Disabled
QDWI specifically helps disabled individuals who returned to work and lost premium-free Part A coverage along with Social Security disability benefits. This program only covers Part A premiums but allows much higher income limits to account for work earnings. QDWI recognizes that returning to work shouldn’t completely eliminate Medicare assistance for people with disabilities.
2025 Income and Asset Limits
Income and asset limits determine MSP eligibility and are updated annually. These federal guidelines serve as baselines, though many states set more generous limits or modify asset requirements to help more residents qualify.
QMB Income Limits: $1,325 Individual, $1,783 Couple
QMB sets the strictest income requirements at $1,325 monthly for individuals and $1,783 for married couples in 2025. Asset limits allow $9,660 for individuals and $14,470 for couples. These limits include a standard $20 income disregard, meaning the first $20 of monthly income doesn’t count toward the threshold. SNAP benefits also receive exclusion from income calculations.
SLMB Income Limits: $1,585 Individual, $2,135 Couple
SLMB allows slightly higher incomes at $1,585 monthly for individuals and $2,135 for married couples, with the same asset limits as QMB. This income range captures individuals who exceed QMB thresholds but still struggle with Medicare Part B premiums. The additional $260 monthly income allowance for individuals can make the difference between qualifying and missing out on $2,220 in annual premium savings.
QI Income Limits: $1,781 Individual, $2,380 Couple
QI permits the highest income among premium assistance programs, with limits of $1,781 for individuals and $2,380 for couples monthly. Asset limits remain consistent with QMB and SLMB at $9,660 and $14,470 respectively. These higher thresholds help middle-income seniors who don’t qualify for other assistance but find Medicare premiums burdensome on fixed incomes.
QDWI Higher Limits Account for Work Income
QDWI recognizes work income by setting much higher limits at $5,302 monthly for individuals and $7,135 for couples. However, asset limits drop to $4,000 for individuals and $6,000 for couples, reflecting the program’s focus on working individuals rather than those with accumulated savings. These limits encourage workforce participation while maintaining Medicare coverage.
State Variations Make You Eligible Even Above Federal Limits
States have flexibility to expand MSP eligibility beyond federal minimums, creating opportunities for more beneficiaries to receive assistance. These variations can significantly impact qualification chances depending on residence location.
California Eliminates Asset Tests
California has completely eliminated asset testing for MSP eligibility, allowing individuals with any amount of savings, investments, or property to qualify based solely on income. This progressive approach recognizes that asset limits often penalize responsible savers and homeowners who still struggle with healthcare costs. Massachusetts follows a similar approach with no asset limits for MSP programs.
Excluded Assets Don’t Count Against You
Certain assets receive universal exclusion from MSP calculations across all states. Primary residences never count toward asset limits, regardless of value, protecting homeowners from losing eligibility due to property appreciation. One vehicle per household also receives exclusion, along with burial plots and life insurance policies with cash values under $1,500. These exclusions ensure that basic necessities and end-of-life planning don’t disqualify otherwise eligible individuals.
Automatic Extra Help Saves Thousands on Prescriptions
MSP enrollment triggers automatic qualification for Medicare Part D Extra Help, creating substantial additional savings on prescription medications. This automatic benefit eliminates the need for separate applications while providing drug cost assistance.
Medicare Part D Low Income Subsidy Qualification
Extra Help covers Medicare Part D premiums, deductibles, and most copayments for prescription drugs. The Social Security Administration estimates this benefit saves participants an average of $5,000 annually on medication costs. MSP participants avoid late enrollment penalties if they join Part D after the initial enrollment period, removing barriers to prescription coverage.
Maximum Drug Copayments in 2025
Extra Help participants pay no more than $4.90 for generic drugs and $12.15 for brand-name drugs in 2025, regardless of the medication’s actual cost. These low copayments make medications affordable for people managing chronic conditions like diabetes, heart disease, or arthritis on limited budgets.
Apply Through Your State Medicaid Office Today
MSP applications must be submitted through state Medicaid agencies, not directly through Medicare or Social Security. Each state manages its own application process and eligibility determination, though the core requirements remain consistent across jurisdictions. Contact your state’s Medicaid office directly for application forms and assistance, or reach out to your local State Health Insurance Assistance Program (SHIP) for free, unbiased guidance through the application process.
Even if income or assets appear to exceed federal limits, applying remains worthwhile due to state variations and excluded asset categories. Many states don’t count certain income types or offer higher thresholds than federal minimums. The application process also helps identify other potential benefits and assistance programs that might provide additional support.