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Medicare Savings Program

Overview

T + T

Background

HISTORY

There are four Medicare Savings Programs: the Qualified Medicare Beneficiary (QMB), the Specified Low Income Beneficiary (SLMB), the Qualified Individual (QI) and the Qualified and Disabled and Working Individual (QDWI).

Congress first enacted the Qualified Medicare Beneficiary benefit as part of the Medicare Catastrophic Coverage Act of 1988. This legislation required states to pay the Medicare premiums, deductibles and coinsurance for eligible Medicare beneficiaries with incomes below 100% of Federal Poverty Level (FPL). Subsequently the Omnibus Budget Reconciliation Act of 1990 required states to pay the Medicare Part B premium for those Medicare beneficiaries with incomes between 100% and 120% FPL through the SLMB program. And the Balanced Budget Act of 1997 required states to pay the Medicare Part B premium for Medicare beneficiaries with incomes between 120% and 135% FPL through the QI program. States have the option of implementing an asset test for these three benefits; however, New York State does not.

The QDWI program was established by the Omnibus Budget Reconciliation Act of 1990. This program assists those who qualify for Medicare because of a disability, but who lose their eligibility for premium-free Medicare Part A because they have worked and earned above a certain income for a specified period of time.

WHO ADMINISTERS THE PROGRAM

On the federal level the Center for Medicare and Medicaid Services (CMS) administers the Medicare Savings Programs. In New York State, the NYS Department of Health, Office of Health Insurance Programs administers all four of the Medicare Savings Programs. In NYC, the Human Resource Administration, the Medical Assistance Program (MAP) determines eligibility and oversees the application process and determines eligibility for all four programs.

FUNDING

Federal, state and local governments jointly fund the Medicare Savings Programs jointly. The administrative costs for three of the four programs Medicare Savings Programs (QMB, SLMB and QDWI) are split between the federal government (50%), the state government (25%) and the county (25%). The costs of the benefits for the QMB, the SLMB and the QDWI programs are split the same way. The costs of QI-1 benefits, however, are fully funded by the federal government.

The QMB, SLMB, and QDWI programs are entitlement programs, meaning anyone eligible for the benefit is entitled to receive it. Originally the QI program was funded by a federal block grant (a specific amount of money allocated to each state for eligible beneficiaries) and funding for the program had to be periodically reauthorized by Congress. In April 2015 through the Medicare Access and CHIP Reauthorization Act of 2015, the QI program became permanent and is no longer subject to reauthorization.

Summary of the Medicare Savings Programs

The Medicare Savings Program consists of four programs designed to assist Medicare-eligible participants with their out-of-pocket medical expenses, such as Medicare Part A and Part B premiums, co-insurance and deductibles. The programs have different benefit packages and have different eligibility criteria. Individuals apply for any of the Medicare Savings Programs at their local Medicaid office.