Medicare Savings Programs (MSPs) are programs administered by State Medicaid agencies to assist Medicare beneficiaries with limited income and resources in paying for some of the costs of Medicare. The type and amount of assistance that MSP-eligible beneficiaries receive depend on the level of MSP for which each beneficiary qualifies. The levels of MSP are:

QMB (Qualified Medicare Beneficiary Program)

The QMB program covers the following costs:

• Medicare Part A monthly premium (when applicable)
• Medicare Part B monthly premium and annual deductible
• Co-insurance and deductible amounts for services covered under both Medicare Parts A and B

SLMB (Specified Low-Income Medicare Beneficiary Program)

The SLMB program covers the following costs:

• Medicare Part B monthly premium

QI (Qualified Individual Program)

The QI program covers the following costs:

• Medicare Part B monthly premium

There are specific eligibility criteria (income and assets) that distinguish each category of MSPs. Federal standards for these programs exist, though some states have set more flexible standards. More information about these programs and their eligibility criteria is available from the Center for Medicare Advocacy.

Medicare is the primary payer for all beneficiaries with QMB. Medicaid pays second for QMBs. This applies to QMBs enrolled in Medicare Advantage plans (including SNPs). The Medicare coverage (i.e., the MA plan) is the primary payer. Medicaid pays second for QMBs receiving Medicare-covered services from MA plans, including SNPs. MA plans may cover some Medicaid services that are not Medicare services, so in those cases Medicaid provides coverage for those services.

D-SNPs with state Medicaid contracts will have an opportunity to receive from the state some sort of payment (e.g., capitation) to provide Medicaid services for those dual-eligible enrollees. Many consider this to be the "purpose" of the contractual relationship between a D-SNP and Medicaid.

MIPPA changed the resource limits for Medicare Savings Programs (MSPs) to match the resource limits for the full Part D low-income subsidy (LIS). This change will go into effect in 2010. At this point, CMS has not released the updated figures for 2010.

Though we do not know the actual numbers for 2010, we can look to 2009 for a model. In 2009, the LIS resource limits for the full subsidy are $8,100/single and $12,910/couple. If the MIPPA changes had been in place in 2009, MSP asset amounts in 2009 would equal these amounts.

For more information about MIPPA changes related to LIS and MSPs in 2010, see HAP’s MIPPA Fact Sheet.

The answer to this question depends on a state’s income rules for Medicaid. The Omnibus Budget Reconciliation Act (OBRA) of 1986 gives states the option of extending Medicaid to aged and disabled individuals with income up to 100 percent of the federal poverty level (FPL). However, many states use more restrictive income eligibility standards than this amount.

For states which use a higher income standard for aged and disabled people in Medicaid, most individuals with income below 100 percent will qualify for Medicaid. For states with lower income levels for eligibility, individuals with income below 100 percent (but higher than the Medicaid standard) may qualify only for the QMB program.

In order to qualify for the highest subsidy (i.e., the lowest cost sharing), a beneficiary has to have BOTH full Medicaid benefits AND income below 100 percent FPL. This means that two clients with identical income and assets who live in different states may fall into different categories of low-income subsidy.

For example, a beneficiary with limited assets has income at 80 percent of FPL ($722 per month). If she lives in Georgia, she will qualify for QMB and will pay cost sharing of $2.40/$6.00 (in 2009) for her Part D drugs. If, on the other hand, she lives in Massachusetts, she will qualify for full Medicaid and will pay cost sharing of $1.10/$3.20 (in 2009) for her Part D drugs.

For more information, see HAP's Medicare Drug Coverage: Extra Help for Low-Income Beneficiaries chart.