Medicare Cost Assistance

What Medicare Cost Assistance covers

There are two main categories of Medicare income assistance. Medicare Savings Programs (MSPs) are run by states and help pay Part A and Part B costs, including the Part B premium, deductibles, and coinsurance. The Extra Help program (also called the Low Income Subsidy, or LIS) is run by Social Security and helps pay Part D drug costs including premiums, deductibles, and copayments.

• Part B premium: Paid in full or in part depending on which Medicare Savings Program you qualify for.
• Part A and Part B deductibles: Covered by the higher-tier savings programs.
• Part A and Part B coinsurance: Covered by Qualified Medicare Beneficiary (QMB) status, so providers cannot bill you.
• Part D premium: Extra Help can reduce or eliminate your monthly drug plan premium.
• Part D cost-sharing: Copayments as low as a few dollars per prescription with full Extra Help.

Who it is for

Income limits change yearly and vary by state for the Medicare Savings Programs. Many people who qualify are not enrolled because they do not know these programs exist or assume they will not qualify. Your licensed insurance agent will check eligibility at no cost to you, and if you qualify, we will help you apply.

What you pay for Medicare

This page is one of our Medicare coverage options. Your Medicare costs and premiums come from several places at once, which is why a single monthly figure is rarely the whole picture. Part A is hospital insurance and most people pay no premium for it, though some must buy it. Part B is medical insurance, and most people pay a monthly premium, a yearly deductible and then 20% coinsurance on most services. Drug coverage adds a Part D premium plus a copayment for each prescription. In 2027, out-of-pocket costs for covered Part D drugs are capped at $2,400 a year, and covered insulin costs no more than $35 a month. The standard 2027 Part B premium and deductible have not been announced by CMS yet. These costs apply whether you keep Original Medicare or join a Medicare Advantage plan, and higher earners pay more for Parts B and D: here is how income affects Medicare costs.

Medicare Savings Programs

Medicare Savings Programs are run by state Medicaid offices, and each one helps people with limited income and resources pay their Part A and Part B costs. There are four, and which one you qualify for decides how much of your cost sharing is covered.

• Qualified Medicare Beneficiary (QMB): Pays the premiums for Parts A and B, plus deductibles, coinsurance and copayments for Medicare-covered services. Providers may not bill you for that cost sharing.
• Specified Low-Income Medicare Beneficiary (SLMB): Pays the Part B premium. It does not cover other cost sharing.
• Qualifying Individual (QI): Also pays the Part B premium, but you must reapply every year, and help is given first come, first served while state funds last.
• Qualified Disabled and Working Individual (QDWI): Pays the Part A premium for certain people under 65 with a disability who lost premium-free Part A after returning to work. It has its own income and resource rules.

The income limits, and why you should apply anyway

Each program has income and resource limits tied to the federal poverty level. The federal floor is reset every year, but many states use higher limits and some do not count assets at all, so the number that matters is your state's, not the national one. The 2027 figures are published after the new federal poverty guidelines come out early in the year, so they are not available yet. Apply even if you think you are slightly over: some income and resources, including your home and one vehicle, usually do not count. One more reason to apply is easy to miss. If you qualify for a savings program, your state can enroll you in Part B outside the usual windows, which can spare you a Part B late enrollment penalty that would otherwise last for life. See Medicare Savings Programs by state for the rules where you live.

Extra Help with prescription drugs

Extra Help, also called the Part D Low-Income Subsidy, helps pay for a Part D plan: all or part of the monthly premium, the deductible, and what you pay for each prescription. Since 2024 the full benefit has been open to people with income up to 150% of the federal poverty level who meet the resource limit, though the 2027 limits and copay amounts have not been published yet. Here is the shortcut worth knowing: if you qualify for a Medicare Savings Program, have full Medicaid, or receive Supplemental Security Income, you get Extra Help automatically and no separate application is needed. Everyone else applies through the Social Security Administration online, by phone or at a local office, at no cost. Approval also lets you change drug plans more often than once a year. Our guide goes through what Extra Help covers in more detail, and there is more on prescription drugs and Medicare if you are still deciding on a plan.

Medicaid and dual eligibility

Some people qualify for both Medicare and Medicaid, which is called dual eligibility. The difference between Medicare and Medicaid matters here: Medicare is federal health insurance based mostly on age or disability, while Medicaid is a joint federal and state program based on income and need. For someone who has both, Medicaid can pay Medicare premiums and cost sharing, and may cover services Medicare does not, such as long-term care. Eligibility rules and covered services vary considerably from state to state. People who are dual eligible can often join a Dual Eligible Special Needs Plan, a type of Medicare Advantage plan built to coordinate both sets of benefits.

Other ways to manage drug costs

Two options help even if you do not qualify for Extra Help. The Medicare Prescription Payment Plan does not lower your total drug costs, but it spreads your out-of-pocket spending into monthly payments across the calendar year, and anyone with Part D can join at no cost. The Program of All-Inclusive Care for the Elderly, or PACE, helps people 55 and older who need a nursing-home level of care stay in their community instead; if you have Medicaid you may pay no monthly premium for its long-term care part.

If you do not qualify

Missing the income or resource limits does not leave you stuck, because there are other ways to lower Medicare costs. Compare drug plans every fall during the Annual Enrollment Period, October 15 to December 7, since the plan that was cheapest for your prescriptions last year often is not this year. Look for plans with extra benefits like a Part B giveback. Weigh a Medigap policy, also called Medicare Supplement Insurance, if predictable costs matter more to you than a low monthly premium. And ask about state pharmacy assistance programs and the drug manufacturers' own assistance programs, which are separate from Medicare entirely.

How to apply

Gather proof of income, recent bank statements and your Medicare card first. For a savings program, contact your state Medicaid office; our guide to Medicare Savings Programs walks through the steps. For Extra Help, apply through Social Security. If you are not sure where to start, your State Health Insurance Assistance Program has counselors who help at no cost, and a licensed insurance agent can walk through it with you as well.

Common questions