Medicare Savings Program

There are four Medicare Savings Programs: the Qualified Medicare Beneficiary (QMB), the Specified Low Income Beneficiary (SLMB), the Qualified Individual (QI or QI-1) and the Qualified and Disabled and Working Individual (QDWI).

Congress first enacted the Qualified Medicare Beneficiary 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% FPL, which is the QMB program. 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, which is 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, which is the QI-1 program.

The QDWI program was established by the Omnibus Budget Reconciliation Act of 1990 and provides that anyone who is disabled, entitled to Medicare Part A and with income no higher than 200% of the federal poverty level and resources no higher than twice the maximum resources for Supplemental Security Income (SSI), who return to work, may be eligible for assistance in paying their Medicare Part A premium.

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

The federal, state and local governments fund the Medicare Savings Programs jointly. The administrative costs for all four programs 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 the QI-1 benefits, however, are fully federally funded.

The QMB, SLMB, and QDWI programs are entitlement programs, meaning anyone eligible for the benefit is entitled to receive it. On the other hand, the QI-1 program is funded by a federal block grant (the federal government allocates a specific amount of money each year to each state for eligible beneficiaries) and is periodically reauthorized by Congress; subsequently the funding for the program must be appropriated from time to time. Thus, the benefit is contingent on the availability of funds and it is possible that even if an individual meets the eligibility criteria of the QI-1 program, s/he would not receive the benefit because the funding has run out. To date, New York State has never used its full allocation for the Q-I 1 program.

The four Medicare Savings Programs use Medicaid funds to help low-income individuals with their Medicare cost-sharing expenses such as the Medicare premiums, deductibles and coinsurance. Each of the four Medicare Savings Programs has different eligibility criteria and provides for different benefits. Individuals apply for any of the Medicare Savings Programs at the local Medicaid office.