Medicare Savings Programs Can Cut Costs for Many Low-Income Enrollees

But about 40 percent of those who qualify — an estimated 6 million — aren’t enrolled in this financial aid

11-minute read

Article 4 out of 8 in Getting Help

Stephanie Watson and Linda Dono,

Updated April 21, 2026

AARP

Reviewed by

Tobey Oliver, MPP, J.D.

En español

Updated April 21, 2026

Chris Gash

Key takeaways

Apply at your state Medicaid office, not to Medicare.
Application process is complex. AARP wants it simplified.
Law delays plan to simplify applying. But still worth effort.
Experts: More than 10% of people now in it could be out.
Learn more about the 4 Medicare Savings Programs.

Perhaps the biggest surprise about needing help to pay your Medicare Part B premiums is knowing to ask your state for the aid.

That’s right: Medicare Savings Programs (MSPs), which the federal government helps finance but state Medicaid agencies administer, can assist Medicare beneficiaries with limited incomes and assets in paying for Part B premiums, Part A premiums if they don’t qualify for premium-free Part A, deductibles, copayments and coinsurance associated with Medicare, the federal health insurance program.

You can apply any time, not just during Medicare open enrollment, Oct. 15 to Dec. 7.

One option for people with the lowest income and assets “covers the amount that you would pay for your copay or coinsurance when you see a doctor, go to the hospital or receive any other service,” says Casey Schwarz, senior counsel for education and federal policy at the Medicare Rights Center. The New York City–based nonprofit works to ensure access to affordable health care for older or disabled adults.

“That amount is limitless in terms of how much a person would save,” Schwarz says.

More than 1 in 5 people enrolled in Medicare are eligible for one of the four Medicare Savings Programs, according to a 2025 analysis of beneficiary survey data published in the medical journal JAMA Network Open. But from 2018 to 2020, more than 40 percent of those who qualified didn’t take advantage of the financial help. Some 6 million people are likely eligible but are not enrolled.

Programs not easy to find out about, apply for

Among the reasons for the lack of uptake, according to the Medicare Rights Center; KFF, a San Francisco–based health policy nonprofit with an office in Washington, D.C.; and a 2025 report from the U.S. Department of Health and Human Services:

A confusing application process that focuses on people’s assets
Frequent recertification requirements
Little promotion of the program
A stigma associated with asking for public benefits

One application puts you in the running for all the Medicare Savings Programs. Your state’s Medicaid office will enroll you in the one that best fits your financial resources.

But be aware: You must reapply each year for these programs or update your previous information. The benefits will not continue automatically.

Although the federal government establishes income and asset limits for each of the programs, those numbers are a floor, not a ceiling, and states have an option to increase maximums for their residents or waive guidelines altogether.

Simplify or eliminate asset limits, AARP urges

For instance, 13 states — Alabama, Arizona, Connecticut, Delaware, Louisiana, Maine, Massachusetts, Mississippi, New Mexico, New York, Oregon, Vermont and Washington — and the District of Columbia have no asset limits for their programs as of 2026, says an April report from AARP’s Public Policy Institute.

At least eight states — Alaska, Connecticut, Hawaii, Indiana, Maine, Massachusetts, New York and Washington — as well as the District of Columbia allow higher incomes to qualify, KFF says.

These differences can make it more difficult for people to know whether they’re eligible. And something a person owns that’s considered an asset in one state might not count in another.

“States should continue to pursue efforts to streamline them [asset tests] or eliminate them entirely,” the AARP report says.

About 8 in 10 of those eligible hold only a few low-value assets that remain stable over time, the report says. But those assets and their values have to be verified again each year.

States could simplify the renewal process for these types of assets. Some, such as life insurance policies, could be disregarded.

By doing so, “policymakers could meaningfully reduce the administrative burden for MSP applicants and state eligibility workers, while simultaneously helping MSP enrollees obtain small life insurance policies for coverage of burial and funeral expenses,” the report says.

New law puts streamlining of process on hold

Confusion about eligibility for the programs will remain a problem. Changes meant to streamline the Medicare Savings Programs’ application process were delayed nine years, until Oct. 1, 2034, because of a provision in the budget reconciliation bill signed into law in July 2025.

AARP has been advocating for simplification of the financial aid process for years and has repeatedly pointed out to lawmakers that the now-deferred reforms are designed to make the system work better for both Medicare enrollees and states.

“CMS [the Centers for Medicare & Medicaid Services] was trying to make it easier to enroll, easier to get access, easier to take advantage of the benefits,” says Elizabeth Fowler, a distinguished scholar in health policy and management at the Johns Hopkins Bloomberg School of Public Health. “And now they’ve cut back all those attempts to streamline eligibility.”

Each state can still use its own methods for verifying income and assets, but they have the option to adopt the delayed federal regulations. One simplification postponed would have required all states to use the same criteria as the federal Part D Extra Help program ,which lowers the cost of Medicare Part D prescription plan premiums and copays.

Without that rule, “it may be harder procedurally for people to apply for and retain access to the Medicare Savings Program,” Schwarz says.

One regulation not delayed requires states to automatically enroll recipients of Supplemental Security Income (SSI) — a federal safety net program for people with very limited financial resources who are age 65 or older, blind or disabled — in the Qualified Medicare Beneficiary Program, KFF says.

That’s the Medicare Savings Program that serves the lowest-income recipients. It covers deductibles, coinsurance and copayments, in addition to Part A and Part B premiums.

“These programs put money back in people’s pockets [to] help them afford healthier foods, afford health care and really secure the essentials.”

—Nicole Heckman, AARP Foundation

SSI recipients are also automatically enrolled in Extra Help. If you apply for Extra Help through the Social Security Administration, which vets those Extra Help applications, and are approved for it, the agency will share your information with your state.

Your state should use it to determine whether you qualify for a Medicare Savings Program. However, this process has gaps, so be prepared to contact your state and send information to make sure you’re enrolled.

Tackling the red tape can save you thousands of dollars

Two of the Medicare Savings Programs pay Part A premiums for those who don’t qualify for premium-free Part A. That’s in addition to the Part B premiums that most Social Security recipients have deducted from their monthly payments.

Older adults approved for one of the programs are automatically signed up for Extra Help, which will save enrollees an average of $5,700 a year in 2026.

Medicare Savings Programs can help enrollees with thousands of dollars additionally each year in out-of-pocket costs. More than 12 million people were expected to participate in the programs in 2024, the latest year for which data was available, according to CMS.

“These programs put money back in people’s pockets [to] help them afford healthier foods, afford health care and really secure the essentials,” says Nicole Heckman, AARP Foundation’s vice president for financial well-being programs. That’s important as inflation creeps up; Medicare Part B premiums reached $202.90 a month in 2026.

More than 10 percent of people in program may lose it

But the changes in federal law last year are expected to reduce the number of people in Medicare Savings Programs by 1.3 million, according to KFF. The true number won’t be known for a few years because the data has to be gathered from each state individually.

Use of Medicare services is also expected to decline as Medicare enrollees who previously had qualified for a Medicare Savings Program have more difficulty paying their premiums.

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“Even if they can pay the premium themselves [because of the new law], they won’t have help to pay for the cost sharing that’s associated with actually using health care services,” says Jeannie Fuglesten Biniek, an associate director for the Program on Medicare Policy at KFF.

Some Medicare beneficiaries with limited income told the JAMA researchers that they picked Medicare Advantage plans to reduce their cost sharing. Medicare Advantage plans, a private-insurer alternative to original Medicare that includes Medicare Parts A and B and usually Part D, have annual maximum out-of-pocket caps that original Medicare doesn’t have.

However, the reduced out-of-pocket costs from participating in a Medicare Savings Program can lessen original Medicare enrollees’ need to switch to a Medicare Advantage plan and its restricted provider networks, researchers said. Some of the money saved can be used to pay for Medicare supplement insurance, better known as Medigap.

The law Congress passed in 2025 cuts hundreds of billions of dollars from Medicaid in the next decade and will also hurt beneficiaries who are dually eligible for Medicare and Medicaid.

“The extent to which states have to cut Medicaid services would affect people who rely on not just the financial assistance from these services but also things that Medicare doesn’t cover, like long-term care or home- and community-based services,” Biniek says.

The 4 Medicare Savings Programs

Apply through your state’s Medicaid office for these financial assistance programs. Your State Health Insurance Assistance Program has counselors who can help you through the application process.

Federal law sets baseline income limits, which you’ll see below. But states are allowed to decide which types of income they’ll exclude, so a person on Medicare may qualify in one state but not another — even with the same income.

Medicare Savings Programs are not available in U.S. territories, and Alaska and Hawaii have higher income limits than the continental United States. Here are the programs, listed from lowest to highest incomes:

1. The Qualified Medicare Beneficiary Program

It pays for Part A and Part B premiums if you don’t have premium-free Part A. Includes Part B deductibles, coinsurance and copayments for covered services.

This program has the lowest income limit of the four at just about the federal poverty level, an annual government income measure that adjusts for family size but doesn’t reflect what it actually costs to live in many communities. Federal law prohibits Medicare providers from billing you.

Monthly income and asset limits for 2026:

Individual. $1,350 in income, $9,950 in assets.
Married couples. $1,824 in income, $14,910 in assets.

2. Specified Low-Income Medicare Beneficiary Program

This program pays for Part B premiums.

You must have Medicare Parts A and B to qualify.

You can be reimbursed for premiums up to three months before the effective date, including from the previous calendar year. It helps people who are at about 120 percent of the federal poverty level.

Monthly income and asset limits for 2026:

Individual. $1,616 in income, $9,950 in assets.
Married couples. $2,184 in income, $14,910 in assets.

3. Qualifying Individual Program

This program pays for Part B premiums, but you also must have Part A to qualify.

You can be reimbursed for up to three months of premiums before the effective date but only in the same calendar year. It helps people up to about 135 percent of the federal poverty level.

Apply early. If money allocated in your state is used up before the end of a year, your benefits stop or you won’t be admitted to the program.

Monthly income and asset limits for 2026:

Individual. $1,816 in income, $9,950 in assets.
Married couples. $2,455 in income, $14,910 in assets.

4. Qualified Disabled and Working Individual Program

This program pays for Medicare Part A premiums only and is designed for people with disabilities who are younger than 65 and working. They have not earned the 40 calendar quarters of work to qualify for premium-free Part A but qualify for Medicare.

You can be reimbursed for up to three months of Part A premiums, which are more expensive than Part B, that you paid before your enrollment. It helps workers on Medicare who earn up to about four times more than the federal poverty level. Monthly income and asset limits for 2026:

Individual. $5,405 in income, $4,000 in assets.
Married couples. $7,299 in income, $6,000 in assets.

Contributing: Tony Pugh and Dena Bunis

This story, originally published July 14, 2022, was updated with new information about the challenges and changes facing Medicare Savings Plans and a report from AARP’s Public Policy Institute.

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About the authors

Stephanie Watson is a freelance writer with more than two decades of experience covering consumer health. Her work has appeared in WebMD, Time, Harvard Health Publications, Healthline, HealthCentral and many other publications. She also served as executive editor of Harvard Women’s Health Watch.

Linda Donois a senior executive editor for AARP. Previously, she served as a reporter and editor for USA Today, Gannett News Service and newspapers in four states, including The Cincinnati Enquirer.

About the reviewer

Tobey Oliver, director of health programs at AARP’s Public Policy Institute, focuses on Medicaid and health care affordability. She previously worked in the Medicare-Medicaid coordination office at the federal Centers for Medicare & Medicaid Services and as a health care researcher at NORC, formerly known as the National Opinion Research Center, at the University of Chicago.