Medicare Savings Programs Can Help Pay Some of Your Health Care Costs

More than 40 percent of those who qualify don’t apply for this financial aid

8-minute read

Stephanie Watson and Linda Dono,

Updated November 03, 2025

AARP

Reviewed by

Tobey Oliver, MPP, J.D.

En español

Published July 14, 2022

/ Updated November 03, 2025

Chris Gash

Key takeaways

For this Medicare program, apply at your state Medicaid office.
Application process is complex, but you’ll save a bundle.
New law puts plan to simplify applying on hold.
Experts: More than 10% of people now in it could be dropped.
Learn more about the 4 Medicare Savings Programs.

Perhaps the toughest part 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, which the federal government helps finance but state Medicaid agencies administer, assist Medicare beneficiaries with limited incomes and assets in paying for the Part B premiums, Part A premiums if you don’t qualify for premium-free Part A, deductibles, copayments and coinsurance associated with Medicare, a federal 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 an analysis of three years of monthly Medicare beneficiary survey data published Oct. 3 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.

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 report earlier this year from the federal Department of Health and Human Services:

A confusing application process
Frequent recertification requirements
Little promotion of the program
And some 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.

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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. These differences can make it more difficult for people to know whether they’re eligible.

For instance, at least 14 states — Alabama, Arizona, California, Connecticut, Delaware, Louisiana, Maine, Massachusetts, Mississippi, New Mexico, New York, Oregon, Vermont and Washington — plus the District of Columbia have no asset limits for their programs. Eight states — Alaska, Connecticut, Hawaii, Indiana, Maine, Massachusetts, New York and Washington — as well as the District of Columbia allow higher incomes to qualify.

Asset and income amounts for 2026 won’t be released until after federal poverty guidelines are announced in January or February. But they typically don’t change much each year.

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 the program are automatically signed up for the federal Extra Help program, which lowers the cost of Medicare Part D prescription plan premiums and copays.

The Social Security Administration and the Centers for Medicare & Medicaid Services (CMS) estimate that both Medicare Savings Programs and Extra Help can save each enrollee $8,420 a year in out-of-pocket costs. As of September 2024, more than 12 million people participated, CMS says.

“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, the AARP Foundation’s vice president for financial well-being programs. That’s important as inflation creeps up and the Medicare trustees expect Part B premiums to top $200 a month in 2026.

New law puts streamlining of process on hold

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

“CMS 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.”

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Each state can now use its own methods for verifying income and assets, but the states have the option to adopt the delayed federal regulations on their own. One proposal would have required all states to use the same criteria as the Part D Extra Help program.

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 and covers deductibles, coinsurance and copayments, in addition to Part A and Part B premiums.

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 its information with your state to determine whether you qualify for a Medicare Savings Program.

More than 10 percent of people in program may lose it

Changes in federal law are expected to reduce the number of people in Medicare Savings Programs by 1.3 million. Use of Medicare services is also expected to decline as people have more difficulty paying their premiums.

“Even if they can pay the premium themselves, 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.

“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

Some Medicare beneficiaries with limited incomes 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 (Medigap).

The new law Congress passed this past summer that cuts hundreds of billions of dollars from Medicaid in the next decade 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.

Medicare Savings Programs are not available in U.S. territories. Here are the programs listed from lowest to highest incomes:

Qualified Medicare Beneficiary Program

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.
Federal law prohibits Medicare providers from billing you.

Specified Low-Income Medicare Beneficiary 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.

Qualifying Individual Program

Pays for Part B premiums, but you must also 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.
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.

Qualified Disabled and Working Individual Program

Pays for Medicare Part A premiums only.
You can be reimbursed for up to three months of Part A premiums (more expensive than Part B) that you paid before your enrollment.
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.

Contributing: Dena Bunis

This story, originally published July 14, 2022, has been updated throughout with information about the challenges and changes facing Medicare Savings Plans.

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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 Dono is 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 at the University of Chicago (formerly known as the National Opinion Research Center). She earned her master’s degree in public policy from George Mason University and her law degree from the University of California, Berkeley.