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Medicare Savings Program (MSP)

Revised date
Purpose statement

To describe programs to help individuals pay for Medicare premiums, deductibles, coinsurance charges, and copayments.

Medicare Savings Program (MSP)

Effective January 1, 2023, MSPs have no resource or asset test as a part of the eligibility determination process.

Clarifying information

What is Medicare and who can get Medicare?

  1. Medicare is a federal health insurance program administered by the Social Security Administration (SSA) and the Centers for Medicare and Medicaid Services (CMS). Medicare provides health care coverage for people who:
    1. Have worked under the Social Security or Railroad Retirement systems (for more Railroad Retirement information, see Worker Responsibilities, section 2 below) and:
      1. Are age 65 or older; or
      2. Have been receiving Social Security or Railroad disability benefits for at least 24 months; or
    2. Need continuing dialysis for permanent renal failure; or
    3. Have received a kidney transplant within the last thirty-six months; or
    4. Are receiving Supplemental Security Income (SSI) and;
      1. Meet the citizenship and alien status requirements in chapter WAC 182-503-0505 and
      2. Are age 65 or older or can draw Medicare based on having sufficient work quarters on their own or through a disabled parent.
    5. An individual can apply for Medicare online at Social Security Administration's website.
      The Medicare program includes four kinds of health insurance coverage:
      1. Part A - Hospital Insurance
        1. Part A is free for people who have worked and:
          1. Have earned the required number of work quarters, or
          2. Have a spouse who has earned the required number of work quarters.
        2. Part A is also available at a cost for Medicare-entitled individuals who do not have the required number of work quarters for free Medicare Part A.
        3. Medicare entitlement dates are in SOLQ on the SSA2 screen. Part A is called “Health Insurance”. Part A entitlements are also listed in Aces.online on the BENDEX.

Part B - Health Insurance (doctor’s visits)

  1. Everyone who enrolls in Part B must pay a monthly premium.
  2. Medicare entitlement dates are located in SOLQ on the SSA2 screen. Part B is called “Supplemental Medical Insurance”. Part B entitlements are also available in Aces.online on the BENDEX.
  3. Effective January 1, 2023 SSA has a new type of Part B (Part B-ID or PBID) benefit only available to individuals who have received Medicare for organ transplant due to renal failure (ESRD)($97.10). This new benefit is available after the 36-month post-transplant Part B ends. Eligibility for the agency to pay for this new benefit is the same as for any MSP or other Medicaid program. Beneficiaries need not be eligible for Part A but do need to have received Part B previously due to renal failure.
  4. Part C - Optional Supplemental Health Insurance
    1. Part C is called Medicare Advantage and means a managed care plan.
    2. Medicare beneficiaries that choose Medicare Advantage (Part C) must be entitled to Medicare Part A and Medicare Part B or they cannot enroll in a Part C plan.
    3. Medicare Advantage (Part C) beneficiaries must pay a monthly premium in addition to Part A and Part B premiums when they enroll in a Part C plan.
    4. Several Part C plans doing business in Washington do not charge a monthly premium.
    5. HCA no longer pays Part C premiums.
  5. Part D - Prescription Drug Program
    1. Part D benefits are available to all Medicare beneficiaries. To be eligible for Part D, the beneficiary must be enrolled in Medicare Part A or Part B.
    2. CMS automatically enrolls dual-eligible (i.e., eligible for both Medicaid and Medicare) and MSP individuals into a Part D plan.
    3. Dual-eligible individuals begin receiving most of their prescription drug benefits through Medicare and not Medicaid when they gain dual-eligibility status (CN or MN plus Medicare).
    4. If a beneficiary has creditable coverage covering prescription drugs through a private insurance, a beneficiary can disclose this information to Medicare. See Creditable Coverage | CMS.
    5. Dual-eligible and MSP individuals may change to a different Part D plan every month if they choose. For more information see Drug coverage (Part D) | Medicare.
    6. The requirement to purchase drugs through a Medicare Part D plan begins as soon as Medicaid (HCA) is notified of Medicare eligibility.
    7. Medicare has contracted with Limited Income Net (Humana) to provide prescription drug coverage for Medicaid individuals newly entitled to Medicare and not yet enrolled in a Part D plan.
      1. Pharmacies can bill the Limited Income Net (Humana) plan when a Medicaid individual has not yet enrolled in a Part D plan. Medicaid individuals must show proof of Medicaid eligibility and Medicare entitlement to the pharmacist. A Medicaid award letter is sufficient proof of Medicaid and a Medicare card or letter from SSA stating the effective date of Medicare is sufficient proof of Medicare entitlement.
      2. The Limited Income Net (Humana) plan can be reached at 1-800-783-1307.
  6. Dual-eligible and MSP individuals have copayment cost sharing for Part D covered drugs.
  7. Institutionalized and Home & Community Service waivered individuals are exempt from paying Part D copayments. If an HCBS waiver individual is still being charged Part D copayments at their pharmacy, refer the individual to contact CMS at 206-615-2354. For more information specific to long-term care individuals, see Medicare and Long-term Care.
  8. Medicaid continues to pay for some drugs that Medicare excludes under Medicare Part D rules. This information is located at Apple Health Preferred Drug List (PDL) | Washington State Health Care Authority.
  9. Medicaid and MSP individuals receive a ProviderOne services card that looks like a plastic credit card. For more information visit ProviderOne Services Card.

WAC 182-517-0100 Federal medicare savings programs.

WAC 182-517-0100 Federal medicare savings programs.

Effective February 25, 2023

  1. Available programs. The medicaid agency offers eligible clients the following medicare savings programs (MSPs):
    1. The qualified medicare beneficiary (QMB) program;
    2. The specified low-income medicare beneficiary (SLMB) program;
    3. The qualified individual (QI-1) program; and
    4. The qualified disabled and working individuals (QDWI) program.
  2. Eligibility requirements.
    1. To be eligible for an MSP, a client must:
      1. Be entitled to medicare Part A; and
      2. Meet the general eligibility requirements under WAC 182-503-0505.
    2. To be eligible for QDWI, a client must be under age 65.
    3. Income limits.
      1. Income limits for all MSPs are found at www.hca.wa.gov/free-or-low-cost-health-care/i-help-others-apply-and-acc….
      2. If a client's countable income is less than or equal to 100 percent of the federal poverty level (FPL), the client is income eligible for the QMB program.
      3. If a client's countable income is over 100 percent of the FPL, but does not exceed 120 percent of the FPL, the client is income eligible for the SLMB program.
      4. If a client's countable income is over 120 percent of the FPL, but does not exceed 135 percent of the FPL, the client is income eligible for the QI-1 program.
      5. If a client's countable income is over 135 percent of the FPL, but does not exceed 200 percent of the FPL, the client is income eligible for the QDWI program if the client is employed and meets disability requirements described in WAC 182-512-0050.
    4. The federal MSPs do not require a resource test.
  3. MSP income eligibility determinations.
    1. The agency has two methods for determining if a client is eligible for an MSP:
      1. The agency first determines if the client is eligible based on SSI-rated methodologies under chapter 182-512 WAC. Under this method, the agency calculates the household's net countable income and compares the result to the one-person standard. However, if the spouse's income is deemed to the client, or if both spouses are applying, the household's net countable income is compared to the two-person standard.
      2. If the client is not eligible under the methodology described in (a)(i) of this subsection, the agency compares the same countable income, as determined under (a)(i) of this subsection, to the appropriate FPL standard based on family size. The number of individuals that count for family size include:
        1. The client;
        2. The client's spouse who lives with the client;
        3. The client's dependents who live with the client;
        4. The spouse's dependents who live with the spouse, if the spouse lives with the client; and
        5. Any unborn children of the client, or of the spouse if the spouse lives with the client.
    2. Under both eligibility determinations, the agency follows the rules for SSI-related people under chapter 182-512 WAC for determining
      1. Countable income;
      2. Availability of income;
      3. Allowable income deductions and exclusions; and
      4. Deemed income from and allocated income to a nonapplying spouse and dependents.
      5. The agency uses the eligibility determination that provides the client with the highest level of coverage.
        1. If the MSP applicant is eligible for QMB coverage under (a)(i) of this subsection, the agency approves the coverage.
        2. If the MSP applicant is not eligible for QMB coverage, the agency determines if the applicant is eligible under (a)(ii) of this subsection.
        3. If neither eligibility determination results in QMB coverage, the agency uses the same process to determine if the client is eligible under any other MSP.
      6. When calculating income under this section:
        1. The agency subtracts client participation from a long-term care client's countable income under WAC 182-513-1380, 182-515-1509, or 182-515-1514.
        2. The agency counts the annual Social Security cost-of-living increase beginning April 1st each year.
  4. Covered costs.
    1. The QMB program pays:
      1. Medicare Part A and Part B premiums using the start date in WAC 182-504-0025; and
      2. Medicare coinsurance, copayments, and deductibles for Part A, Part B, and Part C, subject to the limitations in WAC 182-502-0110.
    2. If the client is eligible for both SLMB and another medicaid program:
      1. The SLMB program pays the Part B premiums using the start date in WAC 182-504-0025; and
      2. The medicaid program pays medicare coinsurance, copayments, and deductibles for Part A, Part B, and Part C subject to the limitations in WAC 182-502-0110.
    3. If the client is only eligible for SLMB, the SLMB program covers medicare Part B premiums using the start date in WAC 182-504-0025.
    4. The QI-1 program pays medicare Part B premiums using the start date in WAC 182-504-0025 until the agency's federal funding allotment is spent. The agency resumes QI-1 benefit payments the beginning of the next calendar year.
    5. The QDWI program covers medicare Part A premiums using the start date in WAC 182-504-0025.
  5. MSP eligibility. Medicaid eligibility may affect MSP eligibility:
    1. QMB and SLMB clients may receive medicaid and still be eligible to receive QMB or SLMB benefits.
    2. QI-1 and QDWI clients who begin receiving medicaid are no longer eligible for QI-1 or QDWI benefits, but may be eligible for the state-funded medicare buy-in program under WAC 182-517-0300.
  6. Right to request administrative hearing. A person who disagrees with agency action under this section may request an administrative hearing under chapter 182-526 WAC.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

WAC 182-517-0300 State-funded medicare buy-in programs

WAC 182-517-0300 State-funded medicare buy-in programs.

Effective July 23, 2016

  1. A person is eligible for the state-funded medicare buy-in program if the person:
    1. Is entitled to or receiving medicare;
    2. Is not eligible for a federal medicare savings program under WAC 182-517-0100; and 
    3. Is eligible for coverage under:
      1. The categorically needy (CN) program; or 
      2. The medically needy (MN) program;
  2. The SBIP begins the second month after the month a person meets eligibility requirements.
  3. The SBIP pays only medicare Part B premiums.
  4. The agency pays medicare deductibles and coinsurance under WAC 182-502-0110.
  5. A person who disagrees with agency action under this section may request an administrative hearing under chapter 182-526 WAC.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

Clarifying information

How does someone apply or recertify for Medicare Savings Programs (MSP)?

  1. A person applying for MSP can apply:
    1. Online at Washington Connection;
    2. Call the Customer Service Contact Center at 877-501-2233;
    3. Submit a paper HCA 13-691 Application for Medicare Savings Program (wa.gov); or
    4. Submit Form HCA 18-005 Application for aged, blind, disabled/long-term if applying full Medicaid coverage (wa.gov).
  2. MSP applications can also be initiated at SSA; these applications are sent electronically by SSA directly to ACES for auto-screening into ACES as a pending application. See Applications for Assistance - Special Situations document for more information.
  3. A person reapplying for MSP can use any of the forms: 18-005, 13-691, 14-078 or ACES Interactive Declaration (IID).
  4. An applicant can apply or reapply by mail, by phone or in person.
  5. A face-to-face interview is not required.
  6. Individuals receiving SSI (S01) and MSP do not need to reapply or be recertified unless their SSI benefits end.
  7. Individuals who are currently on CN and become Medicare eligible should have MSP added whenever discovered. Treat this situation as a change of circumstances and process without an application. Applicants with other health insurance coverage need to complete a DSHS Third Party Liability 14-194 form. For more information refer to the Coordination of benefits | Washington State Health Care Authority.
  8. See the Medicare Savings Programs Desk Aid for a useful overview of the programs discussed in this section.

How a client is determined eligible for a Medicare Savings Program

  1. Eligibility for an MSP follows SSI-related rules described in Chapter 182-512 WAC with limited exceptions.
    1. For MSP, the Disabled Adult Child (DAC) and Disabled Widow/widowers Benefit (DWB) groups one and two special income disregards in 182-512-0880 (2) and (3) are not allowable. Federal law does not allow the DAC and DWB disregard in the MSP eligibility determination.
  2. For a single individual, net countable income is compared to the income standards described in WAC 182-517-0100.
  3. When a married person applies for an MSP, eligibility is determined using the 2-person standard when both applicants are applying for and entitled to Medicare. When only one person in the couple is applying for an MSP, eligibility is determined as follows:
    1. Compare the income of the nonapplying spouse (NAS) (after allowable deductions to children in the household, if any) to one half of the federal benefit rate (FBR). If the countable income of the nonapplying spouse is equal to or less than ½ FBR, then no income is allocated to the MSP applicant and only the applicant’s income is compared to the one-person MSP standard.
    2. If the countable income of the nonapplying spouse is greater than ½ FBR, then their countable income is allocated to the MSP applicant. The applicant is then allowed the standard $20 exclusion and a deduction of $65 plus ½ of any earned income. The remaining amount is then compared to the two-person MSP standard. See the MSP Eligibility Chart for more information.

    3. If an individual or couple is not eligible using the SSI-related rules above there is another methodology that ACES will use automatically when a spouse, or countable child, as defined in 182-512-0820, is in the household. The new method compares net countable income based on the countable number of households members to the appropriate program FPL based on household size. This can result in an applicant becoming eligible for a program when they were not previously or moving up the MSP continuum (towards a more comprehensive program) due to the increased limit based on the household size. The new standards chart with MSP income limits based on household size are posted and effective 8/1/2019.

    4. There is no resource test for the MSPs effective January 1, 2023. Do not request verification of resources for MSP only applications.

How Do I Recognize Medicare Part A Entitlement?

  1. Obtain proof of Medicare Part A entitlement from the individual, based on one of the following:
    1. Medicare card;
    2. Medicare award letter, if available;
    3. State Online Query (SOLQ) screen SSA2 or BENDEX (Aces.online), except for Railroad Retirement Board beneficiaries;
    4. The SSA2 screen shows Medicare Part A (Health Insurance) and Part B entitlement (Supplemental medical insurance); and
    5. Contact the Railroad Retirement Board at 800-808-0722.
  2. For MSP and State-funded Buy-In, individuals need to be:
    1. Entitled to Medicare Part A but do not have to be receiving or enrolled in Part A at the application for benefits; and
    2. Entitled to Medicare Part A when asking for retroactive certification for each of the retroactive months.

What is the Program Priority for Medicare Savings Programs?

  1. Qualified Medicare Beneficiary
    1. The ACES medical coverage group for QMB is S03.
    2. The income standard for a QMB is 100% FPL.
      Note: A QMB who is eligible for another Medicaid program (QMB dual eligible) receives QMB (S03) with the other Medicaid program. These QMB dual eligible individuals (also known as "full dual-eligibles") are screened in ACES on medical coverage group S03 and the other Medicaid program (for example, S03 and S02).
  2. Specified Low-Income Medicare Beneficiary
    1. The ACES medical coverage group is S05.
    2. The income standard for SLMB is 120% of FPL.

      Note: A SLMB who is eligible for another Medicaid program (SLMB dual) receives SLMB (S05) with the other Medicaid program. The Medicaid programs medical coverage group will vary depending on the individual’s eligibility. These SLMB dual eligible individuals (sometimes referred to as "partial dual-eligibles") are screened into ACES on medical coverage group S03 (which trickles to S05) and a Medicaid program (for example, S05 and S02).

  3. Qualifying Individuals (QI-1)
    1. The ACES medical coverage group is S06.
    2. The income standard for QI-1 is 135% of FPL.
  4. Qualified Disabled Working Individual (QDWI)
    1. The ACES medical coverage group is S04.
    2. The income standard for QDWI is 200% of FPL.
    3. Individuals must be employed to qualify.
  5. State-funded Buy-In
    1. There is no ACES coverage group for these individuals.
    2. Any individual who is eligible for Medicaid and there is no MSP open, is eligible for the state-funded buy-in program.

How does the buy-in process work?

  1. DSHS eligibility staff determine MSP eligibility.
  2. ProviderOne runs a search application during the last week of every month to find Medicaid and MSP individuals eligible for Medicare premium payment/buy-in. This process identifies individuals who meet the buy-in criteria. The individual's data is sent to the CMS.
  3. CMS compares the state’s data against their own to match for name, date of birth, sex, and the Medicare Health Insurance Claim (HIC) number.
  4. CMS forwards the matched data to the SSA payment centers to issue Part B refunds to beneficiaries and to update the SSA record.
  5. The Medicare Buy-In Unit (MBU) may send BarCode ticklers to CSO and HCS staff requesting corrective actions, such as SO3 screening.
  6. If the individual is being billed for Part B premiums or their Part B premiums are still being deducted from their benefit checks after 60-90 days, the individual or worker should contact the HCA Buy-In unit at 800-562-3022 ext 16129.

Can an individual be on MSP and spenddown at the same time?

  1. An individual pending spenddown may be eligible for MSP if their income meets program requirements.
  2. An individual may receive any of the MSPs when spenddown is pending. Only QMB and SLMB may be open concurrent with another medical program.
  3. An individual receiving Tailored supports for older adults (TSOA) | Washington State Health Care Authority can receive a MSP program along with TSOA.
  4. When an individual pending spenddown receives QI-1 (S06) or QDWI (S04), and is later certified for a CN or MN medical program, ACES will prompt the worker to close the QI-1 (S06) or QDWI (S04). The individual can be reopened for the balance of the original QI-1 (S06) or QDWI (S04) certification period if any, when spenddown certification ends.

Example: A person pending spenddown is opened on MSP QI-1 (S06) based on their income. The individual meets spenddown and is no longer eligible for QI-1 when receiving Medicaid. When spenddown certification ends, the client is reopened (a new application is not needed) on QI-1 for any remaining months of the original QI-1 certification.

Can an individual be on HWD (S08) and MSP/state-funded buy-in at the same time?

  1. To be eligible for the federal Medicare Savings Programs (MSP), HWD individuals must meet all the MSP criteria in the above MSP WACs, specifically income requirements.
  2. When the HWD individual loses eligibility for free Part A but meets eligibility criteria for QDWI, the state can pay Part A premiums but may not pay the client’s Part B premium. To do this the individual would have to be closed from HWD and enrolled in QDWI.
  3. If the HWD individual who loses eligibility for free Part A self-pays their Part A premium, the state may pay Part B premiums through the state-funded buy-in program as long as the individual continues to self-pay Part A premiums. The individual will also be eligible for continued Medicaid (HWD).
  4. If the individual stops self-paying their Part A premium the state can no longer pay the individual’s Part B premium.
    The state may not pay both Part A and Part B premiums for those HWD individuals who have lost free Part A entitlement.

Worker responsibilities

  1. Refer individuals with Medicare questions to Medicare at 1-800- Medicare (800-633-4227) or TRS through Washington Relay.
  2. Refer individuals with questions about Railroad Retirement (RRB) benefits to the Railroad Retirement Board at 800-808-0722.
  3. Railroad Retirement Medicare entitlement is NOT in SOLQ. The individual can present a Red, White, and Blue Medicare entitlement card or RRB approval or award letter that shows the individual's or dependent's Medicare coverage. RRB award letters do not provide entitlement dates for Part A and Part B. The RRB Red, White, and Blue cards do provide Medicare entitlement dates.
    1. Workers should call 877-772-5772 to request RRB Medicare entitlement dates.
    2. Update TPL screens, if not already updated by AUTO.
    3. Approve the appropriate Medicare Savings Program when an individual or dependent of a RRB individual has RRB Medicare coverage.
  4. Refer individual questions about the Medicare Prescription Drug Program (Medicare Part D) or specific drug plans to:
    1. Medicare at 1-800-Medicare; or
    2. SHIBA HelpLine 1-800-562-6900.
  5. Refer individual questions about Extra Help Paying for Medicare Prescription Drug Costs to:
    1. Social Security Administration (SSA) at 1-800-772-1213; or
    2. SHIBA HelpLine 1-800-562-6900.
  6. Processing MSP cases in ACES includes adding and/or updating the TPL screens unless ProviderOne has already updated the ACES TPL screens.
  7. Medicare and Long-Term Care. This section provides more detailed information about Medicare Part D and post-eligibility determinations.

Clarifying information

What do the Medicare Savings Programs (MSP) and Medicaid offer Medicare beneficiaries?

  1. The MSP pays some out-of-pocket Medicare expenses for Medicare beneficiaries who meet the MSP income tests. For example and depending on the category of MSP eligibility, MSP can pay:
    1. Part A and Part B premiums; and
    2. Deductibles, coinsurance, and copayments for Medicare Parts A, B, and C.
  2. The state notifies Medicare every month via an electronic interface about individuals with both Medicaid and Medicare. Medicare automatically assigns Medicaid individuals with Medicare and/or MSP to a Medicare Part D plan. Medicare notifies these individuals by mail about their Part D plan.

What expenses are not paid by the Medicare Savings Programs?

The Medicare savings programs do not pay for the following expenses:

  1. Medicare Part D premiums
  2. Medicare Part D prescription drug copayments
  3. Medigap policies
  4. Medicare Part C premiums
  5. Expenses incurred with a provider who is not contracted with Medicaid.

Automated screening of Medicare Savings Program

As part of the Medicare Modernization Act applications to Social Security for Limited Income Subsidy (LIS) are also to be considered an application for Medicare cost-sharing. To comply with this requirement ACES automatically sends an application for health care to any individual who has applied for LIS at SSA in the previous month. If the LIS recipient does not complete and return the application ACES will automatically deny the request. Procedures for processing the returned applications are below.

Worker responsibilities

  1. Determine eligibility for a Medicare Savings Program (MSP) and, if requested, all other health care programs.
    1. WA State SSI Related income and resource rules differ from SSA LIS income and resource rules so S03 cannot be opened without an application and eligibility determination.
    2. ACES sends a LTR 023-02 and a 13-691 application form.
    3. If the individual returns the application form eligibility is determined for all Apple Health programs.
    4. The Standard of Promptness (SOP) count begins from the date DSHS received the SSA/LIS input file. ACES is programmed to apply the correct SOP date.
  2. Denying automated MSP applications.
    1. ACES will auto-deny MSP applications with LTR 004-05 and reason code 230 after 30 days when an application is not returned.
    2. Do not deny for failure to provide information prior to the automated ACES denial.

Note: Estate Recovery rules do not apply to MSP.

For questions or issues about buy-in

For assistance with Medicare premium payment questions only, contact the HCA Medicare Buy-In Unit at 800-562-3022 Ext: 16129.

If you have an eligibility question or need assistance with an administrative hearing issue, please contact your area Medicaid eligibility policy representative at the Health Care Authority, Office of Medicaid Eligibility and Policy.

ACES procedures

See Medicare Savings Program

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