Advertisement
The Misconception That Could Be Costing You Money
If you have ever looked into Medicare Savings Programs and thought, "I probably won't qualify because I own my home" or "I have a little money in the bank, so I'm out" — you are not alone. This is one of the most common reasons people never apply for a benefit that could save them $2,000 or more every single year on Medicare costs.
The truth? The rules around Medicare Savings Programs asset limits and what counts are far more forgiving than most people expect. A large portion of what you own is simply not counted. This article walks you through exactly what is exempt and what is not, so you can make an informed decision instead of assuming the worst.
What Are Medicare Savings Programs?
Medicare Savings Programs (MSPs) are state-run programs funded jointly by states and the federal government. They help people with Medicare who have limited income cover costs like:
- Monthly Part B premiums
- Deductibles
- Copays and coinsurance
There are four levels of assistance — QMB, SLMB, QI, and QDWI — each covering different expenses depending on your income. QMB is the most comprehensive and can cover nearly all of your out-of-pocket Medicare costs. Even the less comprehensive levels can save you hundreds of dollars per year on your Part B premium alone.
Eligibility is based on both your income and your resources (assets). While income limits are relatively straightforward, the resource rules are where most people get confused — and where most people wrongly assume they don't qualify.
Medicare Savings Programs Asset Limits: What Actually Counts
Each year, the federal government sets resource limits that determine how much you can own and still qualify. These limits vary slightly by state and are updated annually, so you'll want to confirm the current numbers with your state Medicaid office. But the more important thing to understand is which assets are even included in that count.
Generally speaking, counted resources include things like:
- Money in checking or savings accounts
- Stocks, bonds, and mutual funds
- IRAs and other retirement accounts (rules can vary by state)
- Cash value of certain life insurance policies above a set amount
That list might still sound discouraging. But here is where it gets important: many of your most significant assets are completely excluded from the calculation.
Assets That Are Typically Exempt — You May Own More Than You Think
This is the section most people have never seen before. Under Medicare Savings Program rules, the following are generally not counted against your resource limit:
- Your primary home. The house you live in is excluded, regardless of its value. It does not matter if it is paid off or if it is worth several hundred thousand dollars.
- One vehicle. Your car — no matter what it is worth — is typically exempt. You do not have to own a beater to qualify.
- Household goods and personal belongings. Furniture, appliances, clothing, jewelry for everyday use — these are not counted.
- Burial plots and prepaid funeral arrangements. If you have set money aside for final expenses, those funds are generally excluded up to a certain amount.
- Life insurance with low face value. Policies with a combined face value at or below a federal threshold are typically excluded entirely.
Many people who own a home free and clear, drive a newer vehicle, and still have some savings in the bank are surprised to find they qualify for Medicare Savings Programs once they understand what is actually counted.
The bottom line is that the asset limit — while real — applies to a much narrower slice of your financial picture than most people assume. For many retirees living on Social Security, even after accounting for all countable assets, they fall well within the qualifying range.
What About a Spouse's Assets?
If you are married, the rules combine both spouses' countable resources, but the limits are higher for couples than for individuals. The same exemptions apply — one home, one vehicle, personal property — so a married couple can typically own quite a bit before their countable assets reach the limit. Check with your state Medicaid office for the specific combined resource threshold that applies to you.
Does Owning a Second Property Disqualify You?
A second home, vacation property, or rental property generally is counted as a resource because it is not your primary residence. However, if that property is your only source of income and essential to your livelihood, some states may treat it differently. This is worth a direct conversation with your local Medicaid office rather than an assumption either way.
Income Limits Still Apply — But May Be Higher Than You Expect
Beyond assets, eligibility also requires that your monthly income fall within program guidelines. These thresholds vary by state and program level, but as a general reference, individuals earning under roughly $20,000 per year may qualify for at least one level of Medicare Savings Program assistance. Married couples have higher combined income limits.
Income calculations also have exclusions. Not every dollar you receive counts. For example, the first portion of your Social Security income is often excluded, as are certain other types of assistance. Again, your state Medicaid office can walk you through exactly how your income is calculated.
Why So Many People Miss Out on This Benefit
Studies and surveys consistently show that a large percentage of people who are eligible for Medicare Savings Programs never apply. The reasons vary, but near the top of the list is the belief that they own too much or earn too much to bother trying. As you have just read, that belief is often simply not accurate.
The application process itself is managed through your state Medicaid office and is generally straightforward. Many states allow you to apply online, by phone, or in person. There is no cost to apply, and if you are found eligible, coverage can sometimes be applied retroactively.
Take the Next Step — It Only Takes a Few Minutes to Find Out
If anything in this article made you think, maybe I should actually look into this — that instinct is worth following. The worst that can happen is you find out you don't qualify. The best that can happen is you start saving hundreds or thousands of dollars every year on Medicare costs you are currently paying out of pocket.
- Visit Medicare.gov to learn more about Medicare Savings Programs and find a link to your state's Medicaid office.
- Call 1-800-MEDICARE (1-800-633-4227) to speak with someone who can point you toward the right application in your state.
- Contact your State Health Insurance Assistance Program (SHIP) — a free counseling service available in every state — for personalized, unbiased help navigating your options.
You worked hard. These programs exist precisely for people in your situation. Do not let a misunderstanding about Medicare Savings Programs asset limits and what counts stand between you and the help you have earned.
Advertisement
