Medicare Savings Programs

4.2.3.3 Income

Medicare Savings Programs (MSP) follow many of the same income eligibility policies as Medical Assistance for People Who Are Age 65 or Older and People Who Are Blind or Have a Disability (MA-ABD). Specific MSP income policies and links to the relevant MA-ABD income policies are included.

Income Limit

To be eligible for a MSP a person’s income must be less than or equal to the applicable federal poverty guidelines income limit. The income limit for an MSP is determined by household composition and family size. See MSP Household Composition and Family Size policy for more information about determining household composition. Income deeming rules determine whose income counts for a person. See the MA-ABD Income Deeming policy for more information about whose income’s count.

MSP income limits are:

  • 100% FPG Qualified Medicare Beneficiary (QMB)

  • 120% FPG Service Limited Medicare Beneficiary (SLMB)

  • 135% FPG Qualified Individual (QI)

  • 200% FPG Qualified Working Disabled (QWD)

See Minnesota Insurance Affordability Programs Income and Asset Guidelines (DHS-3461A) for information about income limits based on the household size.

Income Policies

For MSPs, all other factors in income eligibility follow MA-ABD except as follows:

MSP Disregards and Deductions

Disregards and deductions for MSP income are applied different than for MA-ABD income.

  • Unearned income

    The following list are the disregards and deductions that are deducted from the specific unearned income:

    • Unearned Lump Sum Income Disregard

    • Child Support Disregard

  • The following disregards and deductions are then deducted in the specific order listed:

    • Disabled Widow and Widower Disregard

    • Widow and Widower Disregard

    • Pickle Disregard

    • Disabled Adult Child Disregard

    • Retirement, Survivors, Disability Insurance (RSDI) Cost of Living Adjustment (COLA) disregard

    • Plan to Achieve Self Support (PASS) Deduction

    • Standard Deduction. This deduction subtracts $20 from the income used to determine MSP eligibility. The deduction is first applied to unearned income. When a person has less than $20 of unearned income, the remainder of the deduction is applied to earned income. An eligible household receives only one $20 exclusion per month.

    • Community Spouse Allocation. This deduction is applied only for people receiving services in a Long Term Care (LTC) facility or on the Elderly Waiver( EW). The deduction is first applied to unearned income. the remainder, if any, is then applied to a person's earned income.

    • Family Allocation. This deduction is applied only for people receiving services in an LTC facility or on EW. The deduction is first applied to unearned income. The remainder, if any, is then applied to a person's earned income.

  • Earned Income

    The Earned Lump Sum Income Disregard is applied to earned lump sum income.

    The following disregards and deductions are then deduction in the specific order listed:

    • PASS Deduction

    • Student Earned Income Exclusion

    • Standard Deduction. Any remaining amount from Standard Deduction after applying it to unearned income is applied to a person's earned income.

    • Earned Income Disregard

    • Impairment Related Work Expense Deduction

    • Remaining Earned Income Disregard

    • Blind Work Expense Deduction

    • Community Spouse Allocation. Any remaining amount from the Community Spouse Allocation after applying it to unearned income is applied to earned income for people receiving services in an LTC facility or on EW.

    • Family Allocation. Any remaining amount from the Family Allocation after applying it to unearned income is applied to earned income for people receiving services in an LTC facility or on EW.

MSP Excluded Income

Aid and Attendance benefits and Allowances for Unusual Medical Expenses from the Veteran's Administration are excluded income.

See the following policies for more information.

  1. MA-ABD Income Methodology

  2. MA-ABD Countable Income

  3. MA-ABD Income Deeming

  4. MA-ABD Sponsor Income Deeming

  5. MA-ABD Excluded Income

Legal Citations

Minnesota Statutes, section 256B.056, subdivision 1a

Minnesota Statutes, section 256B.056, subdivision 4

Minnesota Statutes, section 256B.056, subdivision 5

Minnesota Statutes, section 256B.057, subdivision 3

Minnesota Statutes, section 256B.057, subdivision 4

United States Code, title 42, section 1382a

United States Code, title 42, section 1396d(p)

United States Code, title 42, section 1396d(s)

Published: January 1, 2018

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