Medicare Savings Programs Income Calculation (Archive)

The purpose of the income calculation is to determine a person’s countable net income Income remaining after subtracting each program's deductions and disregards from gross income.. This net income will be compared to the appropriate income standard to determine if the client is income eligible for QMB Qualified Medicare Beneficiary. A Medicare Savings Program which pays for some Medicare expenses including premiums, co-payments and deductibles., SLMB Service Limited Medicare Beneficiary. A Medicare Savings Program that pays for the Medicare Part B premium., QI Qualified Individual. A Medicare Savings Program which pays for the Medicare Part B premium. and QWD Qualified Working Disabled Adult. A person eligible for payment of the Medicare Part A premium. The person cannot receive MA or QMB benefits..

Note:  Follow this income calculation when determining Medicare Savings Programs (MSP) eligibility regardless if the client is in an LTCF Long-Term Care Facility. A place such as a skilled nursing facility, Intermediate Care Facility for the Developmentally Disabled (ICF/DD) or medical hospital in which the individual receives skilled nursing services. Group Residential Housing (GRH) and Housing with Services Establishments are not long-term care facilities. or receiving EW services.

Income calculation steps for the Medicare Savings Programs are:

1. Determine countable gross income.

2. Deduct disregards and deductions in the listed order to arrive at countable net income:

Note:  The rules for whom and when a disregard or deduction can be used are found in the section of the same name.

l  Unearned Income:

a. Widow/Widower Disregard.

b. Pickle Disregard.

c. Disabled Adult Child Disregard.

d. RSDI Cost of Living Adjustment Disregard.

e. PASS Deduction.

f. Standard Deduction.

g. LTC/EW only:  Spousal Allocation.

h. LTC/EW only:  Family Member Allocation.

l  Earned Income:

a. PASS Deduction.

b. Blind Disabled Student Child Disregard.

c. Standard Deduction remaining after use for unearned income.

d. $65 Earned Income Disregard.

e. Work Expense for disabled basis of eligibility.

f. One-half of remaining earned income.

g. Work Expense for blind basis of eligibility.

h. LTC/EW only:  Spousal Allocation remaining after use for unearned income.

i. LTC/EW only:  Family Member Allocation remaining after use for unearned income.

3. Compare the appropriate income standard to the net income to determine if the client is income eligible.

l  If the client’s income is at or below the income standard the client is income eligible.

l  If the client’s net income exceeds the income standard the client is not eligible for the program.

Top of Page