Medicare Savings Programs Income Calculation (Archive)

The purpose of the income calculation is to determine a person’s net income Income remaining after subtracting each program's deductions and disregards from gross income.. This net income is 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.

The income calculation steps for the Medicare Savings Programs are:

1. Determine gross income. See Determining Gross Income - MA/GAMC.

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

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 (Impairment-Related Work Expense Deduction).

f. One-half of remaining earned income.

g. Work Expense for blind basis of eligibility (Blind Work Expense Deduction).

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.

Note:  Clients whose disability is blindness cannot use the Impairment-Related Work Expense Deduction, but must instead use the Blind Work Expense Deduction. See Work Expense Deduction for more information.

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.

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