State and Federal Options to Lower Your Costs
Paying for health care on a fixed income is hard. Even with Medicare, the premiums, deductibles, drug costs, and copays add up fast.
Here's the good news. Several federal and state programs help people with Medicare cover these costs. The problem is that many people who qualify never apply. Some don't know the programs exist. Others assume they earn too much. That assumption can cost them real money.
The programs below can lower your premiums, cut your drug costs, and help you avoid gaps in care. It's worth a few minutes to see what you might qualify for.
How Medicare and Medicaid Work Together
Medicare is the federal health insurance program for people 65 and older, plus some younger people who have disabilities.
Medicaid is a joint federal and state program for people with limited income and resources.
Some people qualify for both. They're called "dual eligibles." If you have both, Medicare pays first for the services it can cover. Medicaid may help with your Medicare premiums, deductibles, and copays, along with some services Medicare doesn't cover, like long-term care.
Many dual eligibles join a special kind of Medicare Advantage plan called a Dual Eligible Special Needs Plan (D-SNP). These plans coordinate your Medicare and Medicaid benefits in one place.
Eligibility rules vary by state. To find out if you qualify, contact your state Medicaid office or your local State Health Insurance Assistance Program (SHIP).
Medicare Savings Programs
If you are enrolled in Medicaid, you may be eligible for one of the Medicare Savings Programs, which are some of the most valuable forms of help and are often overlooked. These state-run programs help pay some or all of your Medicare Part A and Part B costs if your income and resources are limited.
There are four programs:
- Qualified Medicare Beneficiary (QMB) offers the most help. It can cover your Part A and Part B premiums, deductibles, coinsurance, and copayments. If you're in QMB, providers generally can't bill you for services Medicare covers. If you get a bill anyway, tell the provider you're in the QMB program. Additionally, if you are an eligible QMB and qualify for full Medicaid benefits, you may benefit from the QMB+ program, in which Medicaid covers services not covered by Medicare, such as long-term nursing home care or personal care services.
- Specified Low-Income Medicare Beneficiary (SLMB) helps pay your Part B premium. It's for people whose income is a little above the QMB limit.
- Qualifying Individual (QI) also helps pay your Part B premium. Funding is limited each year and goes out first-come, first-served, so apply early.
- Qualified Disabled and Working Individual (QDWI) helps pay the Part A premium for certain people with disabilities who went back to work.
Income and resource limits for these program vary by state. If you qualify for #1 - #3 above, you automatically qualify for Extra Help with your drug costs.
Extra Help With Prescription Drugs
Extra Help (also known as the Low-Income Subsidy, or LIS) lowers or eliminates what you pay for Medicare drug coverage (Part D). That includes your premium, deductible, and the cost of each prescription.
You qualify automatically if you already have any of these:
- Full Medicaid coverage
- Supplemental Security Income (SSI)
- A Medicare Savings Program
If you are not enrolled in any of those three programs, you must meet income and asset limits to qualify (per the Social Security Administration):
- For individuals in 2026, the annual income limit is $23,475 and the resource limit is $18,090.
- For married couples in 2026, the annual income limit is $31,725 and the resource limit is $36,100.
Income includes wages, alimony, annuities, self-employment income, pensions, rental income, Social Security benefits, veterans benefits, and worker’s compensation. It doesn’t include assistance from others to pay for household expenses, disaster assistance, earned income tax credit payments, home energy assistance, housing assistance, medical treatment and drugs, scholarships and education grants, Supplemental Nutrition Assistance Program (SNAP) benefits, or victim compensation payments.
Resources include money in bank accounts, stocks, bonds, and retirement accounts. They don't include your home, one car, up to $1,500 for burial costs, a burial plot, or personal belongings. Limits can change each year, so check the current numbers on Medicare.gov before you apply.
The savings from Extra Help can add up. In 2026, people with Extra Help pay no monthly premium and no deductible for their drug plan. They pay no more than $5.10 for each generic drug and $12.65 for each brand-name drug. Once their out-of-pocket drug costs reach $2,100 for the year, they pay nothing more for covered drugs.
If you are not enrolled automatically, you can apply any time at SSA.gov/medicare/part-d-extra-help. When you apply, Social Security can start a Medicare Savings Program application for you at the same time.
One more thing worth knowing. Even if you don't qualify for Extra Help, the $2,100 yearly cap on out-of-pocket Part D drug costs applies to everyone with a drug plan in 2026.
State Pharmaceutical Assistance Programs
Some states run their own State Pharmaceutical Assistance Programs (SPAPs). These help residents pay for prescriptions, Part D premiums, or other drug costs.
Programs differ a lot from state to state. Some give direct financial help. Others help you coordinate benefits with your Part D plan. Not every state has one. To find out, ask your local SHIP or visit go.Medicare.gov/spap.
Help From Drug Manufacturers
Many drug companies offer Patient Assistance Programs for people who meet certain requirements. These can lower the cost of specific medications. You can search for programs at Medicare.gov.
Help With Long-Term Care
Here's something that surprises a lot of people. Medicare generally does not pay for long-term custodial care, like an extended nursing home stay. Medicaid is the main payer for those services.
Depending on your state and your finances, Medicaid may help cover:
- Nursing home care
- Assisted living services
- In-home caregiving and home health aides
- Community-based long-term care
Medicaid long-term care rules are complex. Many families get help from an elder law attorney, a Medicaid planner, or their local Area Agency on Aging before they apply.
Where to Get Free Help Applying
There are a lot of resources out there to help you navigate the application process. Free, unbiased help is available from:
- Your State Health Insurance Assistance Program (SHIP)
- Your state Medicaid office
- Your local Area Agency on Aging
- Social Security, for Extra Help
- BenefitsCheckUp from the National Council on Aging
- A licensed Medicare insurance agent like us
Many people are eligible who may assume they earn too much to qualify. When in doubt, apply. Even a little help with premiums or prescriptions can save you hundreds, sometimes thousands, of dollars a year.
This article is for general educational purposes only and is not legal, tax, or financial advice. To confirm whether you qualify and get the most current information, contact the official sources listed above or reach out to our office. We're glad to help you explore your options.
