The Part B premium this year is 202.90 dollars a month, deducted from the Social Security payment before it arrives. A program pays it for people below a certain income, and also pays the Part B deductible, the Part A hospital deductible and every coinsurance amount Medicare would otherwise leave. It is called the Qualified Medicare Beneficiary program, it is run by state Medicaid agencies, and enrolling in it automatically confers the prescription drug subsidy the Social Security Administration values at about 5,700 dollars a year.
The income line for a single applicant this year is 1,350 dollars a month, the asset limit 9,950 dollars. Roughly six million people who qualify are not enrolled. Recent estimates put take-up at 64 percent for the premium-and-cost-sharing program, 63 percent for the premium-only version and 56 percent for the third tier.
What the Four Programs Do
The structure is four programs stacked by income. The first covers the Part B premium plus all Part A and Part B deductibles, coinsurance and copayments, at 100 percent of the federal poverty level. The second and third cover only the Part B premium, at 120 and 135 percent, with the third requiring annual reapplication and funded first come, first served. A fourth covers the Part A premium for working people under 65 who lost premium-free coverage.
The first carries a protection most enrollees do not know they have. Federal law bars every Medicare provider and supplier, including pharmacies, from billing an enrollee in that program for any Part A or Part B cost sharing, and it cannot be waived even voluntarily. Regulators say violations persist. A joint warning from the consumer bureau and Medicare in 2024 found enrollment status came up in about 17 percent of Medicare-related consumer complaints, though no agency publishes a violation rate.
The Mechanics of an Asset Test That Screens Out Almost Nobody
The asset limit is where the design turns against itself. An analysis published in April found that 80 percent of married income-eligible applicants held total household assets of 9,260 dollars or less, and 80 percent of unmarried applicants held 5,832 or less, against limits of 14,910 and 9,950. The test is set above nearly everyone it is meant to screen.
What it does instead is create work. Verifying assets means documenting accounts, and life insurance and burial funds usually require manual review because the Social Security Administration and the state count them differently. A person who cleared the federal test for the drug subsidy can still fail the state's test on the same facts. The researchers' conclusion was that the test creates bureaucratic cost without program savings.
Eleven states and the District of Columbia have dropped the asset limit entirely: Alabama, Arizona, Connecticut, Delaware, Louisiana, Maine, Mississippi, New Mexico, New York, Oregon and Vermont. New York, which dropped its test in 2008, added roughly 196,000 people receiving more assistance in a single year.
The Enrollment Route That Runs One Way
There is one more structural oddity. Enrolling in any of the savings programs automatically confers the full drug subsidy, with no separate application. The reverse is not true: qualifying for the drug subsidy does not enroll anyone in the program that pays their premium, which is why Medicare estimates more than a million people receiving the full drug subsidy are not in a savings program despite nearly identical eligibility rules.
A 2023 federal rule was written to close exactly that gap. It required states to treat the Social Security data on drug subsidy applicants as an application for the savings program, to accept self-attestation for certain income and resources and to simplify life insurance verification. Medicare projected more than 860,000 additional enrollees. Most of those provisions had a compliance date of April 2026 and never took effect: the budget law enacted in July 2025 barred enforcement until October 2034. One piece survives, the automatic enrollment of Supplemental Security Income recipients in October 2024, and states remain free to adopt the rest voluntarily.
Where the Applications Actually Come From
Underneath all this sits a finding about who enrolls. Federal analysts found non-enrollment concentrated among people with no prior contact with means-tested programs, and that receiving food assistance was associated with a 38.6 percentage point increase in the likelihood of enrolling. The strongest predictor of getting help is having already got help once.
A program that pays a premium, a deductible and every coinsurance amount, worth well over eight thousand dollars a year before anyone is hospitalized, is available only to people who know to apply to their state for it. The application goes to the state Medicaid office, not to Social Security or Medicare, which is the most common reason it is never filed. Two things are worth checking: whether your state has dropped the asset test, since eleven have, and whether you already receive the drug subsidy, because that means the income test is very likely met and only the state application is missing.
— John Stone