Alabama Medicare Savings Program Income Limits 2026
Alabama updates its Medicare Savings Program income limits every February, after the new Federal Poverty Level guidelines are published. The 2026 numbers took effect February 1, and they already incorporate the standard $20 monthly income disregard — a detail that trips up many applicants who subtract $20 themselves and think they qualify at a lower income than they actually do.
2026 Income Limits by Program
QMB (Qualified Medicare Beneficiary) — up to $1,350 per month for an individual, $1,824 for a married couple. QMB pays the Part B premium, Part A premium (if applicable), and all Medicare deductibles, coinsurance, and copayments.
SLMB (Specified Low-Income Medicare Beneficiary) — up to $1,616 per month individual, $2,184 for a couple. SLMB pays the Part B premium only ($202.90/month in 2026).
QI (Qualifying Individual) — up to $1,816 per month individual, $2,455 for a couple. QI also pays the Part B premium only. It is funded from a capped federal block grant allocated on a first-come, first-served basis.
These published thresholds are the numbers Alabama Medicaid actually tests against. The $20 general income disregard has already been factored in.
How the $20 Income Disregard Actually Works
The $20 general disregard is baked into Alabama's official published thresholds. Here is what that means in practice: the QMB limit of $1,350 for an individual already reflects the disregard. A beneficiary with $1,350 in gross Social Security qualifies for QMB. There is no additional $20 to subtract.
Where the disregard does matter is when you are looking at raw Federal Poverty Level percentages. QMB corresponds to 100% FPL, which in 2026 would be roughly $1,330 per month. Alabama adds the $20 disregard on top, raising the effective threshold to $1,350.
Calculating Countable Income: A Worked Example
Alabama counts income using SSI-related rules. Unearned income (Social Security, pensions, VA benefits) gets the $20 general disregard. Earned income gets a $65 disregard plus a 50% reduction on the remainder.
Take an unmarried applicant receiving $1,355 per month in gross Social Security and $145 per month from part-time work:
- Unearned income: $1,355 minus the $20 disregard = $1,335 countable
- Earned income: $145 minus $65 disregard = $80, then divided by 2 = $40 countable
- Total countable income: $1,335 + $40 = $1,375
At $1,375, this applicant exceeds the QMB limit ($1,350) but falls well below the SLMB ceiling ($1,616). Alabama Medicaid would approve SLMB, which still pays the full $202.90 monthly Part B premium and triggers automatic Extra Help for prescriptions.
The critical detail: Alabama measures gross Social Security — the amount before Part B premiums, tax withholding, or any other deductions. The net direct deposit shown on a bank statement is not the right number. Use the SSA-1099 or the annual benefit adjustment letter.
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The COLA Disregard in January
Every January, the Social Security cost-of-living adjustment raises benefit payments. But the new Federal Poverty Level guidelines are not published until late January, and Alabama does not adopt them until February 1. To prevent beneficiaries from losing MSP eligibility during this gap, Alabama Medicaid applies a mandatory COLA disregard throughout January — holding the beneficiary's countable income at the pre-COLA level until the higher FPL limits take effect.
Social Security Fairness Act Impact
The Social Security Fairness Act, signed January 5, 2025, repealed the Windfall Elimination Provision and the Government Pension Offset for benefits payable January 2024 onward. SSA began paying retroactive adjustments in February 2025, and implementation is complete. Alabama public service retirees whose Social Security was reduced by these provisions had applicable benefits adjusted; those higher gross payments count as unearned income for MSP purposes. Some beneficiaries who previously qualified for QMB at the lower reduced benefit may now fall into the SLMB tier instead. The SLMB tier still pays the Part B premium, but it does not cover cost-sharing.
If you are not sure which tier a parent qualifies for after the adjustment, the Alabama Medicare Savings Programs & Extra Help Guide includes an eligibility worksheet that walks through the income calculation step by step, including the disregards for both earned and unearned income.
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