Colorado Income Disregard Medicare Savings
The published income limit for Colorado's QMB program is $1,350 per month for an individual. Your parent's gross Social Security is $1,365. Looks like they miss by $15. Except they don't — because Colorado applies a $20 monthly disregard that most families don't know about.
The $20 Unearned Income Disregard
Under 10 CCR 2505-10 § 8.100.5, Colorado follows the standard SSI-related income methodology for Medicare Savings Programs. The first $20 of monthly unearned income is disregarded — subtracted from gross income before comparing against the published limits.
For a senior whose only income is Social Security, the math is simple:
Gross Social Security: $1,365
Less $20 disregard: -$20
Net countable income: $1,345
QMB individual limit: $1,350
Result: Qualifies
That $20 disregard turns a denial into an approval. It's the single most common reason people abandon an application they would have won.
Earned Income Gets a Bigger Disregard
For seniors who still work part-time, the earned income disregard is much more generous:
- If any of the $20 general disregard wasn't used against unearned income (i.e., total unearned income was less than $20), the unused portion applies to earned income first
- Then the first $65 of monthly gross earned income is disregarded
- Then half of the remaining earned income is disregarded
So a senior with $1,200/month Social Security and $400/month from a part-time job:
Unearned income: $1,200 - $20 = $1,180
Earned income: $400 - $65 = $335, then ÷ 2 = $167.50
Total countable income: $1,180 + $167.50 = $1,347.50
QMB limit: $1,350
Result: Qualifies
Without the disregards, their gross income is $1,600 — well above the QMB limit and even above the SLMB limit. With the disregards, they qualify for the most comprehensive tier.
What Gross Income Means
A critical mistake families make: using the Social Security deposit amount instead of the gross benefit. The monthly deposit is already reduced by the Part B premium ($202.90 in 2026). Colorado evaluates gross Social Security — the full amount before the Part B deduction, before voluntary tax withholding, and before any other deductions.
The gross amount is on the Social Security Award Letter or the annual COLA notice. It's also visible in the my Social Security online account.
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Income That Doesn't Count
Not everything flowing into your parent's finances counts as income:
- SSI payments — completely excluded
- SNAP/Food stamps — not countable income
- LEAP energy assistance — excluded
- In-kind support from family members (shared food, shelter provided by an adult child) — not counted
- Irregular/infrequent income under $20/month (unearned) or $10/month (earned)
This means an adult child paying for a parent's groceries or letting them live rent-free does not add to the parent's countable income.
Resource Exclusions
Colorado's resource limit for QMB, SLMB, and QI-1 is $11,450 for an individual and $17,910 for a couple. But many assets families worry about are completely excluded:
- Primary home — exempt regardless of value
- One vehicle — exempt regardless of value
- Burial plots — exempt for applicant and immediate family
- Burial fund — up to $1,500 per person set aside in a revocable burial account, prepaid contract, or life insurance cash value
- Household goods and personal effects — all exempt
What does count: checking accounts, savings accounts, CDs, stocks, bonds, mutual funds, non-exempt real estate (a second property), and liquid IRA or annuity balances.
The CBMS Calculation
County eligibility workers enter all income and resource data into the Colorado Benefits Management System. CBMS applies the disregards automatically and compares the result against current-year thresholds. The published limits already represent net countable income after disregards — so when HCPF says the QMB limit is $1,350, that's the number your parent's income must fall at or below after the $20 (and any earned income) disregard.
Our Colorado Medicare Savings Programs & Extra Help Guide includes a self-calculation worksheet that mirrors the CBMS methodology, so you can determine eligibility before applying — and catch any county calculation errors after the decision.
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