Louisiana Medicare Savings Program Income Disregard
The $20 That Can Change Your Eligibility
Louisiana applies a mandatory $20/month general income disregard before comparing your income to the Medicare Savings Program thresholds. It sounds small, but when your gross income sits within $20 of a cutoff, this disregard determines whether you qualify for QMB, get bumped to SLMB, or lose eligibility entirely.
The disregard applies first to unearned income — Social Security retirement, SSDI, pensions, VA benefits, annuities. If your total unearned income is less than $20 (unlikely for most MSP applicants), the remaining portion carries over to earned income.
Example: Your gross Social Security is $1,365/month. Without the disregard, you'd exceed the $1,350 QMB limit. With the $20 subtracted, your countable income drops to $1,345 — under the line for QMB, which covers your Part B premium, all deductibles, and all coinsurance.
Earned Income Gets Additional Deductions
If you work while on Medicare, Louisiana applies a more generous set of disregards to your wages or self-employment income:
- Apply any unused portion of the $20 general disregard to earned income first
- Subtract $65 from gross earnings
- Subtract 50% of what remains
Example: You earn $900/month in wages and have no unearned income. General disregard: $20. Earnings after general disregard: $880. Subtract $65: $815. Halve the remainder: $407.50 countable earned income.
These deductions are cumulative and applied in order. They follow SSI-based counting rules in Louisiana Medicaid Eligibility Manual Sections H-1100 (QMB), H-1300 (SLMB), and H-2000 (QI), not the MAGI methodology used for Medicaid expansion.
What Counts as Income
LDH counts gross income — the amount before taxes, premiums, or other deductions. For Social Security specifically, this means the figure on your award letter or 1099, not the net amount deposited after the Part B premium is withheld.
Types of income LDH counts (before disregards):
- Social Security retirement, survivor, and disability benefits (gross)
- Government and private pensions
- VA disability and pension payments
- Interest and dividends
- Annuity income
- Wages and self-employment income
- Railroad Retirement benefits
Cash gifts count as unearned income under Louisiana's SSI-related rules, subject to applicable exclusions and disregards.
Income LDH does not count:
- Retroactive Social Security payments attributable to prior months, including Social Security Fairness Act adjustments (excluded from income in the month received)
- SNAP/food stamp benefits
- Housing assistance (Section 8)
- Energy assistance payments (LIHEAP)
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Spousal Deeming Rules
If you're married and living with your spouse, their income is deemed to you. Both incomes are combined and measured against the couple limit ($1,824 for QMB, $2,184 for SLMB, $2,455 for QI).
If your spouse has non-disabled dependent children in the household, LDH deducts specific allocations for each child before combining income.
Deeming stops the month after you're no longer living together — whether from permanent separation or one spouse entering a care facility. From that point, each person is evaluated individually against the single-person limits.
An adult child's income is never deemed. If your parent lives in your home, your income and assets are completely invisible to LDH for the parent's MSP application. Only the parent's income (and their spouse's, if applicable) matters.
The COLA Disregard Window
Each January, Social Security issues a Cost-of-Living Adjustment that raises gross benefits. The updated Federal Poverty Level guidelines — which set the MSP income limits — typically aren't published until March.
During January and February, Louisiana mandates that LDH disregard the dollar amount of the COLA increase. If your Social Security went up by $50 in January due to the COLA, LDH pretends that $50 doesn't exist until the new FPL limits take effect. This prevents a two-month coverage gap every year for people near the threshold.
The Louisiana Medicare Savings Programs & Extra Help Guide includes a printable income worksheet that walks through the full calculation step by step, covering all disregards and the spousal deeming rules.
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