Michigan Medicare Savings Program and the Social Security Fairness Act

The Social Security Fairness Act (H.R. 82), signed into law on January 5, 2025, eliminated the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) retroactively to January 2024. For retired Michigan public school teachers, municipal workers, and other public pensioners who were affected by these provisions, Social Security benefits went up — sometimes by hundreds of dollars per month, plus a lump-sum retroactive payment covering months back to January 2024.

That's genuinely good news. But for families who rely on Michigan's Medicare Savings Programs, the income increase creates a problem: the higher Social Security check may push your parent over the MSP income limits.

What Actually Changed

Before the repeal, WEP reduced Social Security retirement benefits for people who also received a government pension from work not covered by Social Security — common among Michigan public employees. GPO reduced or eliminated spousal and survivor Social Security benefits for the same group.

Both provisions are now gone. SSA recalculated benefits for affected individuals, issued retroactive lump-sum payments starting in February 2025, and increased ongoing monthly benefit amounts. Implementation is complete.

This means a retired Michigan teacher who was receiving $900/month in Social Security (reduced by WEP) might now receive $1,400/month. That $500/month increase could shift them from well within QMB income limits to over the QMB threshold — or even above SLMB or ALMB limits.

How Michigan MSP Eligibility Is Affected

MDHHS evaluates MSP income using your parent's gross Social Security benefit — the amount before any deductions for Part B premiums, taxes, or garnishments. The $20 standard disregard still applies, but the starting number is now higher for anyone whose benefits increased under the Fairness Act.

Here's the math that matters. The 2026 QMB individual income limit is $1,350/month after the $20 disregard. If your parent's gross Social Security went from $1,200 to $1,500 due to the WEP repeal, their countable income becomes $1,480 ($1,500 minus $20) — over the QMB limit of $1,350 but under the SLMB limit of $1,616.

In that scenario, the countable income is above the QMB limit but within the SLMB band, so MDHHS could move your parent from QMB to SLMB after review. The practical effect: they keep the Part B premium paid ($202.90/month), but lose QMB's cost-sharing protection — meaning they're now responsible for Medicare deductibles and coinsurance out of pocket.

Whether that's a net win or net loss depends on the size of the Social Security increase versus the value of the QMB cost-sharing protection they lose. For someone with frequent medical visits and hospitalizations, QMB's cost-sharing coverage could exceed the value of the higher Social Security check.

The Retroactive Lump Sum: Does It Count?

SSA issued retroactive payments to affected beneficiaries along with higher ongoing monthly benefit amounts. The higher monthly amount can affect MSP income eligibility. For how MDHHS counts a retroactive payment as a resource, ask the agency before relying on it when assessing eligibility or making spending decisions.

What to Do Right Now

Check your parent's current gross Social Security benefit. Log into my.ssa.gov or request a current Benefit Verification Letter from SSA. Compare the gross amount against the 2026 MSP income limits to see which category — QMB, SLMB, or ALMB — your parent now falls into.

Report income changes promptly. Michigan requires MSP beneficiaries to report changes in unearned income to MDHHS within 10 calendar days. Keep a copy of the report.

Don't assume the worst. Even if your parent's income increased, the $20 disregard, earned income exclusions (if applicable), and other deductions still apply. Run the numbers with all applicable disregards before concluding they've lost eligibility.

Watch for the redetermination notice. MDHHS will reassess your parent's eligibility during the annual redetermination cycle. If the caseworker uses the updated Social Security amount, the category determination may change. Your parent has the right to appeal a downgrade or termination within 90 calendar days.

Contact MMAP. MMAP counselors can help model the impact of the income change on your parent's overall Medicare costs. They can compare what your parent saves under the higher Social Security check versus what they lose if they drop from QMB to SLMB — and help evaluate whether alternative coverage options (like a Medicare Supplement plan) could offset the lost cost-sharing protection.

Our Michigan Medicare Savings Programs & Extra Help Guide includes income worksheets built for exactly this scenario — mapping the new post-Fairness Act benefit amount against every MSP tier, calculating the net financial impact of a category change, and preparing for the redetermination.

See more Michigan guides →