Montana's $20 Income Disregard for Medicare Savings Programs

Gross Income Is Not Countable Income

The single biggest reason people don't apply for Montana's Medicare Savings Programs is a misunderstanding: they look at their gross Social Security payment, compare it to the published income limit, and assume they're over. But DPHHS doesn't determine eligibility from the gross number alone. It applies a sequence of disregards that can drop your countable income well below the published threshold.

The $20 General Disregard

The first $20 of unearned income each month is subtracted before anything else. Unearned income includes Social Security Title II benefits, civil service annuities, private pensions, and VA non-service-connected disability payments.

For most MSP applicants, Social Security is the primary income source. A senior receiving $1,350/month in Social Security — the gross QMB limit — actually has a countable income of $1,330 after the disregard. That $1,330 equals the QMB countable threshold exactly, so they qualify.

This $20 difference matters. It means the effective QMB ceiling for a Social Security-only household is $1,350 gross, not $1,330.

Earned Income Disregards

If the applicant or their spouse works part-time, additional disregards apply:

1. Subtract the first $65 from gross monthly earned income
2. Divide the remainder by 2

The result is your countable earned income. Added to your countable unearned income, this gives your total countable figure.

Worked example: Your parent receives $1,200 in Social Security and earns $400/month from part-time work.

• Unearned: $1,200 − $20 = $1,180 countable
• Earned: $400 − $65 = $335 ÷ 2 = $167.50 countable
• Total countable: $1,347.50

That's above QMB's $1,330 countable limit but under SLMB's $1,596 — so your parent qualifies for SLMB, and Montana pays the $202.90 monthly Part B premium.

Without the disregards, gross income would be $1,600, and you might assume they don't qualify for any program. With the disregards, they get $2,434/year in Part B premium relief.

The COLA Disregard

Each January, Social Security applies a cost-of-living adjustment that can push gross income above the previous year's MSP limits. Montana protects current enrollees with a COLA disregard during the first months of the year, preventing automatic termination from a small annual increase.

DPHHS updates its own MSP income limits on April 1 to incorporate the new federal poverty guidelines. Between January and March, the COLA disregard bridges the gap. If the new limits still don't reach your adjusted income, DPHHS evaluates whether a different program (SLMB instead of QMB, for example) is appropriate before terminating coverage.

Spousal Deeming

When only one spouse applies, income from the non-applying spouse goes through a deeming calculation. A portion is allocated to the non-applicant spouse's living expenses before the remainder is compared against individual limits. Spouses who are legally separated or living in separate households for more than one calendar month are treated as individuals — no deeming applies.

The income of adult children living in the same household is never counted, regardless of how much they earn.

For step-by-step income worksheets with space to calculate your parent's exact countable income, see the Montana Medicare Savings Programs guide.

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