Thanks to Advocacy by HCA and Vermonters, the State is Expanding its Medicare Savings Programs

The Office of the Health Care Advocate (HCA) at Vermont Legal Aid is celebrating a set of new laws that are a win for Vermonters on Medicare. Beginning January 1, 2026, lower-income Vermonters who move onto Medicare will no longer be devastated by the loss of financial assistance.

Currently, the income limit for the Medicare Savings Program (MSP) called “QMB” is set to 100% FPL (Federal Poverty Level), but Act 113 of 2024 and Act 27 of 2025, will increase the limit to 150% FPL. This is a significant jump that will help eliminate the “Medicare Cliff” (the drop in Medicaid eligibility for seniors and people with a disability).

The new law will also raise the income threshold for the “QI-1” Medicare Savings Program, which covers the Medicare Part B premium. It will increase from 135% to 202% FPL.

These changes are estimated to make more than 14,000 Vermonters newly eligible for the Medicare Savings Programs, with an estimated annual savings and benefits of $64.7 million for these Vermonters.

The details:

14,322 Vermonters will get to keep $2,220 in their pockets each year

Annual savings for Vermonters: $31.8 million

Eligible Vermonters will have larger Social Security checks because the MSP will pay their Part B premium ($185/month in 2025). This is an economic stimulus for older adults and people with disabilities; it will increase household income by $2,220 if single or $4,440 if married and both spouses have Medicare.

7,774 Vermonters will pay $0 at the doctor and hospital

Annual savings to Vermont hospitals and patients: $2.6 million

The best MSP level covers deductibles and cost-sharing for Medicare Part A (hospital) and Part B (medical) services. It ensures that these Vermonters can get the health care they need, when they need it, and that providers are compensated for this care.

5,725 Vermonters will receive financial help with prescriptions for the first time

Annual value of new Rx benefit for Vermonters: $30.3 million

Being enrolled in an MSP qualifies you for the free and 100% federally funded Low Income Subsidy (LIS). The LIS program will pay eligible Vermonters’ Medicare Part D (prescription drug) premiums and deductibles and significantly lower their co-pays.

The total benefit for Vermonters is estimated to be $64.7 million per year.

The HCA thanks Vermonters who shared their stories, and community partners and legislators who helped push these important changes through!