Understanding Medicare Extra Help: A Guide to Low-Income Subsidy Benefits

• Original Medicare does not come with Part D, or prescription drug coverage.
• Those who are low-income and have limited assets may qualify for Extra Help, a Medicare program that can help pay for out-of-pocket costs associated with Part D coverage.
• Some people may automatically qualify and be enrolled in Extra Help, while others must apply if they meet the eligibility requirements.

While the Medicare program helps lower costs associated with healthcare, there is still an amount a Medicare beneficiary must pay out of pocket. For those with financial resource limits, those out-of-pocket Medicare costs, such as Medicare premiums and deductibles, can be difficult to afford.

To help, the federal government offers free help to those who qualify through the Medicare Part D Extra Help Program. This program offers assistance with prescription drug costs for eligible beneficiaries. Continue reading to learn more about this program, Part D costs, and how to request an Extra Help application.

Medicare drug coverage is provided through Medicare Part D. Part D can help pay for prescription medications, including brand-name and generic drugs. Plans are offered by private insurance companies and vary in terms of coverage and costs.

Prescription drug coverage isn’t automatically covered by Original Medicare, so you must enroll in a standalone Part D plan when you shop Medicare plans, either during initial enrollment or the annual enrollment period. Some Medicare Advantage Plans may include Part D drug coverage, but check with your plan’s provider for more information.

Medicare Extra Help, also known as the Low Income Subsidy (LIS), is a Medicare program that helps eligible seniors with limited income and resources pay for Medicare prescription drug coverage.

Extra Help can help reduce out-of-pocket costs for Medicare prescription drug coverage, including:

• Deductibles
• Monthly Premiums
• Coinsurance

To be eligible for Medicare Extra Help, you must meet certain income and resource requirements.

• Your monthly income must be below a certain amount, and you must have limited resources. In 2024, the income limit is $22,590 for individuals and $30,660 for married couples. Resources that count toward eligibility include checking and savings accounts, stocks, bonds, mutual funds, and Individual Retirement Accounts (IRAs).
• You must be enrolled in Medicare Part A or Part B.
• Certain types of income and assets may not be counted towards the eligibility limits. Some examples of what doesn’t count toward eligibility include your home, one car, a burial plot, furniture, and other personal home items.
• Must live in the U.S. (50 states or District of Columbia). This program isn’t offered in the U.S. Virgin Islands, North Mariana Islands, American Samoa, Guam, or Puerto Rico.

Some people automatically qualify for Extra Help, while others have to apply.

Who Qualifies Automatically for Extra Help?

For a person to be automatically enrolled in the Extra Help program, they must either:

• Have full Medicaid coverage
• Receive help from the state paying for Part B premiums
• Receive Supplemental Security Income (SSI) payments.
• Be enrolled in a Medicare Savings Program.

If you automatically qualify, you will receive a letter from the Centers for Medicare and Medicaid Services (CMS) informing you of enrollment.

Who Has To Apply For Extra Help?

If you are not automatically enrolled, you can still apply for enrollment as long as you meet the program’s original eligibility requirements.

Maintaining Eligibility

To maintain eligibility for Medicare Extra Help, you must:

• Continue to meet the income and resource requirements.
• Be enrolled in Medicare Part A or Part B.
• If income or resources change, you may need to reapply for Extra Help.

Medicare Extra Help provides several key benefits, including:

• Access to prescription drug coverage, both brand name and generic (individuals typically pay no more than $11.20 for each brand-name drug and $4.50 for each generic drug covered under the plan).
• Waiving the Part D late enrollment penalty.
• Eligibility for the Special Enrollment Period (SEP) that allows you to enroll or change Part D coverage.
• Potential automatic enrollment in other Medicare Savings Programs, such as Qualified Medicare Beneficiary (QMB) and Specified Low-Income Medicare Beneficiary (SLMB).

Note: For more information on other Medicare Savings Programs, visit this source.

You can apply for Extra Help through the Social Security Administration (SSA) a few ways:

• Online: You can apply online by filling out the application here.
• By phone: You can apply by phone by calling +1 800–772-1213.
• In-person: You can apply in person by visiting your local SSA office.

To avoid scams, make sure you enter this information on a .gov site, not a non Medicare website, such as a .com or .org site. 

Once you find plan, enter in the required information about your financial situation, including income and resources. Documents you will need to have on hand include:

• Bank statements and tax returns
• Individual Retirement Account and 401(k) account balances
• Statements showing any pensions, Veterans’ Benefits, Railroad Retirement Board Benefits, and annuities

What to Expect After Applying

After applying for Medicare Extra Help, the Social Security Administration (SSA) will review your application and contact you if approved. You will receive a letter from the SSA explaining your eligibility and the level of Extra Help you will receive. You can also check your eligibility status online or by contacting the SSA.

Once you’re approved for Extra Help, you can review and select a Part D plan that fits your needs and coverage.

The Limited Income Newly Eligible Transition (LI NET) Program may be an option for those who qualify for Extra Help or Medicaid but currently have no prescription drug coverage.

LINET provides immediate but temporary Medicare Part D coverage for low-income Medicare enrollees and is available for up to two months until you enroll in a Part D plan. If you do not enroll in a Part D plan, Medicare will enroll you in one (unless you opt out of Part D coverage altogether).