Written by Jordan McElwain — Updated: Friday, September 1, 2023
Medicare prescription drug costs can be too high for people with low incomes and resources. Medicare’s Extra Help Program provides low-income Medicare beneficiaries with assistance for costs associated with Medicare Part D.
Medicare Part D is Medicare’s prescription drug coverage. Original Medicare does not provide prescription coverage. Beneficiaries can get Part D coverage through either a Medicare Advantage plan or a stand-alone Medicare prescription drug plan. Medicare Advantage and drug plan pricing and availability varies by county, and coverage varies from plan to plan. So, when looking at Medicare plans for Part D coverage, beneficiaries should make sure their specific prescriptions are covered.
Medicare’s Extra Help program is also commonly known as the Part D low income subsidy (or LIS). Extra Help provides eligible individuals with financial aid to cover Medicare Part D (prescription coverage) premiums, deductibles, and coinsurance. If you receive Extra Help, you will also not be charged a Part D penalty.
Many people qualify for Extra Help automatically and others may need to apply.
If you receive full Medicaid benefits, are enrolled in a Medicare Savings Program that pays for your Part B premium, or receive Supplemental Security Income (SSI) benefits, you will automatically receive Extra Help.
If you don’t meet these criteria, you may still be eligible for Extra Help—you just need to apply.
If you have limited income and resources but don’t automatically qualify for Extra Help, you can apply for benefits. The income and resource limits change each year and are based on your income from the previous year. Below are the 2023 income and resource limits for Extra Help eligibility.
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If you aren’t already enrolled in a Part D (prescription drug) plan, you’ll be automatically enrolled in one. You’ll receive a letter explaining your new Medicare prescription drug plan and what you’ll pay based on the level of Extra Help you’re eligible for.
If you want to change your drug plan, you can. And if your income changes, you’ll continue to receive Extra Help through the end of the year, but may no longer be eligible after December 31. If you meet income and resource requirements for the next year, you won’t receive a letter from Medicare or Social Security, and you’ll continue to receive Extra Help.
There are two levels of Extra Help: full and partial. The benefits of each change each year.
If you receive Full Extra Help benefits, your Part D drug plan premium will be $0. You’ll also have a $0 deductible, which means you don’t need to pay anything before Medicare starts paying its share of your drug costs. Your prescription costs will also be lower.
If your total prescription costs (including what both you and your drug plan pay) reach $7,400, you’ll pay $0 for your covered prescriptions for the remainder of the year.
If you’re also in the Qualified Medicare Beneficiary (QMB) Medicare Savings Program, you’ll pay no more than $4.30 for each of your covered prescriptions.
If you receive Partial Extra Help benefits, you’ll pay between 0-75% of your drug plan’s premium. Your exact premium depends on both the plan you’re on and your income level.
You’ll have a deductible of no more than $104, and you’ll pay no more than 15% of the cost for each covered prescription. Prescription prices will vary, depending on the prescriptions you’re taking and their level of coverage on your specific drug plan.
If your total prescription costs (including what both you and your drug plan pay) reach $7,400, you’ll pay:
Extra Help (the Part D Low Income Subsidy) only helps Medicare beneficiaries with prescription coverage costs. Medicare Savings Programs can help you save on premiums and out-of-pocket costs associated with Parts A & B. Supplemental Security Income (SSI) recipients receive monthly payments that can be used to pay for housing, food, medical, and dental expenses. In addition to these government programs, Medicare beneficiaries can sometimes save money by switching plans during the Open Enrollment Period, opting for more affordable prescriptions, or even changing pharmacies.