Medicare Low Income Subsidies for Beneficiaries
Assistance with Part D Costs
For individuals enrolled in the Medicare program who meet certain income and asset limits, there is a government program that assists with the annual deductible, monthly premium, and copayment expenses associated with a Medicare Part D prescription drug plan. This program is known as "Extra Help" or the Low Income Subsidy (LIS).
The government evaluates income and asset levels of those that apply for the Extra Help program. Qualifying individuals may not only receive help with drug costs but, if income and assets are sufficiently low, these individuals may also have their monthly premium paid by the government. In 2013, those who qualified paid no more than $2.65 for generic and $6.60 for brand name prescription drugs, or a 5% coinsurance. These numbers increased to $2.55 and $6.35 in 2014, or a 5% coinsurance. Furthermore, individuals enrolled in the Extra Help program do not have a drug coverage gap (i.e. the donut hole).
Individuals who are eligible for Extra Help are given benefits based on their degree of financial need, which is determined by government analysis. There are partial and full subsidies available for those who qualify. In 2014, a single person earning less than $17,505 and having resources less than $13,440 qualified for the Extra Help program. For a married person, the threshold was $23,595 in joint income and resources less than $26,860. Resources included in this number are stocks, bonds, and money in checking and savings accounts. People who live in Alaska or Hawaii, support other family members, or have earnings from work may have higher limits.
Eligibility for Low Income Subsidy
Some individuals automatically qualify for this prescription assistance program, including those who are on Medicare and either have full Medicaid coverage, are enrolled in a Medicare Savings Program, or receive Supplement Security Income (SSI) benefits. Automatic qualification may change on an annual basis depending on your income and resources. Those who no longer qualify for Extra Help will receive a notice in the mail by the end of September.
If you do not qualify for the Extra Help program, you may be qualified for another program within your state that helps pay prescription drug costs. To learn more about your options, you can contact your local Medicaid office or your State Health Insurance Program (SHIP) for more information. Additionally, if your income and resource levels change, you may always re-apply for the Extra Help program.
Extra Help is run by the Social Security Administration. Individuals can apply for the program online.
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Medicare Advantage Plans, sometimes called "Part C" or "MA Plans," are offered by private companies approved by Medicare and provide Medicare Part A and Part B coverage. Medicare prescription drug coverage is insurance run by an insurance company or other private company approved by Medicare. A Medicare Supplement plan is a health insurance plan provided by a private company that fills in the "gaps" in original Medicare coverage.