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Medicare Extra Help Program: Getting Help with Part D Costs

October 6, 2016

If you have Medicare Part D prescription drug coverage through a Medicare Part D Prescription Drug Plan or Medicare Advantage Prescription Drug plan, you may be eligible for help with Part D costs. The Medicare Extra Help program offers financial assistance for Medicare beneficiaries who meet certain income and resource limits and have Medicare Part D.

Also referred to as the Low-Income Subsidy (LIS) program, Extra Help helps pay for expenses like Part D annual deductibles, monthly premiums, copayments, and/or coinsurance. Individuals enrolled in the program won’t enter the Part D coverage gap (also known as the “donut hole“).

Eligibility for the Low-Income Subsidy (Extra Help) program

You may be eligible for the Extra Help program if you meet the following requirements:

  • You have Part A and/or Part B.
  • You live in one of the 50 states or the District of Columbia.

You meet income and asset requirements, which may change every year. Individuals who are eligible for Extra Help are given benefits based on their degree of financial need. There are partial and full subsidies available for those who qualify. Items considered when determining income and resource eligibility include:

  • Bank accounts, including  checking, savings,  and Certificate of Deposit CD) accounts
  • Stocks
  • Bonds, including U.S. Savings Bonds
  • Mutual funds
  • Real estate (other than your primary residence)
  • Individual Retirement Accounts (IRAs)
  • Cash at home or anywhere else

Items that aren’t counted include:

  • Your primary residence
  • One car
  • Personal possessions
  • Furniture
  • Life insurance policies
  • Burial plot
  • Burial expenses (up to $1,500 if you have set aside money for that purpose)

Other factors that may affect your Extra Help eligibility include whether you or your spouse financially supports other family members who live with you; whether you live in Hawaii or Alaska; and whether you earn income from an employer. Because the income requirements may increase every year, you should still apply even if your income and resources are slightly above the limits. You should also reapply if you’re rejected because of income. Visit the Social Security website for the latest information on eligibility for Extra Help.

Automatic enrollment in Extra Help

Some individuals automatically qualify for the Low-Income Subsidy program. You may automatically be eligible for Extra Help if:

  • You’re eligible for both Medicaid and Medicaid (also known as a “dual eligible”) and have full Medicaid coverage.
  • You receive Supplemental Security Income (SSI) benefits.
  • You’re enrolled in a Medicare Savings Program and get help with your Part B premiums.

If you automatically qualify for the Low-Income Subsidy program, Medicare will notify you. You do not need to submit an application in this case, although you will need Medicare prescription drug coverage if you don’t already have prescription coverage.

Automatic qualification may change on an annual basis depending on your income and resources. Just because you’re eligible one year doesn’t guarantee you’ll qualify for automatic enrollment next year. If your financial situation changes and you’re no longer automatically eligible for Extra Help, Medicare will send you a notice by the end of September. You may still be eligible for the LIS program even if you get this notice, but you will need to manually apply for the program.

If your copayment costs under Extra Help have changed for the upcoming year, you’ll get a notice from Medicare in early October with the new copayment amounts you’ll pay. If Medicare doesn’t send you a notice, it means you’re still eligible for Extra Help and your level of assistance under the program hasn’t changed from last year.

Medicare also notifies you every fall if the amount of LIS aid you receive changes.

Applying for Extra Help

Extra Help is run by the Social Security Administration. Individuals can apply for the LIS program:

  • Online on the Social Security website.
  • By calling Social Security at 1-800-772-1213. TTY users can call 1-800-325-0778. Social Security representatives are available Monday through Friday, from 7AM to 7PM.
  • In-person at your local Social Security office.

After reviewing your application, Social Security will send you a letter to notify you if you’re eligible for Extra Help. If you qualify for the Extra Help program, you can then enroll in a Medicare Prescription Drug Plan or Medicare Advantage Prescription Drug plan (if you don’t already have Part D coverage). If you don’t enroll in a plan, Medicare will choose a plan for you and automatically enroll you in Part D (you can always change plans if you don’t like the plan you’ve been placed in). Because of your eligibility for Extra Help, you can make changes to your Medicare prescription drug coverage at any time, which will take effect at the start of the following month.

If you don’t qualify for Extra Help

If you don’t qualify for the Low-Income Subsidy program, you can appeal the decision by submitting a form to Social Security. You may be asked to explain why you disagree with the decision, and you may need to provide additional information (if any) to support your decision. Social Security will re-review your eligibility and notify you of its decision.

If you’re not eligible for Extra Help, you may also be eligible for another state program that helps with prescription drug costs. To learn more about your options, you can contact your local Medicaid office or your State Health Insurance Assistance Program (SHIP) for more information. Remember, if your income and resource levels change, you can always reapply for the Extra Help program.

You might also consider researching if there’s a lower-cost stand-alone Medicare Prescription Drug Plan or Medicare Advantage plan that includes prescription drug coverage available. Prescription drug costs can vary widely by plan, even when covering the same medications. To find a plan, you can use the plan finder tool on this page to compare plan options in your area; you even have the option to enter your current prescriptions to view Medicare plan options that cover your specific medications. Or, if you’d prefer to get assistance over the phone, just call the number on this page to speak with a licensed insurance agent about your Medicare prescription drug needs.