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Low-Income Subsidy for Medicare – A Guide to Getting the Help You Need

Finding affordable care is difficult, no matter your income. But it can be incredibly challenging if you are older with a low income. You can get a low-income subsidy for Medicare to help with your medical costs if you qualify.

The details of how these programs work vary widely from state to state. Read on to learn the various types of Extra Help available and low-income subsidies available in multiple states.

What is Medicare Extra Help?

Extra Help, also known as the Part D Low-Income Subsidy (LIS), is a federal program run by the Social Security Administration that assists in covering some to most of the out-of-pocket expenses associated with a Medicare prescription drug plan. This includes monthly premiums, annual deductibles, and prescription co-payments. The projected yearly value of Extra Help is around $5,100. Unbeknownst to them, many consumers are eligible for these significant assistance dollars. 

Social Security will need to know the value of your assets, investments, real estate (other than your house), and income to determine your eligibility. Medicare beneficiaries who fall within certain income and asset thresholds can qualify for Extra Help, which comes in various levels. Depending on your income and assets, you may be eligible for either full or partial benefits. 

Who is eligible for Extra Help? 

If you’re currently enrolled in Medicaid, Supplemental Security Income (SSI) or a Medicare Savings Program (MSP), then congratulations—you’ve automatically qualified for Extra Help! No applications are needed. You should receive a purple-colored notification from the Centers of Medicare & Medicaid Services (CMS) letting you know that you do not need to apply for Extra Help.

Otherwise, there are certain requirements that will indicate whether or not you qualify or Extra Help. First, you must also be registered in Part A and Part B of Medicare and a resident of the United States or one of its territories.

Then, you must meet the income and asset (or resources) requirements as outlined in the chart below. The income requirements shown below are for 2022. Income limits for 2023 will be released in early 2023.

Resources include savings accounts, stocks and bonds, real estate (other than your primary residence), and other investments. Generally speaking, your 2023 resources must be below $9,090 if you are single or $13,630 if you are married for a full low-income subsidy. For a partial subsidy, the income limits are $15,160/30,240, respectively, for single/married couples.

You may be suitable for the Extra Help program if you meet these requirements. This program helps lower-income Medicare applicants with their costs, such as premiums and deductibles. The program also helps cover some of the costs associated with prescription drugs.

If you only have Medicare

Monthly Income LimitAsset LimitProgramCopayments up to $7,050 in out-of-pocket drug costsCopayments after $7,050 in out-of-pocket drug costs
Up to $1719 (single) or ($2,309) Up to $15,510 (single) or $30,950 (couples) Partial Extra Help15% coinsurance or the plan copay, whichever is less $3.95/generic / $9.85/brand-name; OR 5% of the drug cost, whichever is greater 
Up to $1,549 (single) or $2,080 (couples) Up to $9,900 (single) $15,600 (couples)Full Extra Help$3.95 generic copay $9.85 brand-name copay No copay

If you are enrolled in another program

Enrolled inMonthly Income LimitProgramCopayments up to $7,050 in out-of-pocket drug costsCopayments after $7,050 in out-of-pocket drug costs
Medicaid and/or a Medicare Savings ProgramAbove $1,153 (single) or $1,546 ( couples)Full Extra Help$3.95 generic copay $9.85 brand-name copay No copay
MedicaidUp to $1,153 (single) or $1,546 (couples) Full Extra Help $1.35 generic copay $4.00 brand-name copay No copay

How to Apply For Extra Help

If you are not deemed eligible (see above), you must apply through the Social Security Administration (SSA). You can: 

  • Apply online
  • Apply over the phone 
  • Fill out a paper application or book an appointment to apply at your local SSA office.

A note: You do not need to be enrolled in a Medicare Prescription Drug Plan to file for Extra Help. However, your Extra Help assistance will not start until you’re enrolled with an approved Medicare drug provider.

Once the SSA has reviewed your application, they will determine that you are eligible to receive: 

  • Full premium subsidy of the premium (based on your area’s benchmark) with no deductible and limited copayments;
  • Partial premium subsidy of 75%, 50%, or 25% of the premium (based on your area’s benchmark) with reduced deductibles and copayments; or
  • Not eligible for Extra Help.

The below chart outlines the premiums and copayments for each determination

ProgramPremiumDeductibleCopayments up to $7,050 in out-of-pocket drug costsCopayments after $7,050 in out-of-pocket drug costs
Partial Extra HelpPremium depends on your income (subsidy of 25%, 50% or 75%) $99 deductible or the plan’s standard deductible, whichever is less 15% coinsurance or the plan copay, whichever is less $3.95/generic / $9.85/brand-name; OR 5% of the drug cost, whichever is higher
Full Extra Help$0No deductible$3.95 generic copay $9.85 brand-name copay No copay

Full Extra Help covers all Medicare Part D costs associated with prescription drugs. Partial Extra Help covers some, but not all, of the expenses. Those who qualify for Partial Extra Help may receive subsidies or other financial assistance to cover part of their prescription drug costs. 

It’s important to note that the LIS only helps with the cost of your prescription drugs. The Low-Income Subsidy program is not designed to pay for your Medicare Parts A & B premiums or their out-of-pocket expenses. 

Extra Help Benefits

For low-income Medicare applicants, the Extra Help program provides an invaluable service. One of the primary benefits of the Extra Help program is that it will lower the costs you must pay for your Part D prescription drug plan. Part D plans require enrollees to pay a monthly premium, plus co-payments and medication deductibles. Under the Extra Help program, these costs can be reduced or even eliminated. The program may also cover the enrollee’s Medicare Part B premiums. 

Finally, the Extra Help program provides financial security and peace of mind to those who qualify. It can assure you that you will be able to afford your medications and other medical expenses, despite your limited income. 

For low-income Medicare applicants, the Extra Help program is a valuable resource that can help make medical expenses more affordable.

How Will The Medicare Family Help With the Low-Income Subsidy for Medicare Process?

If you are a low-income Medicare applicant in need of financial assistance, The Medicare Family can help. We can assist you with finding the best plan for your needs and help you through the application process to ensure you get the extra help you need. We will assist you in understanding the Extra Help program and guide you in applying for a low-income subsidy for Medicare. So don’t wait any longer – contact us today to get started on getting the financial assistance you need.

Sylvia Gordon, aka Medicare Mama®, is an expert on all things Medicare and Social Security. She is the 2nd Generation here at The Medicare Family and has served on the advisory boards of major insurance companies like UnitedHealthcare®, Cigna, and Anthem. In her free time, she can be found taking care of her animals (dogs, goats, peacocks, chickens), and reading a good book. Learn More.
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