Part D Low Income Subsidy (Extra Help)

The cost of prescription drugs has really gotten out of hand and many seniors are struggling to afford the cost of their prescriptions. Without a doubt, the most effective way to lower your drug costs is by qualifying for the Medicare Part D Low Income Subsidy program.

Also known as “Extra Help” and “LIS”, this government program pays for some (potentially all) of the Part D premium and puts a cap on the cost of drug co-pays. Read on to see if you qualify and how to apply.

What is Medicare Extra Help

The Low Income Subsidy is a federal prescription drug assistance program for qualifying Medicare beneficiaries. For those who are eligible, it has 4 benefits:

Premium Assistance – LIS can pay your Part D premium up to a state-specific benchmark amount (~$35-45/month). This applies whether you have a stand-alone drug plan or get drug coverage through a Medicare Advantage plan.
Co-Pays Limits – LIS caps the amount you have to pay for your drug co-pays based on your Extra Help level and on the “Tier” of the medication.
Special Election Period – While the standard Medicare recipient can only change drug plans once a year during the Annual Election Period, those who qualify for Extra Help can make a change once per quarter during the first 3 quarters of the year.
Elimination of the Part D Penalty – If you had a Part D penalty for going without creditable drug coverage, Extra Help will eliminate it. 4

Medicare Extra Help Benefits

Extra Help benefits differ based on what level you qualify for. These are the amounts for 2024.

Full Extra Help
- Drug Plan Premium = $0 per month
- Drug Plan Deductible = $0 per year
- Co-Pays
  - Generics = Up to $4.50 each
  - Brand Name = Up to $11.20 each

Partial Extra Help
- Drug Plan Premium = Varies based on your income
  - Either 25%, 50%, or 75% on the plans premium, based on your Extra Help level.
- Drug Plan Deductible = No more than $104
- Co-Pays = No more than 15% of the cost for each covered drug.

Another benefit of Medicare Extra Help is that it eliminates the Medicare Coverage Gap (also known as the Donut Hole).

Who is Eligible for the Low Income Subsidy

Not everyone is eligible for prescription drug assistance through the extra help program. There are income and resource limits in order to qualify.

Income Limit [Updated 2024]
- Single – $22,836
- Married – $30,900
Resource Limit [Updated 2024]
- Single – $17,220
- Married – $34,360

Medicare counts the following as “Resources” for determining eligibility
Money in your checking, savings, retirement account, and brokerage account.

Medicare does not count your house, car, pre-paid funeral, and personal belongings towards your resource limit.

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How to Apply for Medicare Extra Help

If you meet the following criteria you will be automatically enrolled in the Extra Help program:

Receiving full Medicaid coverage
Qualify for a Medicare Savings Program (the state helps pay your Part B premium).
Receive Supplemental Security Income (SSI) benefits from Social Security

If you don’t meet the above criteria, you can either call Social Security to apply at 1-800-772-1213 or you can follow the steps below to apply online.

Apply for Extra Help Online

In order to apply for Medicare Extra Help, go to the application page on Social Security’s website: https://secure.ssa.gov/i1020/start

Scroll to the bottom and select “Apply Now” to begin your application.

Enter your personal and financial information on the next several pages to give Medicare the information they need to make their decision.

If you are accepted, you will receive a letter in the mail letting you know what level of Extra Help you qualified and what your premiums / co-pays will be going forward.

Renewing Your Extra Help Qualification

Once you have Extra Help, you don’t need to take any action in order to renew it each year. You will however get a letter in the mail if you no longer qualify or if your level of Extra Help changes.

FAQ

Is Medicare Extra Help Free?

Yes! Not only is Medicare Extra Help (LIS) free, it will save you a lot of money if you qualify for it.

Summary

Overall, the Medicare Extra Help program is hugely beneficial for seniors and many don’t even know that they qualify. If you need help applying for have questions about whether you may qualify for Extra Help, schedule an appointment with us or give us a call. We’re happy to help.

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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