Extra Help is a financial support program for those with Medicare. It helps people with limited resources manage the cost of prescribed drugs. An income limit is set which determines eligibility.
Extra Help is also known as a low income subsidy (LIS). This means that the amount of help a person receives from the government may vary as it depends on income and financial need.
Medicare Extra Help could save an individual a substantial amount of money each year by helping them to pay for premiums, deductibles, and copayments.
Even though the Extra Help program is beneficial, many individuals who qualify have not yet enrolled.
This article looks at the Medicare Extra Help program, the income limits, benefits, and how a person can apply to the LIS program to help with the cost of their prescriptions.
Original Medicare covers the costs of medication during a stay in the hospital, but there is limited coverage for take-home prescription drugs.
Medicare Part D is a plan that covers prescription drugs. The plan is also known as a prescription drug plan (PDP).
When a person has a PDP, they must usually pay monthly premiums, copayments, and deductibles.
Private insurance companies administer PDPs, and because of this, different benefits and coverage options may apply. Costs will also vary.
Each plan has a formulary that specifies which drugs the plan covers.
An individual should ensure that the plan they wish to enroll in covers the prescription drugs they need.
Medicare Extra Help is available to those with limited income and resources who have a PDP.
The plan helps pay premiums, deductibles, and coinsurance associated with prescribed medication.
The Social Services Administration (SSA) estimates that the Medicare Extra Help program could help an individual save around $5,000 annually.
According to the SSA, to qualify for Extra Help, a single person’s income must be less than $19,140, and they must have less than $14,610 in resources.
The SSA also advises that a married couple’s income must be less than a combined $25,860, and they must have resources of $29,160 or less.
Medicare Extra Help can only pay costs associated with prescription drug coverage. It cannot help to pay towards Medicare Part A or Part B costs.
An individual who is eligible for Medicaid has a Medicare savings program (MSP) that helps them to pay their Part B premiums.
A person with an MSP or Supplemental Security Income (SSI) benefit will automatically qualify for Extra Help.
The government restricts the Medicare Extra Help program to those with a low income. To qualify for assistance in 2020, a person must:
- enroll in Medicare parts A and B
- receive a single annual income of less than $19,140, or $25,860 for a married couple
- have resources of less than $14,610, or $29,160 as a married couple
How are income limits set?
The government uses the federal poverty level (FPL) to set its income limits. The level is set for each state every year, depending on the cost of living and average income.
The income limit for Medicare Extra Help changes in line with the federal poverty level.
If a person has a higher income, they may still qualify depending on circumstance. Examples include those who live in Alaska or Hawaii or those who support a dependent family member.
People may qualify for either full or partial Extra Help, depending on their income and assets.
What is not counted toward income limit?
Medicare does not count certain kinds of payment or assistance towards the income limit for Medicare Extra Help.
Typically, payments from the federal or local governments do not count. For example:
- Supplemental Nutrition Assistance Program (SNAP) or food stamps
- housing assistance
- home energy assistance
- earned income tax credit payments
- disaster assistance
- victim compensation payments
- scholarships and education grants
Medicare also does not count any money that someone else provides to help towards an individual’s household expenses.
The Medicare Extra Help program offers people several benefits, including:
- Payment of premiums. Payment of Medicare Part D premiums will be taken care of by Extra Help, up to a set amount. The amount varies state-by-state.
- Payment toward drugs. Prescription drug costs are reduced, providing a person’s prescription is on their PDP formulary, and they use pharmacies within the plan’s network.
- Help with enrollment. A Special Enrollment Period (SEP) applies that allows additional time to enroll in a PDP.
- Removal of penalties. Late enrollment penalties can apply to PDPs if someone delays enrollment. These penalties will not apply.
Medicare Extra Help does not replace Medicare Part D and cannot exist on its own.
A person must still have original Medicare and a PDP to receive Medicare Extra Help benefits.
Depending on a person’s circumstance, their Extra Help may remain the same, increase, decrease, or end.
If an individual no longer qualifies for Medicare Extra Help, their coverage will continue until the end of the year.
The Department of Social Security regularly reviews eligibility for Extra Help. A request asking for further information may arrive, and a person will need to complete and return the request within 30 days.
If someone does not return the form or if they return the form late, their Extra Help coverage will end in January of the following year.
If an individual no longer qualifies for Extra Help, they may still receive help to pay for the prescription drug costs.
People should contact their state’s Medicaid office or State Health Insurance Assistance Program (SHIP) for information on the support available.
The government provides four different Medicare savings programs that can help to pay for Medicare Part A and Part B premiums.
The rules regarding eligibility for these programs vary by state, so people should contact the Social Security Administration at 800-772-1213 to find out if they can apply.
The programs can help someone pay for their Medicare expenses in the following ways:
- Qualified Medicare Beneficiary (QMB) programs help pay for Part A premiums, Part B premiums, deductibles, coinsurance, and copayments.
- Specified Low-Income Medicare Beneficiary (SLMB) programs help pay Part B premiums for those who have Part A and a limited income.
- Qualifying Individual (QI) programs help pay Part B premiums for those who have Part A and a limited income. A person must apply every year and cannot apply if they qualify for Medicaid.
- Qualified Disabled and Working Individuals (QDWI) programs help toward the Part A premium for qualifying individuals, such as working disabled people aged 65 and under who lost their premium-free Part A when they returned to work.
The Medicare Extra Help program provides help toward prescription drug costs for people who have a low income.
To qualify, someone must have an income of less than $19,140 with less than $14,610 in resources. The income level increases for a married couple to a combined $25,860, with resources of $29,160 or less.
Once Medicare approves the application, people can enroll in a Part D plan immediately without having to wait for an enrollment period and without receiving a late enrollment penalty.