Medicare Extra Help is a federal assistance program that helps people with a limited income pay for the costs of Medicare prescription drugs.
Medicare Extra Help is not a Medicare policy. Instead, the Social Security Administration (SSA) oversees the program as a form of government assistance.
Sometimes, providers refer to this as the Part D Low-Income Subsidy.
This article explains how people may benefit from Medicare Extra Help, which people qualify for it, and what the advantages are.
Glossary of Medicare terms
We may use a few terms in this piece that can be helpful to understand when selecting the best insurance plan:
- Deductible: This is an annual amount that a person must spend out of pocket within a certain time period before an insurer starts to fund their treatments.
- Coinsurance: This is a percentage of a treatment cost that a person will need to self-fund. For Medicare Part B, this comes to 20%.
- Copayment: This is a fixed dollar amount that an insured person pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Medicare Extra Help covers some costs of a Medicare Part D plan, including:
- prescription copayments
- annual deductibles
- monthly Part D premiums
Part D is an optional part of Medicare that offers prescription drug coverage. People who are eligible to receive Medicare Part A and Part B can also purchase Medicare Part D.
Private insurance companies have a contract with the federal government that allows them to offer Medicare Part D plans. With Medicare Part D, an enrollee uses the insurer’s network of pharmacies to buy prescription drugs.
However, individuals with Medicare Part D usually still have out-of-pocket expenses. The exact cost of Part D depends on the plan a person chooses and the medications they take.
Read more on Medicare Part D.
Some people automatically qualify for Medicare Extra Help and do not have to apply. These include:
- individuals who receive both Medicare and Medicaid
- people who have a Medicare Savings Program, which provides help with Part B premiums
- individuals who receive Supplemental Security Income (SSI)
Typically, people who meet the above eligibility requirements receive a letter to let them know they do not have to apply for Extra Help. This letter will provide information about Extra Help, such as how much the person will have to pay and details about their new drug plan (if applicable).
People who do not meet the above requirements may still qualify for Medicare Extra Help based on their income. To qualify for the Extra Help program, a person must:
- have Medicare Part A and Part B
- be a U.S. citizen or legal resident
- meet the income criteria
To apply for Medicare Extra Help, a person can submit an application through the SSA online or in person at a local Social Security office. Once the SSA reviews a person’s eligibility, it notifies applicants by mail if they qualify for Extra Help.
People who do not automatically qualify for Medicare Extra help may still meet the requirements for the program, depending on their income.
The income criteria for Medicare Extra Help may change yearly. The program may provide full or partial help based on a person’s monthly income and resources.
The income and resources criteria for 2024 include the following:
- annual income below $22,590 for an individual
- annual income below $30,660 for a married couple
- resources below $17,220 for an individual
- resources below $34,360 for a married couple
The SSA includes only certain resources when it considers a person for Extra Help, as follows:
| Resources included | Resources excluded |
|---|---|
| real estate other than the primary residence | primary residence |
| bank accounts, including: •checking •savings •certificates of deposit | personal possessions |
| stocks | vehicles |
| bonds, including U.S. Savings Bonds | resources not easily turned into cash, such as home furnishings and jewelry |
| mutual funds | property needed for self-support, such as rental property or property used for food production for home consumption |
| individual retirement accounts | life insurance policies |
| cash at home or elsewhere | non-business property that is essential to self-support |
| burial expenses | |
| interest earned on money set aside for burial expenses |
An additional qualification is enrollment in a Medicare Part D plan. Individuals who are unsure whether they meet the criteria may still apply.
Having Medicare Extra Help can provide a person with various benefits and advantages.
It helps pay for Medicare Part D premiums
People purchase Medicare Part D through a private insurer and premiums can vary in cost. Medicare Extra Help pays that premium up to a specific amount.
However, this amount varies by state and depends on whether a person has access to full or partial Extra Help.
It helps lower the cost of prescription drugs
Medicare Extra Help assists with copayments and deductibles. This helps bring down the out-of-pocket costs for individuals who qualify.
In 2024 people who qualify for Extra Help pay:
- $0 for their drug plan deductible
- $0 for their Medicare drug plan premiums
- $4.50 for each generic prescription
- $11.20 for each brand-name prescription
Once a person’s total drug costs reach $8,000, they will pay $0 for each covered prescription.
It provides a Special Enrollment Period (SEP) for Medicare Part D
Usually, changes to a Medicare Part D plan are only allowed during the fall open enrollment period, which is mid-October through early December.
However, people with Extra Help can enroll in Medicare Part D or switch plans during SEPs. These periods are:
- January to March
- April to June
- July to September
Learn more about Medicare SEPs.
It waives Medicare Part D late enrollment fee
If individuals did not join a plan that included prescription drug coverage (Part D) and did not have any drug coverage for more than 63 days after they joined Part A and Part B, they can incur a late enrollment penalty.
However, those who qualify for Extra Help are waived from this penalty. Also, if they were already paying a penalty when they qualified for Extra Help, the penalty goes away upon qualification.
Read more about Medicare late enrollment penalties.
People who have Medicare Extra Help find that the amount by which it reduces prescription drug costs may vary.
The SSA estimates that Medicare Extra Help reduces prescription drug costs by about $5,900 per year for each recipient.
Medicare Extra Help reduces drug costs in several ways.
It lowers the monthly premium for Medicare Part D. People who receive full Extra Help pay a $0 premium and do not have to meet a deductible.
In 2024, people have a $4.50 copayment for generic drugs and an $11.20 copayment for brand-name drugs. After they reach $8,000, they no longer need to pay a copayment when buying medications.
Medicare Part D includes prescription medication copayments. As these may vary, the Part D copayment may be lower than the Medicare Extra Help copayment. Individuals with Extra Help pay whichever copay is lower.
Qualifying for Medicare Extra Help in one year does not automatically qualify a person for the next year.
Circumstances change, and a person will need to show that they meet the Extra Help criteria for each enrollment year.
The process to requalify may vary depending on how a person initially met the criteria. For example, a person may have to apply for continued eligibility by providing documentation that confirms their income.
Medicare resources
For more resources to help guide you through the complex world of medical insurance, visit our Medicare hub.
Medicare Extra Help is a social security program that provides extra funding for people who have Medicare Part D.
It can help cover the costs of their monthly premium, deductible, and any medication copayments. The SSA approves people for the Extra Help program based on income and assets.
People will need to requalify for Extra Help every year.