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Extra Help

by David Bynon, last updated

What is Extra Help for Medicare Part D?

Social Security’s Low-Income Subsidy (LIS) program helps Medicare beneficiaries pay for their Medicare Part D prescription drugs by paying some of the costs. Also known as “Extra Help”, beneficiaries who qualify for LIS receive premium and copayment assistance.1CMS.gov, “Limited Income and Resources“, Accessed September 4, 2021

Key Takeaways

  • Medicare Part D assistance is available to people who qualify based on their income.
  • There are four levels of LIS assistance, 100%, 75%, 50%, and 25%.
  • Beneficiaries that qualify for Medicaid will automatically qualify for 100% LIS.
  • Not all Medicare Part D plans offer LIS assistance.

Extra Help is a Social Security Administration (SSA) assistance program that helps low-income individuals with the costs of their prescription medications. Low-Income Subsidies are only applicable to Part D prescription plans and are not applicable to Medicare Part A, Medicare part B, or Medicare Advantage.1CMS.gov, “Limited Income and Resources“, Accessed September 4, 2021

Qualification for Extra Help is based on an individual’s income compared to the Federal Poverty Level (FPL). Based on their income, beneficiaries can receive full coverage or partial assistance for their Medicare prescription drug plan costs.2ASPE.hhs.gov, “2021 Poverty Guidelines”, Accessed September 4, 2021

What are the Income Limits for Extra Help with Medicare?

The yearly income limit for the Extra Help (aka LIS) program is based on the Federal Poverty Level, which changes yearly. For the year 2021, the single-person household limit is $12,880, except in the states of Alaska and Hawaii, which are $16,090 and $14,820 respectively2ASPE.hhs.gov, “2021 Poverty Guidelines”, Accessed September 4, 2021. However, limited income is not necessarily the only qualification beneficiaries will need to meet to receive Extra Help coverage for Medicare Part D.

How Much is the Medicare Low-Income Subsidy?

The amount of Low-Income Subsidy (LIS) available is based on annual income. Qualifying beneficiaries receive assistance to help pay their monthly Medicare Part D premiums, deductibles, and copayments.2ASPE.hhs.gov, “2021 Poverty Guidelines”, Accessed September 4, 2021

There are four categories of subsidy:3dhs.state.or.us, “2021 LIS Reference Sheet“, Accessed September 4, 2021

LIS Category 1 — For people who qualify for both Medicare and Medicaid, people enrolled in a Medicare Savings Program, or people with Medicare whose income is below 135% of the FPL.

  • Benefit: No monthly premium for benchmark plans. No deductible. Copayments are limited to $3.70 for generics and $9.20 for brand-name drugs (2021 benefit).

LIS Category 2 — For people with both Medicare and full Medicaid coverage (Full-Benefit Dual Eligibles), who do not reside in an institution, whose income is below 100% of FPL.

  • Benefit: No monthly premium for benchmark plans. No deductible. Copayments are limited to $1.30 for generics and $4.00 for brand-name drugs (2021 benefit).

LIS Category 3 — For people with both Medicare and full Medicaid coverage (Full Benefit Dual-Eligibles) institutionalized in a nursing facility or other medical facility for 30+ calendar days, and people who receive Home and Community-Based Services in a waivered facility.

  • Benefit: No monthly premium for benchmark plans. No deductible. No copayments on Medicare Part D covered drugs.

LIS Category 4 — For people with Medicare (no Medicaid or MSP) whose income is between 135% of FPL and 150% of FPL and who have limited resources.

  • Benefit: A subsidy covering up to 75% of the monthly benchmark premium. Out of pocket expenses in 2021 are limited to:
    • $92.00 annual deductible and 15% of the prescription costs up to $ 6,550 out of pocket.
    • Copayments are limited to $3.70 for each generic drug, and $9.20 for each name-brand drug after the annual prescription costs exceed $ 6,550 in out-of-pocket spending.

Do I Automatically Qualify for a Medicare Low-Income Subsidy?

If a beneficiary is enrolled in Medicare Part A and/or Medicare Part B and qualifies for Medicaid, they will automatically qualify for LIS. People generally qualify for Medicaid if their income falls below the FPL.3DHS.state.or.us, “2021 LIS Reference Sheet“, Accessed September 4, 2021.

If a beneficiary qualifies for a Medicare Savings Program (MSP), they automatically qualify for Extra Help.4Medicare.gov, “Medicare Savings Programs“, Accessed September 17, 2021

If a beneficiary is above the Federal Poverty Level (FPL) but they are within 50% of that level and have prior approval from the Social Security Administration, they can qualify for partial LIS (75%, 50%, or 25%).

Beneficiaries can apply for partial Extra Help online or with a Medicare professional toll-free at 1-800-MEDICARE (1-800-633-4227) or TTY for the hard of hearing at 1-877-486-2048.

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