What is Extra Help for Medicare Part D?
Social Security’s Low-Income Subsidy (LIS) program helps Medicare beneficiaries pay for their Medicare Part DMedicare Part D plans are an option Medicare beneficiaries can use to get prescription drug coverage. Part D plans provide cost-sharing on covered medications in four different phases: deductible, initial coverage, coverage gap, and catastrophic. Each... 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 MedicaidMedicaid is a public health insurance program that provides health care coverage to low-income families and individuals in the United States.... 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 AdvantageMedicare Advantage (MA), also known as Medicare Part C, are health plans from private insurance companies that are available to people eligible for Original Medicare (Medicare Part A and Medicare Part B).....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 premiumsA premium is an amount that an insurance policyholder must pay for coverage. Premiums are typically paid on a monthly basis. In the federal Medicare program, there are four different types of premiums. ..., deductiblesA deductible is an amount a beneficiary must pay for their health care expenses before the health insurance policy begins to pay its share...., and copaymentsA copayment, also known as a copay, is a set dollar amount you are required to pay for a medical service.....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 drugA generic drug is a prescription medication that has the same active ingredient formula as a brand-name drug. Generic drugs usually cost less than brand-name drugs...., 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 beneficiaryA person who has health care insurance through the Medicare or Medicaid programs.... 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 approvalPrior authorization is a process used by health plans to control healthcare costs. Most HMO plans and some PPO plans require authorization before receiving certain treatments, medical services, or prescription drugs.... 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.
Citations
- 1CMS.gov, “Limited Income and Resources“, Accessed September 4, 2021
- 2ASPE.hhs.gov, “2021 Poverty Guidelines”, Accessed September 4, 2021
- 3DHS.state.or.us, “2021 LIS Reference Sheet“, Accessed September 4, 2021
- 4Medicare.gov, “Medicare Savings Programs“, Accessed September 17, 2021