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Big changes are coming to Medicare Part D prescription drug coverage following the passage of the Inflation Reduction Act of 2022, which gives Medicare the power to negotiate for lower prescription drug prices. The act also includes caps on out-of-pocket spending, limits on increases in Medicare Part D premiums and drug prices, and more.
Certain changes took effect at the start of 2023, while others start as late as 2026.
Extra Help is a federal program that helps Medicare beneficiaries with low income and limited resources pay for prescription drugs with Medicare Part D.
“These programs are really important and can save people thousands of dollars per year,” says Erin Guay, paralegal and compliance officer at the Pennsylvania Health Law Project. If you qualify, the government estimates that Extra Help is worth about $5,300 per year.
If you’re having trouble affording your prescription drugs, the Medicare Extra Help program — also known as the Part D Low-Income Subsidy — might be able to help. (You must enroll in either a Medicare Part D plan or Medicare Advantage plan with prescription drug coverage to use Extra Help.)
Here’s what you need to know about the benefits, requirements and application process for Extra Help.
What are the benefits of Extra Help?
Part D premium subsidies up to 100% of the cost of benchmark Part D premiums in your area. (You will need to pay the difference if you choose a more expensive Part D plan.)
Reduced or eliminated Part D deductibles.
Caps on prescription drug copays as low as $1.45 for generics and $4.30 for brand-name medications.
In some cases, if you don’t qualify for the full benefits, you can still receive partial benefits on a sliding scale according to your income and resources.
Who qualifies for Extra Help?
You can qualify for Extra Help if you are entitled to Medicare Part A and/or Part B, live in any of the 50 states or Washington, D.C., are not incarcerated and have both limited resources and limited income.
Receiving assistance from the government programs listed below can also qualify you to automatically receive Extra Help.
Who automatically receives Extra Help?
You are automatically eligible for Extra Help if you have Medicare Part A or Part B and at least one of the following applies:
You are entitled to Supplemental Security Income, or SSI.
You are eligible for full Medicaid coverage.
You are enrolled in a Medicare Savings Program as a Qualified Medicare Beneficiary, Specified Low-Income Medicare Beneficiary or Qualified Individual.
If you automatically qualify, you don’t need to apply to receive the benefits.
If you don’t automatically qualify, you should still apply for Extra Help if you might meet the income and resource criteria.
What are the resource and income limits for Extra Help?
“Resources” include your bank accounts, cash at home, investments like stocks and bonds, and real estate other than your primary residence.
For 2023, the Extra Help resource limits are:
Limit for partial subsidies
Limit for full subsidies
Extra Help’s resource limits aren't as restrictive as other government programs, Guay says. For example, your home, personal possessions, vehicles, insurance policies, back payments from Social Security or SSI, and burial plots or contracts don’t count toward the resource limits.
In addition, if you will use some resources to pay for a funeral or burial, the limits are raised by $1,500 for an individual or $3,000 for a married couple.
Income limits for Extra Help are based on the Federal Poverty Level, or FPL. The 2023 income limits for those in the contiguous states and the District of Columbia (the numbers are different for those in Alaska and Hawaii) are:
Limit for partial subsidies
Limit for full subsidies
Percentage of the FPL
$2,276 per month, or $27,315 per year.
$2,049 per month, or $24,584 per year.
$3,080 per month, or $36,960 per year.
$2,772 per month, or $33,264 per year.
The latest income thresholds for all states and household sizes can be found on the Department of Health and Human Services’ HHS Poverty Guidelines for 2023.
As with resources, there are many exceptions to what counts as income. For example, food, housing and home energy assistance from the government, scholarships, grants and even payments you get from others to help with your household expenses don’t count toward Extra Help’s income limits.
How do I apply for Extra Help?
You apply for Extra Help through the Social Security Administration:
Online: Visit ssa.gov/extrahelp.
Phone: Call 800-772-1213 (TTY 800-325-0778).
Usually, you can also apply in person at a Social Security office, but offices are closed to walk-ins during the COVID-19 pandemic. You might be able to arrange a special appointment for in-person help if you call first.
You will need to provide information about your household, work, resources and monthly income as part of the application.
“The application process is actually a lot easier than other benefit programs because you have to fill out an application, but you typically don't have to provide documentation of income and resources the way you often do for Medicaid or the Medicare Savings Programs," Guay says. "Social Security can usually verify the information you’re submitting.”
You don't need to be already enrolled in a Part D plan to file for Extra Help. If you qualify, you will receive a letter from the Social Security Administration, and the Extra Help benefits will apply when you're enrolled in a Part D prescription drug plan or Medicare Advantage plan with prescription drug coverage.
If you automatically qualify for Extra Help, Medicare will enroll you into a Part D plan. Otherwise, you'll need to enroll in a Part D plan or Medicare Advantage plan with Part D coverage yourself.
What if I don’t qualify?
Even if you think you might not qualify, Guay encourages applying to be sure.
“Submit an application and get an actual official decision that would explain how they counted your income,” Guay says. “Then if you’re denied, you can look at the reason you were denied to decide if you want to appeal that decision. Or you might get a notice saying you’re eligible.”
There are other programs that might help as well, especially at the state level. “In Pennsylvania, we have a prescription program for seniors,” Guay says. “If people don’t qualify for Extra Help, they may be eligible for some of these other prescription programs that could limit their Medicare costs.”