Do you need help paying for your prescription medications? If you do, then you may be eligible for a low-income subsidy or Medicare Extra Help. This is a program that assists people who have a limited income and need help with their drug costs. In this blog post, we will discuss what low-income subsidy or Medicare Extra Help is, who is eligible for it, and how to apply.
Medicare Extra Help
- The Medicare Extra Help Program, also called the Part D Low-Income Subsidy, helps Medicare beneficiaries with low income and resources pay for the cost of their prescription drugs and prescription drug coverage.
- To qualify for Extra Help, you must be on Medicare and living in the U.S. with income and financial resources below a certain annual threshold.
- Many people may qualify for Extra Help without realizing it.
- You can apply for the Medicare Extra Help Program through the Social Security Administration online, over the phone, or in person, when restrictions allow.
The Medicare Extra Help Program, also called the Part D Low-Income Subsidy, helps Medicare beneficiaries with low income and resources pay for the cost of their prescription drugs and prescription drug coverage. This benefit is worth an estimated $5,000 per year, according to the Social Security Administration.
Many people may qualify for Extra Help without realizing it. To qualify for Extra Help, you must be on Medicare Part A and/or Part B and living in the U.S. with income and financial resources below a certain annual threshold. Here we explain what the Extra Help Program is, who qualifies and how to apply if you do.
What is the Extra Help Program and How Does it Work?
“The Medicare Extra Help Program is a federal program that’s designed to help those who have limited income and resources pay for Medicare prescription drug program costs, such as premiums, deductibles, and coinsurance payments,” says Robin Saks Frankel, Personal Finance Expert of Forbes Advisor. Under the Medicare Extra Help Program, you also won’t need to pay the Part D late enrollment penalty that is imposed for not enrolling in a prescription drug plan when you’re first eligible.
When you receive Extra Help, your drug plan ensures you never pay more than the Low-Income Subsidy coverage cost limit. In 2023, this is no more than $4 for each generic or $9.85 for each brand-name-covered drug, Saks says.
Income Limits for Extra Help Are
To qualify for the Medicare Extra Help Program, your financial resources and income must be below certain thresholds. In 2023, the income limits for Extra Help with Medicare are:
- $19,320 for individuals
- $26,130 for married couples living together.
If your income is above these thresholds, you may still qualify for some extra help. For instance, if you or your spouse support other family members who live with you, you may qualify even with a higher annual income. Likewise, if you have earnings from work or live in Alaska or Hawaii, you might be able to receive help with income above the 2023 limits.
You Should Also Note
Not all cash payments count toward the annual income limit. The following payments do not count as income when determining the income limits for Extra Help:
- Scholarships and education grants
- Supplemental Nutrition Assistance Program benefits, also known as food stamps
- Housing assistance
- Earning income tax credit payments
- Payments from others to help cover your household expenses
- Home energy assistance
- Disaster assistance
- Medical treatment and drugs
- Victim’s compensation payments
Contact the Social Security Administration to learn about other income exclusions.
To qualify for the Medicare Extra Help Program, you also need to have limited financial resources. Resources include the value of the things you own, such as real estate (excluding your primary residence), bank accounts, investments, Individual Retirement Accounts (IRAs), and cash.
Resources do not include your primary residence, your vehicles, and items you couldn’t easily convert into cash, such as jewelry or furniture. The property needed to support yourself, such as rental property or land you farm, are also not considered resources. Nor are life insurance policies or burial expenses.
According to the latest guidance from the Social Security Administration, to qualify for Medicare’s Extra Help program in 2023 an individual’s resources – including bank accounts, stocks, and other resources that could be quickly converted to cash – must be limited to $15,510 and a couple living together can have no more than $30,950 in resources.
If you have any questions on how this impacts you. Please give us a call. We are always here to help.