By Dana Barrett
What is the Extra Help Medicare Program?
Some low-income folks on Medicare qualify for the Limited Income Subsidy (LIS) more commonly referred to as the “Extra Help Plan”. This subsidy helps to pay prescription drug expenses not covered directly by Medicare Part D. The subsidy level is determined by the recipient’s income when compared to the Federal Poverty Level including resource limits defined by the Social Security Act.
What are the Benefits of the Extra Help Medicare Plan?
If you qualify for this low-income subsidy you’ll have financial assistance to help with fees such as the Medicare Part D monthly premium, as well as any copayments or coinsurance. The subsidy also helps to offset your plan’s annual deductible and eliminates the late penalty if you missed the initial enrollment period for applying for Medicare Part D.
If you are eligible to use Extra Help, make sure that all your current prescriptions are included on your Part D plan’s list of covered medications and brands. It’s important to note that you are also required to use pharmacies in your plan’s network. If you have a change in health conditions resulting in the need for new medication that isn’t covered by your current Part D plan, you’ll be eligible for a “Special Election Period” to make those changes.
As a quick review, it’s worth highlighting that most people who qualify for Extra Help receive the following benefits:
- No premiums,
- No deductibles (unless receiving the partial subsidy), and
- No more than $9.20 in 2021 for each drug their plan covers.
Who Qualifies for the Extra Help Medicare Prescription Drug Plan?
Medicare participants who are also enrolled in Medicaid (dual eligibility) automatically qualify for the Extra Help Plan. As do individuals who qualify for a Medicare Savings Program, and also Medicare recipients who are receiving Supplemental Security Income. If you fall into any of these categories, you should receive a notice from the Centers for Medicare & Medicaid Services (CMS) to let you know that you aren’t required to apply for the plan.
If you are enrolled in Medicare or a Medicare Advantage Plan but don’t meet any of these qualifications, then you’re required to apply to Social Security for the Extra Help Plan. Remember that the Extra Help Plan (LIS) is not a substitute for Medicare Part D. You must be enrolled in Part D to qualify for the low-income subsidy.
How is the Eligibility for the Limited-Income Subsidy Determined?
The Centers for Medicare and Medicaid Services release guidelines that outline the income and asset thresholds for qualifying for either full or partial LIS help. Assets that count toward your resources include any real estate in your name that isn’t your primary residence and also funds held in banks or investment accounts. Account assets that affect eligibility include:
- Checking accounts
- Savings accounts
- Mutual funds
- Stocks and bonds
It’s important to note that your home, car, and any insurance policies you own are not included in the calculation for eligibility. Income and asset limits to determine if you qualify are updated every year, so you may be eligible one year but not the next. For 2021 the requirements are listed below:
- Single Person – resource limits no greater than $7,970
- Married couple – resource limits no greater than $11,960
- Single Person – resource limits no greater than $13,290
- Married couple – resource limits no greater than $26,520
Are Burial Assets Included in Eligibility Calculations?
As outlined by the CMS, if any resource assets include burial costs then the resource limits increase slightly. This includes costs associated with the purchase or maintenance of a burial plot for either an individual or spouse or even a family plot. Any prepaid fees to a funeral home for burial services also qualify. The recipient is required to notify Social Security of these expenses to have their resource qualification adjusted.
Full Subsidy (with burial expense notification)
- Single Person – resource limits no greater than $9,470
- Married couple – resource limits no greater than $14,960
Partial Subsidy (with burial expense notification)
- Single Person – resource limits no greater than $14,790
- Married couple – resource limits no greater than $29,520
You may also qualify if your income is above these limits, but you are financially responsible for other members of your family living in the same house.
If you are currently enrolled in the (LIS) Extra Help Plan and you are concerned about potential changes to your coverage due to a mailing that you received from CMS or Social Security, you can find more information here regarding notices about changes to copayment levels, or if Medicare is switching you to a different plan. There is also help for automatic enrollees whose eligibility has ended, and those recipients who chose their own Medicare Part D plan.
Is the Annual Election Period the Same for LIS and Medicare?
When you qualify for the Extra Help Plan, you’ll have access to a Special Enrollment Period (SEP) once per calendar quarter from January 1st until September 31st to either change to another prescription Part D plan or newly enroll for coverage. You are not allowed to use the Extra Help Special Enrollment Period from October through December because you can use the regular Fall Open Enrollment period if you need to make changes to your prescription drug plan.
Medicare recipients may be eligible for the Extra Help Plan often referred to as the Part D Low-Income Subsidy, which is provided jointly by the CMS and the Social Security Administration. This plan was designed to protect low-income and fixed-income seniors from the somewhat costly and unpredictable out-of-pocket expenses for their essential prescription drugs.
If you are already a Medicare or Medicare Advantage recipient, it’s easy to apply for the plan to find out if you qualify for low-income assistance. You can apply online at www.socialsecurity.gov/extrahelp, or call the Social Security Administration at 800-772-1213.