Extra Help With Medicare Drug Costs: Who Qualifies and How to Apply

For many people with Medicare, prescription drugs are the most unpredictable part of the monthly budget.

What many do not know is that there is a federal program designed to lower those costs for people with limited income and resources.

It is called Extra Help, and it can reduce or eliminate drug plan premiums and lower the copays you pay at the pharmacy.

Every year, some people who would qualify never apply,

often because they assume they earn too much or that the process is complicated. This guide explains what Extra Help is,

who may qualify and how to apply without paying anyone.

What Extra Help is

Extra Help, also called the Low-Income Subsidy, is a Medicare program that helps pay for Part D prescription drug coverage.

Depending on your situation, it can help with your drug plan's monthly premium, the yearly deductible and the copays or coinsurance for covered drugs.

The program works with Medicare drug plans and with Medicare Advantage plans that include drug coverage.

It does not replace your plan; it lowers what you pay within it.

Who may qualify

Eligibility depends on your income and your resources, such as money in bank accounts, stocks and bonds.

Your home, one car and certain other items generally do not count as resources.

The exact limits are updated every year and differ for individuals and married couples living together.

Because the limits change, the best approach is not to guess.

If your income and savings are modest, check the current limits on the official sites or simply apply and let the program decide.

People who qualify automatically

Some people get Extra Help automatically, without applying. This usually includes people who have both Medicare and full Medicaid coverage,

people who get help from their state paying Medicare premiums through a Medicare Savings Program,

and people who receive Supplemental Security Income. If you qualify automatically, you are typically notified by mail.

How to apply

If you do not qualify automatically, you can apply through Social Security.

You can apply online, by phone or in person at a local office. Applying is free.

The application asks about your income, your resources and your household, and you may need information from bank statements and other financial documents.

1. Gather your information: recent bank statements, information about investments, and income from pensions, Social Security or work.
2. Apply online, by phone or in person through Social Security.
3. Wait for the decision letter, which explains whether you qualify and at what level.
4. Make sure you are in a drug plan. If you qualify and are not in one, you may be enrolled in a plan or can choose one yourself.

What changes when you qualify

With Extra Help, you typically pay a much lower premium for your drug plan,

or none at all for certain plans, and lower copays for generic and brand-name drugs.

People with Extra Help also have more flexibility to change drug plans during the year than other people with Medicare.

Your plan and your pharmacy should apply the help automatically once your status is confirmed. If the pharmacy still charges you the full copay,

ask the plan to update your records and keep your Extra Help letter handy as proof.

Why people who qualify don't apply

The most common reason is assuming the answer is no.

Some people think owning a home disqualifies them; usually it does not.

Others think a modest pension or savings for emergencies puts them over the limit without checking.

Some find the forms intimidating or are embarrassed to ask for help.

And many have simply never heard of the program.

The application asks for information you already know, and help filling it out is free.

If your budget for medicines is tight, it is worth the time to apply and let the program decide, rather than ruling yourself out.

An example of the difference it can make

Picture someone with a fixed income who takes several daily medicines and has been skipping refills near the end of the month to save money.

After applying and qualifying, their drug plan premium drops and their copays at the pharmacy become small and predictable.

They stop rationing pills and can plan the month with confidence.

That stability, more than any single number, is what the program is for.

Other programs that can help

• Medicare Savings Programs: state programs that can help pay Medicare premiums, and in some cases deductibles and coinsurance. Qualifying for one can also make you eligible for Extra Help.
• Medicaid: for people with very limited income and resources, Medicaid can cover many costs that Medicare does not.
• State pharmaceutical assistance programs: some states have their own programs to help with drug costs.
• Manufacturer assistance programs: some drug companies offer help for specific medicines.

Free help with the application

Your State Health Insurance Assistance Program offers free,

unbiased counseling and can help you understand whether you might qualify for Extra Help, Medicare Savings Programs or Medicaid,

and how to apply. Counselors do not sell insurance and are trained in these programs.

Watch out for fake offers

Extra Help is free to apply for. No legitimate program will charge you a fee to apply,

ask you to pay with a gift card or pressure you to share your Medicare Number over the phone.

If someone contacts you offering to "unlock" drug savings for a fee, hang up and apply through official channels only.

Frequently Asked Questions

Can I apply if I already have a drug plan?

Yes. Extra Help works with the plan you already have, or can help you choose one.

Do I have to apply again every year?

Not always. Your eligibility can be reviewed, and you may receive a notice if your status changes.

Read every letter from Social Security and Medicare about Extra Help.

What if my situation changes during the year?

Report changes in income, resources or household as instructed in your letters, and ask whether a new review applies.

This guide is general information and is not affiliated with Medicare or Social Security.

Check current limits with the official sources below.

Sources and Further Reading

• Medicare.gov — Help with drug costs: Extra Help and other ways to lower prescription costs.
• Medicare.gov — Drug coverage (Part D): how Medicare drug plans work.
• SHIP — State Health Insurance Assistance Programs: free help applying for programs that lower Medicare costs.