xtra Help (also known as the Low-Income Subsidy or LIS) assists eligible beneficiaries with paying for costs associated with their Medicare Part D prescription drug plan, including annual deductibles, monthly premiums and prescription co-payments or coinsurance.
As big as the Extra Help program has become, the Centers for Medicare & Medicaid Services (CMS) estimates that as many as 2 million more Medicare enrollees could qualify for this help but either don’t know about it, think it doesn’t apply to them, or simply haven’t bothered to ask. You shouldn’t rule it out.
The high cost of prescription drugs is an ongoing battle that most Americans face, especially low-income older adults who rely on Social Security benefits as their primary source of income. Drug pricing was supposed to be a top priority for both Republicans and Democrats, however; several policy ideas have been stopped by the courts, abandoned, or delayed until after the 2020 election. Just last December, House Democrats passed a partisan government drug price negotiation bill, but it almost certainly will not become law.
Medicare enrollees with low incomes as defined in reference to the federal poverty level who qualify for maximum Extra Help support usually pay no premium or deductible for their Part D plans. Their total payment for drugs in 2020 can be no more than $3.60 for each generic/$8.95 for each brand-name drug. Payments are higher for people whose incomes are above the federal poverty level but still low enough to qualify for Extra Help.
Extra Help has both income and resource limits. In 2020, your annual income must be limited to $18,735 for an individual ($25,365 for a married couple living together). Your total resources must be no more than $14,390 for an individual ($28,720 for a married couple living together). Resource ceilings are modest but they do not include your home, car, or personal possessions. Medicare enrollees who have Medicaid, live in an institution such as a nursing home, or receive home and community-based services will have no co-pays for their prescription drugs.
Here’s some additional details about the Extra Help program. There are two ways to qualify for Extra Help. Some people get Extra Help automatically because they have both Medicare and Medicaid, receive Supplemental Social Security Income (SSI) benefits or are enrolled in any of the four types of Medicare Savings Programs. All others must apply directly for Extra Help by completing Social Security’s Application for Extra Help with Medicare Prescription Plan Costs. You can also apply online at www.socialsecurity.gov/extrahelp or pick up an application at your local Social Security office. Please note that you can apply for Extra Help at any time during the year.
Once you’ve submitted your application, Social Security should make a determination within 60 days. It’s always best to be enrolled in Medicare Part D prescription drug plan because being deemed eligible for Extra Help does not automatically enroll you in a Medicare prescription drug plan. However, if you are automatically enrolled in Extra Help and you haven’t thus far chosen a plan for yourself, the Centers for Medicare and Medicaid Services (CMS) will randomly assign you into a drug plan.
Extra Help typically lasts until the end of the calendar year even if you were to lose your Medicaid. If you meet your share of cost for Medicaid even once, you get Extra Help for the rest of the year. Should you become eligible for Medicare in July or later, you get Extra Help for the rest of that year AND all of the next year.
Extra Help recipients can change their Part D or Medicare Advantage - Prescription Drug Plan once a quarter without penalty. This gives beneficiaries an opportunity to change plans if they are diagnosed with a chronic condition and now need more expensive medications to treat their condition. Many older adults are fearful applying for Medicaid because estate recovery laws. Please be advised that Federal law does not permit states or the federal government to collect money from an estate for Extra Help costs.
If your income and asset limits are higher than the allowable amounts, you might still qualify for Extra Help. As mentioned earlier, assets (resources) such as your primary home, vehicle, life insurance, personal possessions, burial plots, irrevocable burial contracts or back payments from Social Security or SSI are not counted. The Supplemental Nutrition Assistance Program (formerly Food Stamps), housing assistance, energy assistance or any help you get from others to pay your household expenses aren’t counted as income by Social Security.
You may want to keep the following documents handy when you apply for Extra Help: Social Security Card, bank account statements (checking, savings, and certificates of deposit), Individual Retirement Accounts, stocks, bonds, savings bonds, mutual funds, other investment statements, tax returns, and your most recent Social Security benefits award letter. You actually won’t need to submit these documents unless you are contacted by a Social Security representative. Extra Help income limits are linked to the federal poverty level which changes every year come February or March. You should also be aware that income limits will be higher for each additional relative who lives with you and you are financially responsible.
In the coming weeks, I will be writing an article on Medicare Savings Programs (MSP). These are state programs that pay varying amount of Medicare premiums, copays and deductibles. Like Extra Help, there are resource thresholds, and the definitions are similar to those use in Extra Help. It’s important to know that when you initiate the Extra Help application, you automatically start the application process for MSP as well.
For more information about Medicare Savings Programs, Medicare Part D prescription drug plans, enrollment periods or other Medicare-related concerns, go to www.medicare.gov or call 1-800-MEDICARE (1-800-633-4227) TTY 1-877-486-2048.
Joel Mekler is a certified senior adviser. Send him your Medicare questions at firstname.lastname@example.org.