Medicare Low-Income Subsidy (LIS), also Known as “Extra Help”

28 June 2023

People with Medicare who have limited income and assets may qualify for the Low-Income Subsidy (LIS), also known as “Extra Help”, which can help with the costs of their prescription drugs. The Social Security Administration (SSA) and the Centers for Medicare & Medicaid Services (CMS) work together to provide the benefit.

Some people get Extra Help automatically. These include people who are enrolled in both Medicaid and Medicare (often called dual eligibles), those receiving Supplemental Security Income (SSI), and those who qualify for a Medicare Savings Program (MSP).

Anyone else who is not already enrolled in the benefits noted above must apply to the Social Security Administration to receive Extra Help.

How Does Extra Help Work?

The amount of Extra Help a beneficiary receives depends on their income and resources, with beneficiaries receiving either a full or partial subsidy based on these factors. Most people who qualify for Extra Help will pay:

No premiums,
No deductibles (unless receiving the partial subsidy), and
No more than $10.35 for brand-name drugs and no more than $4.15 for generic drugs in 2023 for each drug their plan covers.

In addition, once you hit the 2023 maximum out-of-pocket (MOOP) limit for drugs (the TOTAL amount paid by BOTH you AND your plan), you’ll pay $0 for prescriptions for the remainder of the year.

For more information visit Medicare.gov

CLAIRE’S PERSPECTIVE

Medicare’s LIS “Extra Help” program is designed to help ensure that you are able to get the drugs that you need, regardless of your financial situation. If you are uncertain about whether or not you qualify, you should talk to a licensed agent, as they can help answer your questions and may even be able to help you apply.

In addition to lower out-of-pocket costs, beneficiaries with Extra Help have the following protections:

A quarterly Special Enrollment Period (one time every three months between January – September and once during Annual Open Enrollment) to join or switch Medicare Part D drug plans during the year. These opportunities allow people who get Extra Help to not wait for the Annual Open Enrollment Period (Oct. 15 – Dec. 7) to change plans. Any plan changes made outside the Annual Open Enrollment Period will become valid for the following month.
No Part D late enrollment penalty, even if the beneficiary enrolls late (that is, after they were first eligible to join a Part D plan and if they did not have other drug coverage).

What Personal Assets Count Toward Eligibility?

Cash and bank accounts, including checking, savings, and certificates of deposit
Real estate outside of your primary residence
Stocks and bonds, including U.S. savings bonds
Mutual funds and IRAs

CLAIRE’S PERSPECTIVE

Understanding what is and is not calculated will help you identify if you qualify for Medicare Extra help. Medicare does not count resources such as your primary residence, insurance policies, or a car. In fact, many people are eligible and do not realize it. There aren’t any penalties for applying to see if you qualify.

How Do I Apply for Medicare Extra Help?

To apply for the Medicare Low-Income Subsidy (LIS), you’ll need to fill out an “Application for Extra Help with Medicare Prescription Drug Plan Costs” (SSA-1020) form with the Social Security Administration (SSA). You can apply and submit this form by:

Applying online www.socialsecurity.gov/extrahelp.
Calling Social Security at 1-800-772-1213 (TTY 1-800-325-0778) and requesting an application be mailed to you or applying over the phone. Social Security representatives are available by phone Monday through Friday, from 7AM to 7PM.
Applying in person at your local Social Security office.

After you submit your application, the Social Security Administration will review it and send you a notification in the mail if you are eligible. If you qualify for Extra Help and are not yet enrolled in a Medicare Part D Prescription Drug Plan, you can enroll in a plan at that time.