Medicare Part D Extra Help · FindMyMoney.App

Quick Facts

Benefit value: Depending on plan and medication use, Extra Help can save beneficiaries an estimated $5,300 or more per year by covering Part D premiums up to the benchmark amount, reducing or eliminating deductibles, and capping copayments at nominal amounts for generics and brand-name drugs.
Administering agencies: Social Security Administration (SSA) processes most applications; state Medicaid offices handle applications tied to Medicare Savings Programs (MSPs).
Eligibility triggers: Limited income and resources, Medicare Part A and/or Part B enrollment, and residency in the United States.
Automatic qualifiers: Individuals receiving Supplemental Security Income (SSI), full Medicaid benefits, or enrolled in an MSP automatically receive Extra Help.
Application routes: Online application at SSA.gov, telephone interviews, paper forms, or state Medicaid agency submissions.

Program Overview

Medicare Part D Extra Help—also known as the Low-Income Subsidy (LIS)—is a federal program that dramatically reduces prescription drug costs for people with Medicare. The benefit helps with monthly premiums, annual deductibles, coverage gap (donut hole) expenses, and pharmacy copayments. For beneficiaries juggling chronic conditions and fixed incomes, Extra Help can mean the difference between adhering to medication regimens and skipping doses to pay rent.

Extra Help works in tandem with Part D plans offered by private insurers. The subsidy pays the plan premium up to a regional benchmark set by the Centers for Medicare & Medicaid Services (CMS). Beneficiaries can choose any Part D plan, but selecting one at or below the benchmark ensures no premium out-of-pocket costs. The subsidy also protects beneficiaries from catastrophic cost-sharing and provides a Special Enrollment Period (SEP) to switch plans once per calendar quarter during the first three quarters of the year.

Because the program is integrated with other low-income Medicare supports, understanding how Extra Help interacts with Medicaid, Medicare Savings Programs, and state pharmaceutical assistance programs (SPAPs) is essential. When coordinated effectively, these programs can eliminate nearly all prescription costs, relieve debt from pharmacy bills, and reduce the administrative burden of managing multiple renewal timelines.

Eligibility Requirements

Extra Help considers both income and resources. The SSA updates thresholds annually, so check current limits each January.

Income Limits

In 2025, individuals typically qualify with annual income at or below roughly $22,000, and married couples qualify up to around $30,000. Exact thresholds vary because SSA disregards certain income sources such as SNAP benefits, housing assistance, and the first $20 of most income.
Work-related expenses, impairment-related expenses, and half of earned income for working beneficiaries are also excluded in the calculation. These exclusions help part-time workers or caregivers maintain employment without losing Extra Help.
Beneficiaries can qualify even if their income exceeds published limits due to allowable deductions. Therefore, always submit an application unless your income dramatically exceeds the guidelines.

Resource Limits

Countable resources include bank accounts, stocks, bonds, mutual funds, IRAs, and second properties. SSA excludes a primary home, one vehicle, personal possessions, life insurance with face value up to $1,500 per person, and burial plots.
For 2025, individuals qualify with resources up to approximately $17,000, and married couples qualify up to approximately $34,000, excluding the resources mentioned above.
If resources temporarily spike (e.g., due to a life insurance payout used for funeral expenses), document how funds were spent to demonstrate continued eligibility.

Automatic Enrollment

You automatically receive Extra Help if you:

Have full Medicaid coverage,
Receive Supplemental Security Income (SSI), or
Participate in a Medicare Savings Program (QMB, SLMB, or QI).

SSA mails a confirmation letter to automatic enrollees. Even if you are automatically enrolled, review the letter to ensure the correct level of subsidy is assigned and confirm whether you need to choose a benchmark plan to avoid premiums.

Residency and Enrollment Requirements

Applicants must reside in one of the 50 states or the District of Columbia and be enrolled in Medicare Part A and/or Part B plus a Part D plan. People in U.S. territories cannot receive Extra Help but may be eligible for territory-specific programs.

Application Process

Although SSA data sharing simplifies enrollment, most beneficiaries still need to submit an application. Here’s how to do it efficiently.

Step 1: Gather Documentation

Social Security numbers for the applicant and spouse
Financial statements for bank accounts, retirement accounts, and investments
Information on pensions or annuities
Documents showing household expenses, since certain costs (like Medicare premiums) reduce countable income
Proof of living arrangements if you share housing expenses with others

Step 2: Complete the Application

Online: Use the SSA Extra Help application. The site supports English and Spanish and allows you to save progress.
Phone: Call 1-800-772-1213 to complete the application with an SSA representative. TTY users call 1-800-325-0778.
Paper: Fill out SSA Form 1020 and mail it to the address listed or drop it off at a local Social Security office.
State Medicaid office: If you apply for a Medicare Savings Program through your state, the state forwards your information to SSA for Extra Help evaluation.

Step 3: Review and Follow Up

SSA typically sends a decision within a few weeks. If approved, you receive an award letter outlining your subsidy level—full or partial—and explaining premium benchmark amounts. If denied, the letter includes appeal instructions.

Step 4: Choose or Review a Part D Plan

Compare Part D plans annually during Open Enrollment (October 15 to December 7) or use your quarterly SEP to switch if your medications change.
Use the Medicare Plan Finder to identify benchmark plans with preferred pharmacies that minimize copays.
When switching plans, inform the new plan that you receive Extra Help to avoid premium billing errors.

Managing the Subsidy Year-Round

Extra Help is not a “set it and forget it” program. Active management ensures you capture every dollar of savings and avoid surprise bills.

Keep SSA Informed of Changes

Report income or resource changes within 10 days. SSA may adjust your subsidy level mid-year, but benefits continue during review. Failing to report changes can trigger overpayment recovery.

Track Plan Notices

Part D plans send an Annual Notice of Change (ANOC) each September. Review how formularies, pharmacy networks, and utilization management rules (prior authorizations, step therapy) will change in the coming year. Use your SEP to switch plans if your medications will move to higher tiers or face new restrictions.

Coordinate with Pharmacies

Ensure your pharmacy has your Extra Help status on file. If you see unexpected copays, ask the pharmacy to submit an “E1 query” through their system to retrieve the latest LIS information. Keep a copy of your award letter in your wallet to show pharmacists.

Avoid Late Enrollment Penalties

Extra Help eliminates the Part D late enrollment penalty. If you are newly eligible for Medicare, applying for Extra Help before or during your Part D enrollment window protects you from future surcharges. Retain SSA confirmation to contest any erroneous penalty bills.

Manage Hospital or Skilled Nursing Facility Stays

Part D coverage pauses when you are in a hospital or skilled nursing facility receiving drugs covered under Part A or Part B. Inform family caregivers to notify the Part D plan and ensure coverage resumes smoothly upon discharge. Some facilities partner with case managers who specialize in Extra Help beneficiaries—ask for their assistance.

Advanced Strategies to Maximize Savings

“Winning” Extra Help involves layering programs, appealing adverse decisions, and planning for long-term affordability.

Pair with Medicare Savings Programs

Qualified Medicare Beneficiary (QMB) pays Part A and B premiums and most cost-sharing; Specified Low-Income Medicare Beneficiary (SLMB) and Qualifying Individual (QI) pay Part B premiums. Enrollment in any MSP automatically triggers Extra Help.
States often use a single application for both MSP and Extra Help. Request retroactive coverage if you faced high medical bills in the previous three months.

Use State Pharmaceutical Assistance Programs

Many states offer SPAPs that wrap around Extra Help to cover copays, non-formulary drugs, or gap expenses. For example, New Jersey’s PAAD and Senior Gold programs cap out-of-pocket costs.
Some SPAPs confer their own Special Enrollment Periods, allowing plan changes beyond the standard Extra Help SEP.

Apply for Tiering Exceptions

If a medically necessary drug falls on a high-cost tier, request a tiering exception. Extra Help beneficiaries still owe reduced copays on approved exceptions. Work with your physician to submit supporting documentation citing treatment failure or adverse reactions with lower-tier medications.

Appeal Denials Promptly

If SSA denies Extra Help, file an appeal within 60 days. Provide updated financial records, clarify resource exclusions, or document hardship expenses.
If a Part D plan denies coverage for a medication, file a coverage determination request. Mention your Extra Help status; plans must expedite requests that involve life-threatening conditions.

Monitor Resource Limits Proactively

Before selling property or receiving inheritances, consult benefits counselors. Some transactions can be structured as spend-downs—for example, paying off debts, prepaying funeral expenses, or making home modifications for accessibility—so resources stay under the limit.
Keep meticulous receipts to demonstrate legitimate spend-downs if SSA questions resource reductions.

Plan for Marriage, Divorce, or Widowing

Marital status changes affect income and resource calculations. Notify SSA immediately to avoid benefit interruptions.
If you marry someone with higher income, explore spousal impoverishment protections through Medicaid or consider filing separately for tax purposes if it lowers countable income.

Coordinate with Employers

Beneficiaries who continue working should maximize pre-tax deductions (health savings accounts, flexible spending accounts) and retirement contributions, which lower countable income. Request itemized pay stubs showing deductions to present to SSA reviewers.

Common Pitfalls and How to Avoid Them

Forgetting Annual Redeterminations

SSA periodically reviews eligibility. Watch for redetermination packets and return them within 30 days. If you miss the deadline, your subsidy may lapse. Set calendar reminders, and consider assigning a trusted representative payee to manage mail if you travel frequently.

Ignoring Benchmark Premiums

If you enroll in a plan above the benchmark, you owe the difference even with Extra Help. Before switching plans, confirm the premium amount listed in the Plan Finder under “Your Plan Costs after Extra Help.”

Misunderstanding Resource Exclusions

Some applicants mistakenly count burial funds or property intended for business use as resources. Review SSA’s resource exclusions list to avoid unnecessary denials.

Overlooking Generic Alternatives

Even with Extra Help, brand-name drugs can require higher copays. Ask pharmacists to identify therapeutically equivalent generics or lower-tier alternatives. Use manufacturer patient assistance programs to bridge coverage gaps for drugs without alternatives.

Failing to Update Address

SSA mail cannot be forwarded. If you move, update your address with SSA and Medicare promptly to ensure you receive award letters, redetermination packets, and plan notices.

Insider Tips to Win Medicare Part D Extra Help

Pre-screen with BenefitsCheckUp. Use the National Council on Aging’s tool to confirm eligibility and prepare documentation before contacting SSA.
Leverage SHIP counselors. State Health Insurance Assistance Programs offer free, unbiased counseling. Schedule an appointment during Open Enrollment to compare benchmark plans and avoid premium surprises.
Use your quarterly Special Enrollment Period strategically. Align plan switches with medication changes or pharmacy closures to maintain uninterrupted coverage.
Track pharmacy receipts. Extra Help limits out-of-pocket costs, so reconcile receipts monthly to ensure you are not overcharged. Request refunds promptly when errors occur.
Request case management from your Part D plan. Many plans provide medication therapy management (MTM) services for Extra Help members with multiple chronic conditions. MTM consultations can identify drug interactions and suggest cost-saving substitutions.
Automate premium payments when owed. If you choose a plan above the benchmark, enroll in automatic deductions to avoid late fees. Monitor bank statements to confirm correct amounts.
Coordinate with caregivers. Authorize a caregiver through SSA’s representative payee or Medicare’s 1-800-MEDICARE authorization form so they can speak on your behalf during appeals or plan changes.
Document Special Circumstances. If a life event temporarily boosts income—such as selling a home due to downsizing—submit SSA Form SSA-44 to report a life-changing event and request income adjustments.
Integrate prescription discount cards carefully. Present your Part D plan first; only use discount cards when the prescription is not covered. Otherwise, the purchase may not count toward your true out-of-pocket costs (TrOOP).
Educate your providers. Inform physicians that you receive Extra Help so they can prescribe formulary drugs or submit prior authorizations preemptively.