Medicare Part D Extra Help: Who Qualifies and How to Apply

Extra Help is a Medicare program that helps people with limited income and resources pay for Medicare Part D drug coverage, including premiums, deductibles, coinsurance, and other costs. Some people get it automatically, and everyone else applies through Social Security with Form SSA-1020. You may also see it called the Part D Low-Income Subsidy, or LIS. This guide explains what it covers, how eligibility works, how to apply, and what the letters from Medicare mean.

Key takeaways

• Extra Help lowers Part D premiums, deductibles, coinsurance, and other drug costs. You don't pay a Part D late enrollment penalty while you get it.
• You get it automatically if you have full-benefit Medicaid, get help paying your Part B premium through a Medicare Savings Program, or get Supplemental Security Income (SSI).
• Everyone else applies through Social Security online, by phone, or at a local office. You can apply any time.
• Extra Help is not a drug plan. If you qualify and don't have a plan, Medicare enrolls you in one, and you can choose a different one.
• With Extra Help, you can change your drug coverage once a calendar month.

What does Extra Help pay for?

Extra Help lowers what you pay for Medicare drug coverage. Medicare says it helps with:

• Part D premiums
• Deductibles
• Coinsurance and other costs

Medicare.gov posts the yearly Extra Help copay limits for generic and brand-name drugs. It also posts the out-of-pocket point after which covered drugs cost you nothing. These amounts change every year, so check the "Help with drug costs" page on Medicare.gov for the current figures.

You also don't pay a Part D late enrollment penalty while you get Extra Help.

Extra Help isn't available in Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana Islands, or American Samoa.

Who gets Extra Help automatically?

You get Extra Help without applying if any of these is true:

• You have full-benefit Medicaid.
• Your state helps pay your Part B premium through a Medicare Savings Program.
• You get Supplemental Security Income (SSI).

Everyone else has to apply. Social Security's online application tells people who have Medicare plus SSI, or Medicare plus Medicaid, not to fill it out, because they already get Extra Help.

If you qualify automatically, Medicare mails you a purple "Deemed Status Notice." Keep it. Your plan must accept it as proof that you get Extra Help.

Medicare Savings Programs help with Part B premiums and other Medicare costs. Our guide to Medicare Savings Programs in Texas explains how they work.

How do you know if you qualify for Extra Help?

In most cases, you qualify only if your income and resources are below set limits. Those limits may go up each year.

Where to find this year's limits

Medicare.gov lists the current income and resource limits for individuals and married couples. It has separate limits for Alaska and Hawaii. Check the "Help with drug costs" page on Medicare.gov for the figures that apply to you.

What counts as a resource?

Social Security counts some things you own and leaves others out.

Some money isn't counted for nine months, such as retroactive Social Security or SSI payments.

For example, say you own your home and a car, and you have a life insurance policy. None of those count. A savings account and an IRA would count.

Which payments don't count as income?

Social Security doesn't count some payments as income, including:

• SNAP (food stamps)
• Housing assistance
• Home energy assistance
• Medical treatment and drugs
• Disaster assistance
• Earned income tax credit payments
• Help from others with household expenses

How are married couples counted?

If you're married and live with your spouse, both spouses' income and resources count, even if only one of you applies. If you don't live with your spouse, only your own income and resources count.

Can you qualify with income above the limit?

You may still get some help with income above the limit if you or your spouse:

• Support other family members who live with you
• Have earnings from work
• Live in Alaska or Hawaii

If you're close to the limit, apply anyway and let Social Security decide.

How do you apply for Extra Help through Social Security?

You apply with the Application for Extra Help with Medicare Prescription Drug Plan Costs (Form SSA-1020). You can apply any time, before or after you enroll in Part D.

1. Gather your records for you and your spouse (see the list below).
2. Choose how to apply:
   • Online through Social Security's website
   • By phone at 1-800-772-1213 (TTY 1-800-325-0778)
   • At a local Social Security office
3. Decide about the Medicare Savings Program question. Unless you say no, Social Security sends your information to your state to start a Medicare Savings Program application.
4. Watch your mail for a Notice of Award or a Notice of Denial.
5. Join a drug plan, or check the one Medicare picks for you. The help works only once you're in a Medicare drug plan.

What documents should you gather?

Social Security suggests having these on hand for you and your spouse:

• Bank statements
• Tax returns
• IRA or 401(k) balances
• Pension, veterans, annuity, and Railroad Retirement statements

Can you apply for your mother or father?

Yes. Family members, caregivers, and others can help someone apply. They must answer the questions as if that person were filling out the application. If your parent is married and lives with their spouse, include the spouse's income and resources too.

Do you need a Part D plan to get Extra Help?

You don't need a plan to apply. But the application doesn't enroll you in a drug plan, and the help doesn't start until you're enrolled in a Medicare drug plan.

If you qualify and don't already have a drug plan, Medicare will enroll you in one. You can pick a different Medicare drug plan if you want.

What if you need drugs before your plan starts?

Medicare's Limited Income Newly Eligible Transition (LI NET) Program gives temporary Part D coverage to people who qualify for Extra Help or Medicaid but aren't in a drug plan yet. It covers all Part D covered drugs with no pharmacy network limits. It may also cover prescriptions you filled recently. Call LI NET at 1-800-783-1307 (TTY 711).

Will Extra Help pay your whole Part D premium on any plan?

Not on every plan. Medicare's letters show how this works:

• Reassignment. If your plan's premium next year is higher than what Extra Help covers, Medicare moves you to a new plan unless you choose to stay or switch. That Reassignment Notice comes in late October.
• LIS Choosers. If you picked your own plan and its premium is changing, you get an LIS Choosers Notice in early November. It says you'll pay part of the premium next year unless you join a new plan with no premium.

A plan Medicare picks may not suit your prescriptions or pharmacy. Before you stay or switch, check that the plan covers your drugs and works with your pharmacies. Our guide on how to compare Medicare Part D plans walks through those checks.

What do the colored letters from Medicare mean?

Medicare uses colored notices for Extra Help. Here are the ones named in Medicare's fact sheet.

The gray letter comes in September. It means you must apply through Social Security to see if you still qualify. It doesn't mean you can't qualify, only that it's no longer automatic.

How often can you change drug plans with Extra Help?

If you have Medicaid or get Extra Help, you can change your drug coverage once a calendar month. The change takes effect on the first day of the next month. This replaced the old once-a-quarter rule, so older articles that say "quarterly" are out of date.

With this monthly Special Enrollment Period, you can:

• Switch to a different Medicare drug plan
• Drop a Medicare Advantage Plan with drug coverage and go back to Original Medicare by joining a stand-alone drug plan

It isn't available if your plan has identified you as "at-risk" or "potentially at-risk" under a Part D drug management program.

If you find out you won't be eligible for Extra Help next year, you get a separate Special Enrollment Period. It lasts 3 full months from the date you're no longer eligible or the date you're notified, whichever is later.

How long does approval take, and how long does Extra Help last?

The Texas Department of State Health Services says Social Security can take three to six weeks to process an application. It then sends a Notice of Award or a Notice of Denial.

Once you qualify, you keep Extra Help through December 31, even if your income changes mid-year. If you meet next year's limits and get no notice from Medicare or Social Security, you keep Extra Help and the same plan next year.

The yearly review

Social Security reviews eligibility each year, usually at the end of August, using form SSA-1026. If you get one:

1. Fill it out and return it within 30 days.
2. Expect any change to take effect the next January.

If you don't return the form, Extra Help stops the next year.

What if your plan charges you the wrong amount?

Show your plan proof that you get Extra Help. Your plan must accept any of these:

• A purple, yellow, or green notice from Medicare
• A Social Security Extra Help "Notice of Award"
• An SSI award letter

Keep copies where you can find them, and bring one to the pharmacy if you're charged more than you expect.

What if you have retiree or employer drug coverage?

If you have employer or union retiree coverage and enroll in Medicare drug coverage, you may lose that coverage for you and your dependents. This is true even if you qualify for Extra Help.

Call your benefits administrator before you enroll. If Medicare is placing you in a plan and you want to opt out, call the plan listed in your letter.

What happens if Social Security denies your application?

You can appeal with Form SSA-1021, the Appeal of Determination for Extra Help with Medicare Prescription Drug Plan Costs. You have 60 days from the date you receive the notice. Social Security assumes you received it 5 days after the date on the letter.

Social Security usually holds the appeal hearing by phone. If you don't want a phone hearing, it decides by reviewing your file and any new information you send.

You can also reapply any time your income or resources change.

How does Extra Help work in Texas?

• Medicare Savings Program enrollees. Texas Health and Human Services says people who have Medicare and Medicaid, or who qualify for a Medicare Savings Program, don't need to apply to Social Security for Extra Help. Texas sends MSP-eligible people's information to CMS automatically.
• Free counseling. The Texas Health Information, Counseling and Advocacy Program (HICAP) is the Texas SHIP. Call 800-252-9240. Counselors explain Part D, help compare plans, and help you look for other prescription help.
• Texas HIV Medication Program (THMP). People in THMP who get partial Extra Help or are denied, and who still meet THMP rules, move to THMP's State Pharmaceutical Assistance Program (SPAP). It helps with Part D copays and coinsurance. Call THMP at 800-255-1090.

For the bigger picture, see our plain-English guide to Medicare in Texas.

Common mistakes to avoid

• Assuming you earn too much. Your home, car, and life insurance don't count as resources, and some payments don't count as income.
• Waiting to apply until you have a plan. You can apply before or after you enroll in Part D.
• Ignoring the gray letter. It means you must apply through Social Security to keep checking whether you qualify.
• Skipping the SSA-1026 review form. Extra Help stops the next year if you don't return it within 30 days.
• Keeping a plan Medicare picked without checking it. Make sure it covers your drugs and pharmacies.
• Enrolling before calling your retiree benefits office. You could lose that coverage for you and your dependents.

What to do next

1. Check whether you already get Medicaid, SSI, or a Medicare Savings Program. If so, look for your purple notice.
2. If not, compare your income and resources with the current limits on Medicare.gov.
3. Gather your records and apply with Form SSA-1020 online, by phone, or at a Social Security office.
4. Once approved, confirm your drug plan covers your prescriptions and pharmacies.
5. In Texas, call HICAP at 800-252-9240 for free help comparing plans.

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