- Extra Help can help you pay for Medicare Part D if you have limited income and resources.
- Part D is the part of Medicare that covers prescription drugs.
- As an individual, you must make less than $19,320 and have less than $14,790 in resources to qualify.
- If you’re married, you and your spouse will need to make less than $26,130 in total income and have less than $29,520 in combined resources.
If you need help paying for the costs of your Medicare Part D prescription drug plan, you might qualify for assistance through a program called Extra Help. To qualify for Extra Help, you need to meet certain financial requirements.
Read on to learn about Medicare’s Extra Help program, including this year’s income limits, how to qualify, enrollment information, and more.
When you have a Medicare Part D (prescription drug) plan, you’re responsible for monthly premiums, deductibles, copayments, and coinsurance amounts.
Medicare Extra Help can help you pay some or all of those costs.
The program is overseen by the Social Security Administration (SSA) and is based on income. The SSA estimates that program participants can save as much as $5,000 per year.
The Medicare Extra Help program is designed to help beneficiaries with limited incomes pay for their medications. To qualify, Medicare requires that you meet a few requirements.
First, you’ll need to be eligible for Medicare and enrolled in parts A and B, also called original Medicare. Next, you’ll need to meet the income qualifications.
The Medicare Extra Help income limits are set by a government standard called the federal poverty level. This is redetermined every year and looks at factors like the cost of living and average incomes in each state.
The federal poverty level is then used to help the government set qualifications for programs like Medicaid, Housing Assistance, and Medicare Extra Help. This means the income limits for Extra Help might change slightly each year as the federal poverty level does.
You’ll need to meet the current limit to qualify for the program.
In 2021, you need to have an income of less than $19,320 if you’re single. If you’re married and live with your spouse, your combined income needs to be less than $26,130.
However, if your income is slightly higher, you might still qualify in certain cases. Examples include:
- living in Alaska or Hawaii
- supporting a dependent family member
- having earnings from work you’ve done
Plus, Medicare doesn’t count all the payments you receive in a year toward the income limit.
Let’s say you make $15,000 a year, receive Supplemental Nutrition Assistance Program (SNAP) benefits to help you with your grocery expenses, and get $5,000 from a family member to help with a major home repair.
This might make it seem like your income is greater than $20,000, and you wouldn’t qualify for Extra Help. But this isn’t actually the case. Medicare won’t consider the amount of your SNAP benefits or the $5,000 as part of your income for the year.
In fact, many types of payment or aid you might receive in a year won’t count as income when it comes to qualifying for Extra Help. This includes help or payments from federal or local government programs such as:
- housing assistance
- home energy assistance
- earned income tax credit payments
Medicare also won’t count the money you received in an emergency situation. Examples include:
- disaster assistance
- help from others to pay your household expenses
- victim’s compensation payments
Additionally, Medicare doesn’t count any scholarships or grants toward your education or a member of your household’s education. Money you received from any of these sources won’t be counted as income and can’t disqualify you for Extra Help.
Are there resource limits?
The short answer is yes.
Your income and resources both need to fall below a certain amount in order for you to qualify for Extra Help. Resources are things like savings accounts, stocks, IRAs, bonds, and real estate that’s not your primary home.
Your home, your car, and any valuables you own don’t count as resources. Medicare also won’t count large payments, such as the payout from a life insurance policy or a tax refund.
To qualify in 2021, your resources can’t exceed $14,790 as an individual. If you’re married, you need to have combined resources of less than $29,520 to qualify.
Can you automatically qualify for Extra Help?
You can automatically qualify for Extra Help if you already receive assistance from another government program, including:
- a Medicare savings program (MSP) that helps you pay your Part B premiums
- Supplemental Security Income (SSI) benefits
As a participant of one of these programs, you’ll still need to be enrolled in both parts of original Medicare, but you won’t need to apply separately or submit income information again. You’ll be automatically qualified for the Extra Help program.
You can apply for Extra Help in a few different ways.
One of the quickest ways is to apply online. The SSA has an online application you can use to get started right away. You can also mail in your application.
If you need assistance with your application you can:
- Apply by phone at 800-772-1213 or 800-325-0778. You can call Monday through Friday between 7 a.m. and 7 p.m.
- Apply at your local Social Security office.
- Apply at your local Medicaid office. This option is only available if you qualify for Medicaid.
No matter how you apply, you’ll need to be prepared to give the SSA information about your finances. This can include:
- recent pay stubs
- bank statements, including for any savings accounts
- stock certificates or investment statements
- information about your pension
- recent tax returns
Once your application is approved, you’ll need to enroll in a Part D plan. Medicare considers your approval for Extra Help a qualifying event for a special enrollment period, so you don’t need to wait for a standard enrollment period.
This means you can select a Part D plan as soon as your Extra Help is approved. You can shop for Part D plans directly on the Medicare website.
You don’t need to apply separately if you’re already enrolled in Medicaid, an MSP that pays your Part B premiums, or in SSI. In these cases, you’ll be automatically enrolled in Extra Help when you join a Part D plan.
Your eligibility for Medicare Extra Help lasts for an entire year. But Social Security will review your eligibility periodically.
To do this, the SSA will contact you with a form. These forms typically get sent out in the fall. If you don’t receive one, you can count on your Extra Help staying the same in the coming year.
If you do get a form, you’ll need to fill it out within 30 days and send it back. If you don’t, your coverage will end in January of the upcoming year. For example, if you receive an eligibility review form from Social Security on September 14, 2021, and don’t send it back by October 14, your Extra Help will end in January 2022.
When you return the form, a few things might happen. Depending on changes to your income, your Extra Help could:
- stay the same
The SSA will notify you of this decision. If you no longer qualify or qualify with higher out-of-pocket costs, you’ll get a letter explaining the changes. You might need to start paying premiums to keep your Part D plan.
Even if you no longer qualify for Extra Help, you might still be able to get help paying your Part D costs. You can contact your state’s Medicaid office or State Health Insurance Assistance Program (SHIP) for information on programs that can help you pay for your prescriptions.
How do I know if I’m enrolled in Extra Help?
You’ll receive notice of your Extra Help status from the SSA. Notices are different colors depending on your status:
- Purple notices mean you’re automatically qualified.
- Yellow or green notices mean you’re automatically enrolled.
- Gray notices mean you’re no longer automatically qualified.
- Orange notices mean the amount of Extra Help you’re getting is changing.
It’s important to keep an eye on your mail and keep track of the notices you get from Social Security. Reading all communication ensures you won’t be surprised by any costs and will have time to prepare for any changes.
Original Medicare (parts A and B) doesn’t include coverage for prescription drugs. Instead, Part A covers hospital stays and other inpatient care, while Part B covers medical expenses like emergency care, doctors’ visits, and equipment.
A separate Part D plan helps beneficiaries cover the cost of their prescriptions. Part D plans are offered by private insurance companies and have their own premiums, deductibles, and copayments.
The Part D plan available to you will depend on your state. It’s important to compare plans closely. Many plans have a network and work only with certain pharmacies.
Plus, Part D plans have what is called a formulary. This is a list of drugs covered by the plan. If a prescription you need isn’t on a plan’s formulary, that plan isn’t a good fit for you.
The Medicare website allows you to enter your current pharmacy and medications when you shop for plans, so you’ll see only plans that’ll work for you.
Other programs that may help you pay for Medicare and healthcare costs
These programs can help you pay your Medicare costs:
- Medicaid. Medicaid is federal program overseen by each state that helps people with limited incomes pay their healthcare costs.
- Medicare savings programs (MSPs). MSPs help people with limited incomes pay some of the out-of-pocket costs of Medicare.
- Program of All-inclusive Care for the Elderly (PACE). PACE helps people with Medicare or Medicaid receive healthcare coverage in their communities.
- Medicare Extra Help can help you afford your Part D plan.
- You’ll be automatically enrolled in Extra Help if you enroll in a Part D plan and you already have SSI, Medicaid, or an MSP that pays your Part B premiums. Otherwise, you’ll need to apply with Social Security.
- You’ll need to meet specific income requirements to qualify. Once you’re approved, you can sign up for a Part D plan right away without having to wait for an enrollment window.