Seniors pay hundreds and even thousands of dollars each year for their prescription medications. Yes, optional Medicare Prescription Drug Plans (Part D) and Medicare Advantage Plans (Part C) can help cover some of these costs, but formularies are constantly changing, and these types of add-on coverage also involve additional expenses. While prescriptions may be more affordable with expanded drug coverage, premiums, deductibles, copayments and coinsurance can still add up quickly.
Fortunately, some seniors can enroll in Part D prescription drug coverage at reduced costs through the Medicare Extra Help program. Also known as the Part D low-income subsidy, Extra Help is a federal program that helps seniors with limited income and assets afford Part D coverage and their medications. According to the Social Security Administration (SSA), Extra Help is worth approximately $4,900 each year.
Eligibility Requirements for Extra Help
The Extra Help program is open to Medicare Beneficiaries in all 50 states and the District of Columbia. Depending on a Medicare beneficiary’s financial status, there are three different levels of Extra Help available. Those with lower income and fewer resources get the most financial assistance through this program.
The upper resource (asset) limit for Extra Help in 2018 is $14,100 for a single person and $28,150 for a married couple living together. Resources include real estate, bank accounts, investments like stocks, bonds, and mutual funds, cash, and retirement accounts. A beneficiary’s primary residence, car, life insurance policies, property that is used for self-support (e.g. personal farm land or rental property), burial expenses, and personal possessions do not count as resources.
Owned Resource Limits
Married Couple: $14,340
Married Couple: $14,340
Married Couple: $28,150
The upper annual income limit for Extra Help in 2018 is $18,210 for a single person and $24,690 for a married couple living together. However, some beneficiaries with income that exceeds these limits may still be able to qualify for the program. Not all cash payments a beneficiary receives count toward the Extra Help income limit. For example, Supplemental Nutrition Assistance Program (SNAP) benefits, housing assistance, home energy assistance, and assistance from others to help the beneficiary pay household expenses are not considered income.
Monthly Income Limits
Married Couple: $1,392
Married Couple: $1,872
Married Couple: $2,078
Costs Under Extra Help
Monthly premium amounts vary between Medicare Part D plans, but the average premium is $34 per month in 2018. This may seem affordable but remember that many of these plans feature a deductible that must be met before coverage kicks in. The highest deducible that a plan can charge in 2018 is $450. In addition to these costs, copayments and coinsurance on individual prescriptions can get very pricy for some seniors, especially those who take several medications and those who take drugs that fall into more expensive brand name and specialty tiers. The Extra Help program mitigates these costs in a number of ways.
When it comes to premiums, deductibles, copayments and coinsurance, Extra Help puts a big dent in out-of-pocket costs for drugs and drug coverage. The 2018 costs are explained in detail below for each level of the program.
Costs for Covered Generic Drugs
15% of cost up to $5,000
Costs for Covered Brand Name Drugs
15% of cost up to $5,000
Some Medicare beneficiaries do not sign up for any kind of prescription drug coverage during their Initial Enrollment Period because they already have this coverage through an employer or do not take medications that would warrant the additional coverage. However, if a senior goes without any kind of prescription drug coverage (Part C, Part D or other creditable coverage) for a continuous period of 63 days or more following their initial enrollment opportunity, then they will owe a late enrollment penalty that is based on their length of noncoverage. This penalty is incorporated into a senior’s premium payments once they enroll in a Medicare Part D program. Fortunately, most seniors who qualify for Extra Help do not have to pay the late enrolment penalty.
How to Apply for Extra Help
If you think you or someone you love may be eligible for Extra Help with their prescription drugs, then it’s important to apply. Applying online at http://www.socialsecurity.gov/extrahelp is the easiest option. Medicare beneficiaries can also apply over the phone by calling 1-800-772-1213 or in person at a local Social Security office. Seniors who apply online also have the option to see if they are eligible for any Medicare Savings Programs that individual states offer to help with other Medicare costs.
Medicare may also send out notices to beneficiaries who automatically qualify for Extra Help or who may qualify based on their eligibility for other needs-based programs like Medicaid, Medicare Savings Programs and Supplemental Security Income (SSI) benefits. In cases of automatic qualification, Medicare will enroll the beneficiary in a Part D plan with the option to switch to another prescription drug plan of their choice.