Medicare Extra Help: How it Works

Medicare Extra Help helps low-income Medicare beneficiaries pay for prescription drug coverage. It can save eligible beneficiaries about $4,900 a year.

Jeanine Skowronski

Jeanine Skowronski

Published July 6, 2018

Medicare Extra Help is a federal assistance program that helps low-income Medicare beneficiaries pay for medication. It covers all or most of the monthly premiums and annual deductible of a Medicare Prescription Drug plan (Medicare Part D). It also covers most of your Medicare Part D copays or coinsurance.

While the amount of assistance varies by income, Medicare Extra Help saves eligible beneficiaries about $4,900 a year, according to the Social Security Administration.

What is Medicare Extra Help?

Medicare, the federal health insurance program primarily for Americans 65 and over, comes in four parts. Medicare Savings Programs, or MSPs, help low-income beneficiaries cover out-of-pocket costs associated with Medicare Part A (hospital insurance) and Medicare Part B (doctors insurance). Medicare Extra Help helps low-income beneficiaries cover out-of-pocket costs associated with Medicare Part D, which covers prescription drugs. These expenses include:

  • The monthly premiums for a basic Medicare Part D plan in your state
  • Your Medicare Part D plan’s annual deductible
  • Copays or coinsurance for drugs covered by your Medicare Part D plan

If you are approved for an MSP, you automatically qualify for Medicare Extra Help, so it is possible to get financial assistance for all major Medicare expenses.

Learn more about the cost of Medicare.

MSPs and Medicare Extra Help do not cover costs associated with Medicare Part C (Medicare Advantage), which is a private alternative to Original Medicare (Parts A and B) and sometimes comes with prescription drug coverage.

Who qualifies for Medicare Extra Help?

You are eligible for Medicare Extra Help if you:

  • Live in one of the 50 states or Washington, D.C.
  • Are 65 or older
  • Have Medicare Part A and Medicare Part B
  • Meet the program’s income and resource limits

Note: You will need to have Medicare Part D, once you are approved for the Extra Help program.

Income and asset limits are based on the Federal Poverty Level (FPL), so they change every year in February or March. Below are the Medicare Extra Help income and asset limits for 2018:

Medicare Extra Help Limits 2018

IncomeAssets
Singleup to $18,120 a yearup to $14,100
Marriedup to $24,690 a yearup to $28,150

Your assets include money in a checking, savings or investment accounts. They exclude your home, a car, burial plot, furniture and other personal items. You can also subtract $1,500 for burial expenses.

How much does Medicare Extra Help cost?

Your income level affects whether you qualify for Full or Partial Medicare Extra Help.

Beneficiaries receiving Medicaid or a Medicare Savings Plan receive Full Extra Help and pay:

  • $0 premiums, up to your’s state benchmark limit
  • $0 deductible
  • $1.25 to $3.35 copays for generic drugs
  • $3.70 to $8.35 copay for brand-name drugs
  • No copay after paying $5,000 out-of-pocket for covered prescriptions

Medicare-only beneficiaries making up to $16,632 a year with up to $9,060 in assets ($22,464 in income and $14,340 in assets, if they’re married) also receive Full Extra Help and pay:

  • $0 premiums, up to your’s state benchmark limit
  • $0 deductible
  • up to a $3.35 copay for generic drugs and an $8.35 copay for brand-name drugs
  • No copay after paying $5,000 out-of-pocket for covered prescriptions

Medicare-only beneficiaries making more than the figure directly above, but still within the income and asset limits receive Partial Extra Help and pay:

  • Premiums based on income
  • $83 deductible or your plan’s standard deductible, whichever is cheaper
  • 15% coinsurance or the plan’s copay, whichever is less
  • $3.35 for generic drug copays and $8.35 for brand-name copays or 5% of the drug cost (whichever is greater), once they pay $5,000 out-of-pocket for covered prescriptions

State benchmark Medicare Extra Help premiums in 2018 run between $22 to $40.

How to apply for Medicare Extra Help

You automatically qualify and therefore do not need to apply for Medicare Extra Help if:

  • You’re receiving full Medicaid benefits
  • You’re already enrolled in a Medicare Savings Program
  • You’re receiving Supplemental Security Income (SSI) benefits

In all other scenarios, you can apply online for Medicare Extra Help on SSA.gov. You can also apply in person at your local Social Security office or call 1-800-722-1213 to apply over the phone or to request an application.

Once you apply, the SSA will review your application and send you a letter informing you as to whether you were approved. If you do qualify for Extra Help, you need to enroll in a Medicare Part D prescription drug plan. You can do so right away as approval for Extra Help qualifies you for a Medicare special enrollment period.

To get prescription drug coverage, compare Medicare Part D plans in your state on the Medicare website and apply for one directly with the insurer.

Our partner Via Benefits can help you find and compare Medicare plans in your area.

How Medicare Extra Help works

Once you have a plan, you’ll have to provide the insurer with documentation that you’re receiving Extra Help. This documentation can include:

  • A purple, yellow or green notice of automatic qualification from Medicare
  • An Extra Help award notice from the SSA
  • Your Supplemental Security Income award letter
  • A copy of your Medicaid card

After you’ve provided documentation, you should pay no more than $3.35 for each generic drug or $8.35 for each brand-name drug, so long as it’s covered by your Medicare Part D plan.

Remember, income limits and assets change every year, as do personal situations. Just because you automatically qualify for an MSP or Medicare Extra Help one year does not mean you will automatically qualify the next. You’ll receive a notice from Medicare around the end of September is the SSA believes you no longer automatically qualify for Extra Help.

In this case, you will need to reapply for the program through SSA.gov or your local Medicaid office. Learn more about applying for Medicare.

Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.