Extra Help with Prescription Drug Plans

What it is “Extra Help”?

Extra Help, also known as Low-Income Subsidy (LIS), with Medicare prescription drug plan costs is often misunderstood by its potential beneficiaries. This program is funded by Social Security to help individuals with limited income and resources pay for their Medicare Part D (prescription drug coverage) costs.

Savings include:

• reduced monthly plan premiums
• help with annual deductible
• reduced co-payments

It is estimated to be worth up to $4,000 per year and can save up to 75% of your prescription drug costs and eliminate the coverage gap or “donut hole”.

What is Medicare Prescription Drug Costs Coverage?

In case you are not already familiar, Medicare Prescription Drug Costs Coverage is also known as Medicare Part D plans, which are plans offered by private insurance companies created to assist Medicare beneficiaries with prescription expenses.

Medicare Part D plans vary based on costs, drugs covered, and rules to follow, but they all follow Medicare’s standard coverage design. They have 3 to 4 phases depending on whether or not the plan has a deductible.

In the first phase, you may pay a fixed Part D deductible and then a 25% coinsurance, in the form of co-pays, toward all of your prescription drug costs up to $3,820. After hitting that limit, you enter what is referred to as the “donut hole” or coverage gap. During this phase, you pay more for your medications. Following this is the catastrophic phase.

People who receive Medicare Extra Help will not enter the coverage gap.

How might all of this affect you?

The income threshold to apply for Extra Help is actually much higher than it is for Medicaid, which is why several people don’t realize that they would qualify. One out of five people are eligible – many unaware of their eligibility.

You may qualify for Extra Help (or LIS) if:

• Your annual income and assets are within the eligibility thresholds. The Medicare Extra Help program eligibility limits may change from year to year. For 2018, the following are ways to qualify…
  • Your resources (includes bank accounts, stocks, and bonds; excludes home, car, life insurance policy, etc.) must be limited to:
    • $14,100 for an individual
    • $28,150 for a married couple living together
  • Annual income must be:
    • $18,210 for an individual
    • $24,690 for a married couple living together
  • Your annual income is higher than the eligibility limit, but you support other family members who also live in the same household
  • You live in Hawaii or Alaska

You may qualify for Extra Help automatically if:

• You have Medicare AND meet any of the following conditions:
  • Have full Medicaid coverage
  • Receive help from your state Medicaid program (TennCare in Tennessee) paying your Part B premiums through a Medicare Savings Program
  • Get Supplemental Security Income (SSI) benefits

Additionally, if you qualify this year, there’s a chance you may not qualify again next year. The most likely reason for this is due to changes in your resource or income levels that would put you outside of the qualification threshold. Medicare will notify beneficiaries if you will no longer be eligible (grey paper) or if your co-payment amounts will change in the next year (orange paper). For more info, visit here.

Extra Help and Senior Financial Group

The best way to find out if you qualify for Medicare Extra Help is to go ahead and apply. Our Medicare insurance advisors assist with this application process. The application requires filling out the “Application for Extra Help with Medicare Prescription Drug Plan Costs” (SSA-1020) form with Social Security.

Our agents are happy to help you find this form online, call the Social Security office at 1-800-771-1213, or one of our advisors can visit you in your home to help you with this quick application. Another option is to apply in-person at your local Social Security office.

Many of our Senior Financial Group clients receive assistance with their Medicare Part D coverage through the Extra Help program as a result of assistance from one of our Medicare insurance advisors. Our local team serves all of East Tennessee. If you are located outside of East Tennessee, we have advisors that can assist you via phone consultation.

Get started to spend less on your prescription drugs by calling our office at 865-777-0153 or submitting a consultation request here. We look forward to joining you on your next steps to prescription drug cost savings!