Extra Help: how to lower your Medicare prescription drug costs

Medicare Part D covers prescription drugs through private plans, each with a monthly premium, a deductible and copays or coinsurance that can be substantial for brand-name medicines. Extra Help is a federal subsidy that reduces all three for beneficiaries with limited means.

Under current rules, people who qualify generally pay no deductible, pay no premium if they choose a benchmark plan in their area, and pay small fixed copays for generic and brand-name drugs. Extra Help was expanded in 2024 so that more people with incomes up to a higher threshold receive the full subsidy rather than a partial one, which made it considerably more valuable for people just above the old limits.

Extra Help also gives you flexibility. Most people can only change Part D plans during set enrolment periods, but Extra Help enrollees can switch drug plans more often under a special enrolment rule. That is useful if your plan stops covering a drug you need.

Many people never realise they qualify. If you are enrolled in Medicaid, receive SSI, or are in a Medicare Savings Program, Medicare enrols you in Extra Help automatically and sends a purple letter. Everyone else must apply - and because Social Security only counts certain resources, people with modest savings frequently qualify.

There is no penalty for applying and being turned down, and the application is free. Applying also starts a Medicare Savings Program application with your state unless you opt out, which may get you help with premiums as well.

Resources include bank accounts, stocks and bonds, but not your home, one car, burial plots, or life insurance in many cases. The limits are higher for married couples.

1. Check if you already qualify automatically

   If you have Medicaid, SSI or a Medicare Savings Program, look for a purple letter from Medicare confirming Extra Help.

2. Apply through Social Security

   Apply online at ssa.gov, call 1-800-772-1213, or visit a local office. The application takes about 30 minutes.

3. Have your information ready

   Bank statements, income information, and details of investments and life insurance. You generally do not need to send documents unless asked.

4. Let it start an MSP application

   Unless you opt out, your Extra Help application is shared with your state to check you for a Medicare Savings Program.

5. Enrol in a Part D plan

   If you are not already in a drug plan, choose one. A benchmark plan means no premium for full-subsidy enrollees.

6. Check your copays at the pharmacy

   Your pharmacy should charge Extra Help copays. If not, show your approval letter.

7. Review your plan each year

   Use Medicare's Plan Finder to make sure your drugs are still covered.

Extra Help / LIS

The Part D Low-Income Subsidy lowering Medicare drug costs for people with limited means.

Benchmark plan

A Part D plan with a premium at or below the regional amount Extra Help fully covers.

Purple letter

A Medicare notice confirming automatic Extra Help eligibility.

Countable resources

Savings and investments counted for Extra Help, excluding your home and car.

Deemed eligibility

Automatic Extra Help for people on Medicaid, SSI or a Medicare Savings Program.

Part D

Medicare's prescription drug coverage, provided by private plans.

• SSA - apply for Extra Helpwww.ssa.gov
• Medicare.gov - help with costswww.medicare.gov