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Life Health > Health Insurance > Medicare Planning

Prescription Cost Help: A Medicare Customer Question

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What You Need to Know

  • Medicare Extra Help is also known as the Medicare Part D Low-Income Subsidy program.
  • The income cut-off for a single filer is $19,320, and the asset cut-off for a single filer is $14,790.
  • The value of a home and vehicle are not included in the asset calculations.

Prescription drug prices are the most visible sign to consumers of the high cost of health care, and a study from the University of Pittsburgh’s Center for Pharmaceutical Policy and Prescribing found that the price for brand-name drugs increased, on average, by 159% between 2007 and 2018. Pharmaceutical companies continued raising the prices of more than 800 drugs during the pandemic, increasing the cost of nearly 70 drugs by an average of 3.1% in July 2020.

Some Medicare enrollment questions come from beneficiaries who need help paying for their prescriptions.

Here’s one that’s probably on the minds of many of your clients who have, or soon will have, Medicare coverage, especially in light of the economic challenges — and surge in drug prices — experienced during the pandemic.

The Question

My prescriptions are expensive. Are there any programs to help pay for them?

The Answer

Yes! Medicare Extra Help is a subsidy that helps to lower the cost of your drug coverage through Medicare Part D. The coverage remains the same, but those who qualify pay, on average, $5,000 less per year. This program is also called the Part D Low-Income Subsidy (LIS) program, because it was created for people with limited financial resources.

To qualify in 2021, your income must be $19,320 a year or less, including wages, pensions, and Social Security benefits. If you’re married, your spouse’s income is part of the calculation, and the income limit increases to $26,130.

You must also have no more than $14,790 ($29,520 if you’re married) in resources, such as the balances in any bank accounts, retirement accounts, and cash, although your home and vehicle are not included in the determination. Your status will be reviewed each year, usually in August, to determine your eligibility to keep receiving the subsidy.

Some people are automatically enrolled in Extra Help, but if you haven’t been and believe that you’re eligible, you can fill out the online application on the Social Security Administration (SSA) website, call the SSA at +1-800-772-1213 to apply by phone or request a paper application, or apply in person, if your local Social Security office has reopened.

If you need assistance with costs that aren’t covered under Extra Help, there are state-run Medicare savings programs available to help cover costs from other parts of Medicare. When you apply for Extra Help, the SSA will share your information with your state, and someone will contact you to apply for the appropriate programs.

Bethany CissellBethany Cissell is a health care insurance services specialist at Allsup.

(Image: Shutterstock)


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