Does Extra Help Pay for Part B Premium?

Medicare’s “Extra Help” program, also known as the Low-Income Subsidy (LIS), is a federal initiative designed to assist individuals with limited income and financial resources. It helps manage the costs associated with prescription drug coverage, making essential medications more affordable for beneficiaries. Understanding this program can significantly reduce an individual’s healthcare expenses. The Social Security Administration (SSA) oversees this program.

Eligibility for Extra Help

To qualify for Extra Help, individuals must meet specific income and resource thresholds, which are updated annually. For 2025, a single person’s annual income must be less than $23,475, while married couples living together must have a combined income less than $31,725. Exceptions may apply for those living in Alaska or Hawaii, supporting dependents, or having active employment earnings.

Resource limits for 2025 are $17,600 for individuals and $35,130 for married couples. Resources include financial assets like checking and savings accounts, certificates of deposit (CDs), stocks, bonds, and Individual Retirement Accounts (IRAs). Certain assets are not counted towards these limits, including a primary residence, one vehicle, personal belongings, and up to $1,500 per person for burial expenses. Automatic qualification for Extra Help occurs if an individual has full Medicaid coverage, receives Supplemental Security Income (SSI) benefits, or gets assistance from their state Medicaid program with Part B premiums through a Medicare Savings Program.

What Extra Help Covers

Extra Help provides financial assistance and can assist with Medicare Part B premiums. While Extra Help primarily focuses on Medicare Part D (prescription drug plan) costs, it is important to note that certain Medicare Savings Programs (MSPs) can cover Part B premiums. Individuals who receive state assistance with Part B premiums through an MSP automatically qualify for Extra Help, thereby receiving this additional benefit. This program significantly reduces out-of-pocket expenses related to prescription drugs.

For those who qualify, Extra Help covers monthly Part D premiums, annual deductibles, and co-payments or co-insurance. In 2025, most beneficiaries will pay no Part D premium and no annual deductible. Prescription co-payments are reduced to no more than $4.90 for generic drugs and $12.15 for brand-name drugs. Once total drug costs reach $2,000 in a year, those with Extra Help will pay nothing for covered drugs for the remainder of the year.

Applying for Extra Help

Individuals who believe they meet the income and resource requirements can apply for Extra Help through the Social Security Administration (SSA). The application process involves completing Form SSA-1020, “Application for Extra Help with Medicare Prescription Drug Plan Costs.” This form is available online via the SSA website, by calling Social Security, or by visiting a local SSA office.

Applicants must provide personal details and financial information. This includes all income sources, such as Social Security benefits, pensions, wages, and interest earnings. Information regarding resources like bank account balances, investments, and retirement account values is also required. The SSA reviews the application and sends a notification letter detailing the eligibility decision. If approved, the SSA shares this information with Medicare to ensure benefits are applied to the individual’s prescription drug plan and other covered costs.