Are You Missing Out on the Medicare Extra Help Prescription Drug Program?

A couple organize their pills for the week.
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Millions of Americans are eligible for a Medicare prescription drug savings program but aren’t signed up.

You might be one of them.

Extra Help is a federal assistance program for people with low incomes that helps pay some, if not all, of a Medicare beneficiary’s out-of-pocket drug costs.

It’s estimated to save enrollees about $5,300 per year on drug plan premiums, annual deductibles and prescription copayments.

Starting in 2024, the income threshold for the full Extra Help benefit will experience a modest increase.

Currently, the income threshold for full benefits is 135% of the federal poverty guideline ($19,683 for a single person in 2023). Starting in January 2024, the income threshold for full benefits increases to 150% of the federal poverty level ($21,870 for a single person in 2023).

An estimated 300,000 people who already receive partial Extra Help benefits will soon enjoy full benefits thanks to this expansion, according to a June 12 release from the Department of Health and Human Services.

Need a refresher on Medicare? Check out these frequently asked questions on how Medicare works

What Is Extra Help?

Extra Help is a prescription drug assistance program for Medicare beneficiaries with limited incomes and resources. It’s administered by the Social Security Administration.

About 13 million Medicare beneficiaries are currently enrolled in Extra Help.

Another nearly 1.8 million Medicare beneficiaries were eligible for the full Extra Help program in 2021 but weren’t enrolled, according to HHS data.

The provision to expand Extra Help eligibility was included in the Inflation Reduction Act, a sweeping piece of legislation passed in August 2022.

The law also gives Medicare the power to directly negotiate prices for some of the program’s costliest drugs, cap insulin copays to $35 and limit out-of-pocket beneficiary drug costs to $2,000 a year.

Trying to save money on everything Medicare doesn’t cover, like eyeglasses, hearing aids or dental work? Our money-saving Medicare guides have you covered.

How to Qualify for Extra Help

To qualify for Extra Help, your annual income must be limited to:

  • $21,870  for an individual or
  • $29,580 for a married couple living together.

Some cash payments aren’t counted as income for Extra Help, including SNAP benefits (food stamps), housing assistance, home energy assistance, earned income tax credit payments or scholarships and education grants.

Even if your income is higher, you may still be able to get some help, according to the Social Security Administration, particularly if you support other family members who live with you, have earnings from work,or you live in Alaska or Hawaii.

In 2022, your resources can’t exceed $16,660 for a single person or $33,240 for a married couple to qualify for Extra Help.

However, many assets don’t count, including your primary home, your vehicle, your personal possessions and life insurance policies.

How to Apply for Medicare Extra Help

You can complete the Extra Help application online or by calling the SSA at 1-800-772-1213.

If you qualify for full Extra Help benefits, you’ll pay no more than $4.15 for each generic prescription and no more than $10.35 for each brand-name drug. There are also no deductibles and premiums.

If you qualify for partial Extra Help benefits, you’ll pay no more than 15% of the cost for each covered drug.

Outreach Efforts Expand to Get More People Enrolled

The SSA has already sent letters to 1.2 million Medicare enrollees who may be eligible for Extra Help and Medicare Savings Programs with information on how to enroll.

To get even more eligible seniors and people with disabilities enrolled in Medicare Part D Extra Help, the federal government is stepping up education and outreach efforts in a few key ways.

  1. Provide better enrollment data and technical assistance to the State Health Insurance Assistance Program, a nonprofit resource of trained volunteers.
  2. Launch an outreach toolkit for beneficiary advocates and community-based organizations to raise awareness of the Extra Help program and how to enroll.
  3. Include information about Extra Help in the Medicare & You handbook.
  4. Remind people with Medicare about Extra Help through emails and social media.
  5. Train 1-800-MEDICARE call center representatives to provide callers with information on Extra Help.

If you qualify for Extra Help, you may also qualify for a Medicare Savings Program. These programs can help cover other Medicare health care costs, including your Part B premium.

Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder. She focuses on Medicare, retirement, investing and taxes.