While Medicare open enrollment deadlines just passed, it’s not too late to help patients get the most out of their insurance coverage. One impactful way to assist qualifying Medicare patients in optimizing their insurance: Let them know about the Low-Income Subsidy (LIS), also known as “Extra Help.”
Understanding the Extra Help program, including what it is, who is eligible, and what kind of savings it offers, can help financial navigators make sure patients are maximizing their Medicare coverage.
What is the Extra Help program?
As the name implies, Extra Help is a Medicare program designed to help people with limited income and resources pay Medicare prescription drug coverage (Part D) premiums, deductibles, coinsurance, and other costs.
Extra Help is not a replacement for Part D or a plan on its own, so patients still need a Part D plan to receive Extra Help assistance.
What benefits does Extra Help offer?
In 2024, patients who get Extra Help pay no premium if they have a basic Part D drug plan with a premium at or below the Extra Help premium limit, nor do they pay a deductible.
Drug copays with Extra Help in 2024 are no more than $4.50 for generic drugs and no more than $11.20 for brand names. Once total drug costs (including the amount paid by the patient and by their plan) reach $8,000, patients pay $0 for each covered drug.
Another financial benefit is that patients who get Extra Help aren’t required to pay a Part D penalty for late enrollment. This penalty is 1% of the national base premium times the number of full, uncovered months the patient did not have Medicare Part D or creditable coverage. Currently, the monthly penalty is 35 cents, but this can add up the longer someone goes without coverage.
Patients don’t have to pay the Part D penalty while they get Extra Help; if they had a penalty before getting Extra Help, the penalty goes away.
Yet another major benefit of Extra Help is that it gives patients a Special Enrollment Period (SEP) once per calendar quarter during the first nine months of the year to enroll in a Part D plan or to switch between plans. During this SEP, patients can change their Part D plan or even enroll in a Medicare Advantage plan. (The SEP isn’t an option October through December because patients can use Fall Open Enrollment during this time to make prescription drug coverage changes.)
Who is eligible for this program?
Some patients automatically qualify for Extra Help, while others have to apply. People automatically get Extra Help if they also receive:
- Full coverage through Medicaid
- Help paying Part B premiums from a state-run Medicare Savings Program
- Supplemental Security Income (SSI) benefits
What’s new for this year?
The new year has brought some changes to the Extra Help program. Starting in 2024, income eligibility has increased to 150% of the federal poverty level (FPL). And while some patients were only eligible for partial Extra Help in the past, all qualifying patients now receive full program benefits.
In 2024, people with a monthly income under $1,843 ($2,485 for couples) and assets valued at less than $17,220 ($34,360 for couples) are eligible to apply for Extra Help.
For this program, “assets” means combined savings, investments, and real estate—not a patient’s home, vehicles, personal possessions, life insurance, burial plots, irrevocable burial contracts or back payments from Social Security or SSI.
Even if a patient doesn’t qualify for Extra Help now, they can reapply at any time if their income and resources change.
How do patients apply?
Patients enrolled in a Part D plan who don’t automatically qualify for Extra Help but meet the eligibility requirements based on income and assets can complete a secure application online. Those with questions about the application process can call Social Security toll-free at 1.800.772.1213 (TTY 1.800.325.0778).
Patients can apply for Extra Help and Medicare Savings Programs (MSPs), which provide help with other Medicare costs, at the same time. Social Security will send information to the patient’s state to initiate an MSP application unless the patient tells them not to on the Extra Help application.
Once patients complete the application, they typically receive their determination within four to six weeks.
Patients who had Extra Help before should get a letter every year telling them whether there are any changes to their program, or if they need to reapply.
How can financial navigators help patients take full advantage of this program?
Once navigators have an understanding of how the Extra Help program works, they can take steps to ensure they’re taking full advantage of it. These steps include:
- Exploring Extra Help before they look at financial assistance (such as foundation grants). Insurance optimization should always be the first step in financial navigation.
- Routinely screening Medicare patients (and those who are turning 65) for eligibility, since patients can be enrolled in Extra Help throughout the year.
Optimizing insurance with Extra Help
Medicare open enrollment deadlines have come and gone, but Extra Help is available year-round for qualifying Medicare patients. By exploring this option, financial navigators can help patients optimize their insurance and better afford the medications they need.