Prescription drugs can be extremely expensive, and if you have more than one prescription to take or you take medications daily, the costs can be even greater. Medicare offers Part D to help lower the out-of-pocket costs of prescription drugs. Part D coverage can complement Original Medicare or be included in a Medicare Advantage plan.
However, even with Part D coverage, the out-of-pocket costs can still be quite high depending on your specific situation and the prescriptions you need to take. If you have limited income and resources and are struggling to pay your Medicare Part D premiums, copayments, and deductibles, Medicare’s Extra Help program may help cover associated Medicare coverage costs.
What is Extra Help?
The Extra Help program can reduce the costs of your Medicare coverage by covering your Medicare Part D premium payment up to the state-specific benchmark amount. In addition, Extra Help limits the maximum amount that a prescription can cost you. For 2020, these costs are $3.60 for generic medications and $8.95 for brand name medications.
It is also important to be aware that Extra Help only applies to the Part D coverage. For most people, Part D must be applied for during your Initial Enrollment Period for Original Medicare. However, if you qualify for Extra Help but do not currently have a Part D plan, you are eligible to enroll for Part D using a Special Enrollment Period.
This Special Enrollment Period can occur once per calendar year during one of the first three quarters of the year. During this time, you can enroll in Medicare Part D. Extra Help will eliminate any associated Part D late enrollment penalties, as well.
What are the qualification requirements for Extra Help?
You do not need to apply for Extra Help if you are currently receiving Medicaid services or receive Supplemental Security Income. In addition, being a part of a Medicare Savings Program will also automatically qualify you for Extra Help.
The main qualification for Extra Help relates to income. For 2020, the annual income level is set to $19,140 for individuals and $25,860 for couples. In addition, your total assets must be lower than $14,610 for individuals and $29,160 for couples. These total assets include money in a checking or savings account or invested in stocks or bonds.
When the Social Security Administration calculates your income, they will also subtract an extra $20 from any of your unearned income, which can include retirement income for example. Depending on the exact values of your income and assets, you may qualify for full or partial assistance.
Applying for Extra Help
When you apply for the Extra Help program through the Social Security Administration, the application will also serve as a screening process for the Medicare Savings Program. This program can further reduce your Medicare-associated costs. Because of this, it is important to complete the entire application and to ensure all your information is accurate.
You may receive one of several notices from Medicare that alerts you to your qualification. These may include a purple notice indicating automatic qualification, a yellow or green notice for automatic enrollment, or a “Notice of Award” for Extra Help from the Social Security Administration.
Even if you qualify for the Extra Help program this year, it is not guaranteed that you will qualify again the following year. If your income or assets change in value, it may cause you to no longer qualify. If this is the case, you will receive a gray-colored notice by the end of September to notify you. If your level of assistance will be changed, you will receive an orange notice noting that your copayment for the following year has been changed.