Americans of all ages spend over $1,200.00 on average for prescription drugs every year. But the elderly, and people with chronic conditions, spend even more than the national average for their medications.
United States statistics show that 87 percent of the people who are between the ages of 65 and 70 take an average of 20 prescription medications per year. For people over 80 the numbers go up to 91 percent taking 22 prescriptions every year. Even more shocking is the fact that 72 percent of people taking prescription medications have an annual income of less than $20,000.00. These statistics show that paying out-of-pocket for prescription medications is difficult for a great majority of people in this country.
If you have Medicare benefits you are eligible to enroll in a prescription drug (Part D) plan. And, if you have limited resources and a low income, you may qualify for Medicare’s Extra Help program. Extra Help works in tandem with your prescription drug plan and is estimated to be worth around $5,000.00 per year. This federal program, also called the Part D Low-Income Subsidy (LIS) assists beneficiaries with their plan’s monthly premiums, annual deductibles, and prescription copayments. Here are the details about who is eligible for the Extra Help program.
Are you eligible for the Extra Help program?
You may qualify for Extra Help if you meet the resource and income limits set by the Social Security Administration.
Your resources must not surpass $14,610.00 as an individual, or $29,160.00 as a married couple still living together. Examples of resources that are included in this limit are as follows:
• Real estate holdings that do not include your primary residence
• Bank accounts such as savings, checking, and certificates of deposit
• Stocks, bonds (including U.S. savings bonds), and mutual funds
• IRAs
• Cash
Resources that are not included in the set resource limit include:
• Your primary residence
• Personal possessions
• Vehicles registered to your or your spouse.
• Jewelry, home furnishings, and other items that cannot be converted to cash easily.
• Property used for self-support such as rental properties or farmland used to produce food for your consumption.
• Non-business property you need for self-support.
• Life-insurance policies
• Money you have set aside for burial expenses and any interest made on that money.
Your annual income limit should not exceed $19,140.00 as an individual, or $25,860.00 as a married couple still living together.
Although the above amounts are income limits, you may still qualify if your income exceeds these amounts in the following instances:
• You or your spouse support other family members who reside with you.
• You or your spouse have earnings from employment.
• You live in Hawaii or Alaska.
The Social Security Administration does not include the following as income:
• Money received from assistance programs such as Supplemental Nutrition, housing, home energy, disaster relief, or medical treatment and drugs
• Earned income tax credit
• Outside assistance to help pay expenses
• Victim compensation
• Scholarships or education grants
How and when do you apply for the Extra Help program?
To apply for the Part D Low-Income Subsidy (Extra Help) program, you must fill out Social Security’s Application for Extra Help with Medicare Drug Plan Costs form (SSA-1020). You can get this form either online, by calling the Social Security Administration at 1-800-772-1213, or in person at a local Social Security office. You must report your savings, investments, real estate, and annual income to the Social Security Administration, so be prepared with these numbers and documents. If you are married, or if members of your family are involved, you may need information from them also.
The Social Security Administration reviews your application and lets you know by letter whether you qualify or not. If you do, you must then choose a prescription drug plan to enroll in through your Medicare benefits. If you do not choose one, the Centers for Medicare & Medicaid Services (CMS) choose a plan for you.
The Social Security Administration reviews your eligibility status every year, generally at the end of August. They send you an official form in the mail. You must fill it out and return it to them within 30 days. If there are any adjustments to your Extra Help subsidy, they go into effect the following January. Adjustments that can be made are an increase, or a decrease in the amount of money, or termination of the subsidy. You have the right to appeal to the Social Security Administration if you do not agree with their decision.
You can contact the Social Security Administration by phoning them, visiting a local office, or checking the website if you have any questions about more income exclusions or other eligibility requirements for the Extra Help program.
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