Are all of Your Drugs Covered? Find out if you Qualify for Medicare Extra Help.
Understanding "Extra Help" and Medicare Savings Programs
Medicare Extra Help for Prescription Drugs
Have you heard of LIS (Low Income Subsidies)? You may have heard it called “Extra Help.” It’s a federal program that helps seniors and Medicare eligibles save money on their prescription drugs, and thousands of eligible people don’t even know about it!
The SSA says that people with LIS can save almost $5,000 per year on prescription drugs. When you're in the program, you won't pay more than $3.40 for covered generic drugs, and $8.50 for covered brand-name drugs. Are you eligible?
What does Medicare Extra Help Cover?
The Medicare Extra Help Program, or LIS, helps cover your prescription drug premiums, deductibles, coinsurance, and co-payments, and can eliminate your Part D late enrollment fee (if you have one). People who waited too long to enroll in Part D may face up to a 10% premium increase, but LIS can remove that extra fee. Medicare subsidies also provide coverage in the Donut Hole.
By qualifying for LIS, you will also qualify for a Special Enrollment Period. That means that you will have the ability to make changes to your Medicare coverage once per quarter during the first three quarters of the year instead of having to wait until the Annual Enrollment Period.
What Does Medicare Extra Help Cover Inside the Medicare Donut Hole?
The Donut Hole is a coverage gap that you may face. It means (in 2019) that once you spend $3,820 on prescription drugs, you enter a coverage gap known as the Donut Hole. While you’re in that gap, you have less coverage than you did before. You'll be responsible for 25% of your brand-name drug costs and 37% of your generic drug costs. That will end once you've spent $5,100, but that extra $1280 can be detrimental. LIS can protect you while you're in that gap.
There is a plan in place to decrease that 37% to 25% as well in 2020, which would effectivley end the donut hole. For now, enrolling in Extra Help can help reduce those costs for you.
Is Extra Help the same as a Social Security Low Income Subsidy?
Since Medicare is a federal program that provides benefits to American citizens, it operates hand-in-hand with Social Security. You may hear the Medicare Extra Help program called the "Social Security Low Income Subsidy" program.
If you already have Supplemental Security Income (SSI) or if you have both Medicare and Medicaid, you will automatically qualify for Medicare subsidies. Otherwise, to be eligible, you must have income less than $1,040.83 per month if you're single, or less than $1,409.17/month if you're married, and:
Have Medicare Part A (hospital coverage) and Part B (medical coverage)
Have some form of prescription drug coverage (either Medicare Part D or Medicare Advantage with prescription drug benefits)
Be an American citizen
Not have savings, investments, and real estate valuing more than $28,150 if you are married or $14,100 if you are single
If you don't qualify for Extra Help now but think you might qualify soon, you can always re-apply at any time. It's common for people to qualify later in life by experincing a change in resources. Resources can include money in savings, stocks, IRAs, and bonds. For example, you might qualify in a few years if your income stays the same but your savings account decreases to below the LIS limits.
Each year, certain Medicare participants will receive a letter from the Centers for Medicare and Medicaid Services (CMS). Some of these letters can directly affect your benefits, so it’s important to open them and respond immediately if required.
Purple: You automatically qualify for Medicare Extra Help because you receive Medicare and Medicaid, are enrolled in a Medicare Savings Program or receive SSI (Supplemental Security Income) benefits.
Green: You are automatically enrolled in a Medicare Low Income Subsidy program because you receive SSI (Supplemental Security Income) benefits, are enrolled in a Medicare Savings Program or you applied for Medicare Extra Help yourself.
Yellow: You qualify for Medicare and Medicaid and are enrolled in Original Medicare. Medicare will enroll you in a prescription drug plan unless you purchase your own plan or choose to decline.
Orange: You still qualify, but your copayments will change next year.
Gray: You no longer qualify but are encouraged to apply for the following year.
Call Social Security at 1-800-772-1213 (TTY 1-800-325-0778)
Visit your local Social Security Office
If you apply for LIS online, you don't have to complete the application at one time. You can save your application and come back later. You will receive a "reentry" number to access your application later.
Social Security reccomends that you do not use your browser's back button to go back in your application. Instead, move the "continue" and "previous" buttons on your screen.
Be careful, because there is a time limit on each page. You will have 25 minutes to complete each page. After that, you will recieve a pop-up asking if you need more time. You can extend your time three times, but after that, your time will run out.
What you Need for Your LIS Application
To complete your application, you may need to gather some paperwork. Locate:
Current bank account statements
Credit union or other financial institution statements
Proof of investments, stocks, or bonds
Life insurance or final expense insurance policies
Other proof of citizenship and identity
If you receive Medicaid, are a part of a Medicare Savings Program, or have any other government benefits (like Social Security), you may need proof of that as well.
If you were automatically enrolled in Extra Help due to your Medicaid, SSI, or Medicare Savings Progrma benefits, and you still have those benefits, you will not have to re-enroll each year. If you applied by yourself because you do not have Medicaid, SSI, or an MSP but still qualify, you may have to re-apply. You will recieve a notice in the mail sometime in the fall season explaining that your Extra Help benefits will end on December 31. To keep your Extra Help, you'll have to complete the attached application and send it back before the deadline (or re-apply online).
Not sure if you’re eligible? Give us a call and we may be able to help. We can find an agent in your area to help you fill out your application (at no cost to you) and answer all your questions about Medicare and prescription drug coverage.
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