Medicare Extra Help: Do You Qualify for the Low-Income Subsidy?

Millions of people on Medicare struggle to afford their prescription medications. Even with Part D coverage, the monthly premiums, annual deductible, and copays at the pharmacy counter can strain a fixed income. What many beneficiaries do not realize is that a federal program called Extra Help — officially known as the Low-Income Subsidy — can pay for most or all of those costs. An estimated 2 million people who qualify for Extra Help have never applied.

This guide explains what Extra Help is, who qualifies under the expanded 2026 income and resource limits, what the subsidy covers, how it interacts with the Part D prescription drug benefit and the $2,000 out-of-pocket cap, and how to apply. If you or someone you know is on Medicare and has limited income, understanding Extra Help could save thousands of dollars each year on Medicare costs.

What Is Medicare Extra Help (Low-Income Subsidy)?

Extra Help is a federal program administered by the Social Security Administration (SSA) and the Centers for Medicare & Medicaid Services (CMS) that helps people with limited income and resources pay for Medicare Part D prescription drug coverage. The program is also referred to as the Low-Income Subsidy, or LIS.

Extra Help is worth an estimated $5,000 or more per year for those who qualify. The subsidy can cover your Part D monthly premium, annual deductible, and the copayments or coinsurance you would normally owe each time you fill a prescription. For beneficiaries who take multiple medications — especially costly brand-name or specialty drugs — the savings can be life-changing.

The program has existed since Medicare Part D launched in 2006, but significant changes under the Inflation Reduction Act (IRA) of 2022 expanded eligibility and improved benefits starting in 2024. Previously, there were two distinct levels of the subsidy — full and partial — with meaningfully different benefits. Under the IRA, the income threshold for full Extra Help was raised from 135% to 150% of the federal poverty level, and the partial subsidy category was effectively upgraded so that nearly everyone who qualifies now receives the full benefit.

What Does Extra Help Cover?

If you qualify for full Extra Help in 2026, the subsidy pays for the following:

• Part D monthly premium: Covered in full as long as the plan's premium is at or below the regional benchmark amount. If you choose a plan with a higher premium, you pay the difference.
• Annual deductible: Eliminated entirely. You do not pay any deductible before your plan starts covering prescriptions.
• Copayments: Reduced to small amounts. In 2026, you pay no more than approximately $4.50 for generic drugs and $11.20 for brand-name drugs. Some beneficiaries — particularly those on full Medicaid or SSI — pay $0 copays.
• Late enrollment penalty: Waived. Even if you delayed enrolling in Part D, you will not owe the penalty while you have Extra Help.

Extra Help also grants you a Special Enrollment Period, meaning you can enroll in or switch Part D plans outside of the standard Annual Enrollment Period. Specifically, you can change plans once per calendar quarter during the first nine months of the year (January through September), in addition to the regular Annual Enrollment Period from October 15 through December 7.

Who Qualifies for Extra Help in 2026?

To qualify for Extra Help, you must be enrolled in Medicare Part A or Part B and meet both income and resource limits. The Inflation Reduction Act expanded the income threshold significantly, making more people eligible than ever before.

2026 Income Limits

Your annual income must be at or below 150% of the federal poverty level (FPL). For 2026, the approximate limits are:

• Individual: $22,590 per year
• Married couple living together: $30,660 per year

Income includes wages, Social Security benefits, pensions, and most other sources. However, the calculation does not count every dollar the same way — Social Security uses specific rules that exclude certain types of income and may apply disregards. If your income is close to the limit, it is worth applying because you may still qualify after the adjustments are made.

Before the Inflation Reduction Act, the full Extra Help subsidy was available only to those at or below 135% of the FPL, and the partial subsidy — which still required a deductible and higher copays — covered people between 135% and 150% of the FPL. The IRA eliminated this gap by extending full benefits to everyone at or below 150% of the FPL, adding approximately 300,000 more people to the full-benefit tier.

2026 Resource Limits

In addition to meeting the income test, your countable resources must be at or below these thresholds:

• Individual: $17,220
• Married couple living together: $34,360

Countable resources include money in checking and savings accounts, stocks, bonds, mutual funds, certificates of deposit, and individual retirement accounts. Resources that are excluded from the calculation include your primary home and the land it sits on, one automobile, personal possessions like furniture and clothing, burial plots for you and your immediate family, up to $1,500 per person set aside for burial expenses, and life insurance policies.

Who Automatically Qualifies for Extra Help?

Certain groups are automatically deemed eligible for full Extra Help without needing to submit an application. If you fall into one of the following categories, you are already enrolled or will be enrolled automatically:

• Full Medicaid (dual eligible): If you receive full Medicaid benefits alongside Medicare, you automatically qualify for full Extra Help. You do not need to apply separately.
• Supplemental Security Income (SSI): If you receive SSI benefits, you are automatically enrolled in Extra Help. This includes people who receive both SSI and Social Security retirement or disability benefits.
• Medicare Savings Programs (MSP): If you are enrolled in a Medicare Savings Program — such as the Qualified Medicare Beneficiary (QMB), Specified Low-Income Medicare Beneficiary (SLMB), or Qualifying Individual (QI) program — you automatically qualify for Extra Help. These state-run programs help pay Medicare premiums and, in the case of QMB, deductibles and coinsurance as well.

If you are automatically qualified, Medicare will assign you to a Part D plan if you have not already enrolled in one. You have the right to switch to a different plan at any time using your Special Enrollment Period. CMS sends a notice each fall identifying the benchmark plans available in your area for the coming year.

How to Apply for Extra Help

If you are not automatically eligible, you can apply for Extra Help in several ways. The application is free, and there is no downside to applying — even if you are denied, it will not affect your existing benefits.

Apply Online Through the Social Security Administration

The fastest way to apply is online at ssa.gov/medicare/part-d-extra-help. The online application takes approximately 15 to 20 minutes. You will need information about your income sources, bank account balances, investments, and any life insurance policies. You do not need to provide documentation at the time of the application — Social Security will verify the information and may contact you later if they need supporting documents.

Apply by Phone

You can call the Social Security Administration at 1-800-772-1213 (TTY 1-800-325-0778) to apply by phone. Representatives are available Monday through Friday, 8:00 a.m. to 7:00 p.m. local time. A representative will walk you through the application and answer questions. Wait times can be long, so calling early in the day or later in the week is recommended.

Apply in Person or by Mail

You can visit your local Social Security office to apply in person. You can also download and print SSA Form SSA-1020, complete it by hand, and mail it to your local Social Security office. Additionally, your State Health Insurance Assistance Program (SHIP) can help you complete the application at no charge.

Apply Through Your State Medicaid Office

You can also apply for Extra Help by contacting your state Medicaid office. When you apply for Medicaid or a Medicare Savings Program, your state will assess whether you qualify for Extra Help as part of the same process. If you are applying for both a Medicare Savings Program and Extra Help, coordinating through your state office can save time.

After you submit your application, Social Security typically processes it within a few weeks. You will receive a letter notifying you of the decision. If approved, your Extra Help benefits begin the month after your approval. If denied, the letter will explain why, and you have the right to appeal the decision.

Full Extra Help vs. Partial Extra Help: What Changed Under the Inflation Reduction Act

Before 2024, Extra Help had two tiers that offered meaningfully different levels of assistance. Understanding the historical distinction helps explain why the Inflation Reduction Act's changes are so significant.

Under the old rules, full Extra Help was available to individuals with income at or below 135% of the FPL. These beneficiaries paid no deductible, no premium for benchmark plans, and only nominal copays. Partial Extra Help applied to those with income between 135% and 150% of the FPL. These beneficiaries still received significant assistance, but they paid a reduced deductible (roughly $118 in 2024), a sliding-scale premium subsidy, and higher copays of 15% of the cost of each drug.

The Inflation Reduction Act eliminated the partial subsidy tier effective January 1, 2024. Now, everyone who qualifies for Extra Help at any level — up to 150% of the FPL — receives the full subsidy. This means no deductible, full premium coverage for benchmark plans, and the same low copays that were previously reserved for the lowest-income beneficiaries. For the approximately 300,000 people who had been receiving only partial Extra Help, this change saved hundreds of dollars per year immediately.

How Extra Help Interacts with the $2,000 Out-of-Pocket Cap

The Inflation Reduction Act introduced a $2,000 annual out-of-pocket cap on Part D drug costs starting in 2025. This cap means that once a beneficiary's true out-of-pocket spending on covered prescriptions reaches $2,000, they owe nothing more for the rest of the calendar year. This is a landmark protection for all Part D enrollees — but for Extra Help recipients, it functions as an additional safety net rather than a primary benefit.

Because Extra Help already eliminates the deductible and reduces copays to just a few dollars per prescription, most Extra Help recipients spend far less than $2,000 out of pocket in a year. A beneficiary filling ten prescriptions per month at the maximum copay of $11.20 each would spend approximately $1,344 annually — still well under the cap. In practical terms, Extra Help provides more generous cost protection than the $2,000 cap alone.

However, the cap serves as a backstop. If an Extra Help recipient has unusually high drug costs and their copays were to reach $2,000, all cost-sharing would stop for the remainder of the year. The two programs work together to ensure that people with limited income face minimal prescription drug costs.

Extra Help and Medicare Savings Programs: How They Work Together

Medicare Savings Programs (MSPs) are state-administered programs that help pay Medicare premiums and, in some cases, deductibles and coinsurance. There are four MSP levels: Qualified Medicare Beneficiary (QMB), Specified Low-Income Medicare Beneficiary (SLMB), Qualifying Individual (QI), and Qualified Disabled and Working Individual (QDWI). If you enroll in QMB, SLMB, or QI, you automatically qualify for full Extra Help.

This means the two programs stack. An MSP can pay your Part A and Part B premiums while Extra Help covers your Part D premiums, deductible, and copays. For someone enrolled in QMB with Extra Help, virtually all Medicare cost-sharing is eliminated — Part A premiums, Part B premiums, Part A and Part B deductibles and coinsurance, Part D premiums, the Part D deductible, and Part D copays are all covered. If you are considering applying for Extra Help, it is worth simultaneously checking your eligibility for a Medicare Savings Program through your state Medicaid office.

What Happens After You Are Approved

Once Social Security approves your Extra Help application, several things happen. Your benefits typically begin the month after approval. If you are already enrolled in a Part D plan, the subsidy is applied automatically — your plan will adjust your costs, and you should see lower copays at the pharmacy. If you are not yet enrolled in a Part D plan, you will need to choose one. Medicare may also auto-enroll you in a benchmark plan if you do not select one within a certain timeframe.

Social Security reviews your eligibility for Extra Help periodically, and you may be asked to verify your income and resources. If your financial circumstances change — for example, you receive an inheritance that pushes your resources above the limit — you must report the change. If you lose eligibility, you will be notified and given a chance to transition to a plan without the subsidy. You can reapply for Extra Help at any time if your financial situation changes again.

Common Reasons People Miss Out on Extra Help

Despite being worth thousands of dollars per year, Extra Help is significantly underutilized. An estimated 2 million eligible Medicare beneficiaries are not enrolled. Several common reasons explain why:

• Lack of awareness: Many people simply do not know the program exists. Extra Help is not widely advertised, and beneficiaries often learn about it only through a caseworker, community organization, or healthcare provider.
• Assuming they earn too much: The expanded income limits under the Inflation Reduction Act mean that people who were previously over the threshold may now qualify. Someone earning $22,000 per year would not have qualified for full benefits before 2024 but does now.
• Confusion about resources: Some people believe owning a home or car disqualifies them. In fact, your primary residence, one vehicle, and personal belongings are all excluded from the resource calculation.
• Stigma or pride: Some beneficiaries avoid applying because they view it as accepting welfare. Extra Help is a benefit built into the Medicare program that you have earned through years of paying into the system. It is not means-tested public assistance in the traditional sense — it is a subsidy designed to make your existing Medicare drug coverage affordable.
• Application complexity: While the application is straightforward, gathering financial information can feel overwhelming. Your State Health Insurance Assistance Program (SHIP) offers free, unbiased counseling and can help you complete the application step by step.

The Bottom Line

Medicare Extra Help is one of the most valuable and underused benefits available to people on Medicare with limited income. It can eliminate your Part D premium, wipe out your deductible, reduce your copays to just a few dollars, waive the late enrollment penalty, and give you the flexibility to switch plans throughout the year. The Inflation Reduction Act made it even more generous by extending full benefits to everyone at or below 150% of the federal poverty level.

If your annual income is below approximately $22,590 as an individual or $30,660 as a married couple, and your countable resources are within the limits, you should apply. The application is free, the process takes about 20 minutes online, and there is no penalty or downside if you are not approved. You can apply at ssa.gov, call Social Security at 1-800-772-1213, or visit your local Social Security office.

If you qualify for Extra Help, also check whether you are eligible for a Medicare Savings Program to help with your Part A and Part B costs. Together, these programs can reduce or eliminate nearly all of your Medicare expenses — making it possible to get the prescription medications and healthcare services you need without financial hardship.