LIS stands for Low-Income Subsidy, a Medicare program that helps people with limited income and resources pay for prescription drug coverage under Part D. You might also hear it called “Extra Help,” which is the program’s informal name used by the Social Security Administration. If you qualify, LIS can dramatically reduce what you pay for premiums, deductibles, and copayments on your medications.
What LIS Covers
LIS specifically targets the costs of Medicare Part D, which is the prescription drug portion of Medicare. Without help, Part D can involve a monthly premium, an annual deductible, and copayments every time you fill a prescription. LIS reduces or eliminates all of these.
In 2025, people who receive the full LIS benefit pay no more than $4.90 for each generic drug and $12.15 for each brand-name drug. That’s it. No deductible, and in many cases no monthly premium either, as long as you’re enrolled in a plan that charges at or below the benchmark amount in your area. For context, without LIS, Part D copays and coinsurance can run significantly higher, especially for brand-name and specialty medications.
Who Qualifies
Eligibility is based on two things: your income and your countable resources (savings, investments, and similar assets). For 2025, you can qualify for the full subsidy if your countable resources are below $16,100 as a single person or $32,130 if you’re married. If you’ve set aside money specifically for burial expenses and reported that to the Social Security Administration, those limits rise to $17,600 (single) or $35,130 (married).
Your income generally needs to be at or below 150% of the federal poverty level. This is a significant change that took effect in January 2024 thanks to the Inflation Reduction Act. Before that law, people earning between 135% and 150% of the poverty level only received a partial subsidy with higher copays and less generous coverage. Now, everyone who qualifies gets the full benefit. CMS estimates this expansion improved coverage for roughly 300,000 people.
What Doesn’t Count as a Resource
The resource limits can sound low, but they only apply to liquid or easily accessible assets. The Social Security Administration does not count your primary home, your personal possessions, your vehicles, or items that can’t easily be converted to cash like jewelry or home furnishings. So if you own your house and a car but have modest savings, you may still qualify.
Who Gets LIS Automatically
Some people are enrolled in LIS without ever filing an application. If you currently receive Medicaid (full benefits), Supplemental Security Income (SSI), or help from a Medicare Savings Program, you’re typically deemed eligible and enrolled automatically. You’ll receive a notice letting you know, usually in the form of a purple letter from Medicare. If you fall into one of these groups and haven’t received that notice, it’s worth calling the Social Security Administration to confirm your status.
How to Apply
If you’re not automatically enrolled, you can apply through the Social Security Administration. The application form is called the SSA-1020, and you can complete it online at ssa.gov, by phone, or in person at a local Social Security office. The form asks about your income, your savings and investment accounts, and your living situation. You don’t need to gather documentation about your home, car, or personal belongings since those aren’t counted.
Processing typically takes a few weeks. If you’re approved, the subsidy can begin as early as the following month, depending on when in the year you apply and whether you’re already enrolled in a Part D plan.
Plan Flexibility for LIS Recipients
One of the lesser-known benefits of LIS is the flexibility it gives you to switch plans. Most Medicare beneficiaries can only change their Part D plan during the annual Open Enrollment Period in the fall. LIS recipients, by contrast, get a special enrollment period that allows them to switch between standalone Part D plans once per month, year-round. This means if your current plan stops covering a medication you need, or if a better option becomes available, you’re not locked in until October.
This monthly switching ability also applies to moving from a Medicare Advantage plan back to Original Medicare with a standalone Part D plan. However, it does not allow you to hop between regular Medicare Advantage plans outside the standard enrollment windows.
No Late Enrollment Penalty
Medicare charges a permanent penalty if you go without Part D drug coverage for 63 or more consecutive days after you first become eligible. The penalty adds 1% to your premium for every month you were uncovered, and it never goes away. LIS recipients are exempt from this penalty entirely. So even if you delayed signing up for Part D for several years, qualifying for Extra Help wipes out any penalty you would otherwise owe. This alone can save hundreds of dollars a year for people who enrolled in Part D later than expected.
Partial vs. Full Subsidy
Before 2024, there were two tiers of LIS. People with the lowest incomes and fewest resources received the full subsidy with the smallest copays and no premiums or deductibles. A second group, those earning slightly more (between 135% and 150% of the federal poverty level), received only a partial subsidy with higher cost-sharing. The Inflation Reduction Act eliminated that partial tier. Starting in 2024, everyone who meets the eligibility criteria receives the full benefit. If you previously had the partial subsidy, your costs dropped automatically at the start of 2024 with no action required on your part.