The Low Income Subsidy, commonly called “Extra Help,” is a federal Medicare program that pays for some or most of your prescription drug costs under Part D. It covers premiums, deductibles, and copays for people with limited income and savings. Since January 2024, the program has been expanded to reach more people, with full benefits now available to anyone with income up to 150% of the federal poverty level who meets the asset requirements.
What Extra Help Covers
Medicare Part D is the piece of Medicare that pays for prescription drugs, but it still comes with out-of-pocket costs: a monthly premium, an annual deductible, and copays every time you fill a prescription. Extra Help reduces or eliminates all of these. It also waives the Part D late enrollment penalty, which normally applies if you didn’t sign up for drug coverage when you were first eligible.
How much you pay at the pharmacy depends on your income level. If you have full Medicaid coverage and your monthly income is below $1,350, copays drop to $1.60 for generic drugs and $4.90 for brand-name drugs. Once your total out-of-pocket spending hits $2,100, your copays go to zero for the rest of the year. If your income is above $1,350, copays are $5.10 for generics and $12.65 for brand-name drugs.
One important detail: you always pay the lower of the Extra Help copay or your plan’s regular copay. If your Part D plan charges $1.25 for a generic and your Extra Help copay would be $5.10, you pay the $1.25. The subsidy sets a ceiling on what you owe, not a floor.
The 2024 Expansion Under the Inflation Reduction Act
Before 2024, people with incomes between 135% and 150% of the federal poverty level only qualified for partial Extra Help, which meant higher copays and less premium assistance. Section 11404 of the Inflation Reduction Act changed that. Starting January 1, 2024, everyone who qualifies for Extra Help now receives the full subsidy. The old “partial” category was eliminated entirely, so no new applicants receive a reduced benefit level.
This means tens of thousands of people who previously had partial coverage now pay the same low copays as those with full benefits. If you applied before 2024 and were told you only qualified for partial help, your benefits were automatically upgraded.
Income and Asset Limits
Eligibility is based on two things: your income and your countable resources (savings, investments, and similar assets). For 2025, the resource limits are $16,100 for individuals and $32,130 for married couples. In 2026, those limits rise slightly to $16,590 and $33,100. If you’ve set aside money specifically for burial expenses and notify Social Security, the limits are higher: $17,600 for individuals and $35,130 for couples in 2025, rising to $18,090 and $36,100 in 2026.
Your home does not count toward the resource limit. Neither does one vehicle, personal belongings, or life insurance policies. What does count: bank accounts, stocks, bonds, mutual funds, IRAs, and any cash you have on hand. Income limits are tied to the federal poverty level and are updated each year after the new poverty guidelines are released.
Who Qualifies Automatically
Many people never need to apply. You receive Extra Help automatically if you fall into any of these groups:
- Dual eligibles: People who have both Medicare and full Medicaid coverage.
- Medicare Savings Program enrollees: If your state helps pay your Part B premiums through QMB, SLMB, or QI programs, you’re automatically enrolled in Extra Help as well.
- SSI recipients: Anyone receiving Supplemental Security Income from Social Security.
If you qualify through any of these pathways, Medicare will mail you a purple notice called a “Deemed Status Notice” confirming your Extra Help enrollment. You don’t need to fill out a separate application.
How to Apply If You’re Not Automatically Enrolled
If you think you qualify but haven’t received that purple notice, you can apply directly through Social Security. There are three ways to do it: complete the application online at ssa.gov, fill out the paper form (SSA-1020) and mail it in, or call Social Security at 1-800-772-1213 for help completing it over the phone. The TTY number is 1-800-325-0778.
The application asks about your income, savings, and living situation. Social Security reviews the information and sends you a decision. If you’re approved, you can enroll in or switch Part D plans at any time, not just during the annual open enrollment period. This special enrollment right makes it easier to find a plan that covers the specific medications you need.
How Extra Help Relates to Medicare Savings Programs
These two programs overlap but aren’t the same thing. Extra Help is a federal program run by Social Security that specifically targets Part D prescription drug costs. Medicare Savings Programs are state-run programs funded through Medicaid that help pay broader Medicare costs like Part A and Part B premiums, deductibles, and coinsurance.
The practical connection: enrolling in most Medicare Savings Programs (QMB, SLMB, or QI) automatically qualifies you for Extra Help without a separate application. The one exception is QDWI, which only covers Part A premiums and does not trigger automatic Extra Help enrollment. If you’re already getting help from your state with Medicare costs, there’s a good chance you’re receiving Extra Help too, even if you didn’t realize it.
For people who need help with both drug costs and other Medicare expenses, applying for a Medicare Savings Program through your state Medicaid office can effectively unlock both programs at once.