If you’re reading this, you might have already done a bit of research on Medicare Part D. As you may or may not know, Medicare Part D is a federally regulated prescription drug program operated through private insurance providers. These insurance providers offer regulated prescription drug insurance products to Medicare beneficiaries. The low-income subsidy, otherwise known as Extra Help, can help pay some of the costs associated with the Medicare Part D prescription drug insurance policies, out-of-pocket expenses. The expenses the subsidy helps with are the cost-sharing portion that Medicare Part D policyholders would be responsible for paying. Extra Help is offered as a government subsidy for those who qualify. Read on to learn a bit more about how you are eligible for the low-income subsidy, how to apply for the subsidy, and what the requirements you need to satisfy, to be able to receive this beneficial assistance.
How the Low-Income Subsidy Assists with Prescription Drug Expenses
The costs that the low-income subsidy helps with are the cost-sharing responsibilities associated with a Medicare Part D insurance policy. The low-income subsidy helps with out-of-pocket expenses that the Part D policyholder would otherwise be responsible for paying. According to the specific Medicare Part D coverage that the policyholder signed up for, these out-of-pocket cost-sharing responsibilities are according to the current year. The prices and out-of-pocket cost-sharing structure are specified each year according to the formulary and the particular policy’s cost-sharing configuration.
The low-income subsidy program helps with Medicare Part D cost-sharing for the out-of-pocket costs the policyholder would otherwise be responsible for, such as deductibles, premiums, copayments, and other prescription drug costs. The subsidy will also eliminate the Coverage Gap (Donut Hole), and the Late Enrollment Penalty for individuals subjected to these potentially costly Medicare Part D rules, which can help out in cost savings. For example, last year, those who got the full low-income subsidy did not pay more than $3.70 for a covered generic prescription or $9.20 for a covered brand-name medication. Extra Help coverage, according to the Social Security Administration, is valued around $4,900 a year to the individual who qualifies for the full subsidy. This number is based on the level of subsidy that a person qualifies to receive. Those that are eligible get either “full” or “partial” extra Help. The amount of subsidy assistance you might receive varies depending on your income and asset levels.
Eligibility for Low-Income Subsidy
Eligibility for the low-income subsidy is based on your household’s asset and income levels, and the requirements usually change from year to year. Here are the requirements to be eligible for Extra Help in 2020:
– Currently be enrolled in Medicare Parts A and/or B
– Have an annual income of about $19,140 or less (for individuals) or $25,860 or less (for married couples who live together).
– Have any resources totaling $26,160 or less (for married couples who live together) or $13,110 or less (for individuals). Keeping in mind these limits are the higher end of the subsidy requirements spectrum. If an individual is applying and their income and assets are close to these levels, they may only qualify for partial extra Help.
Types of Income that Affect Low-Income Subsidy Eligibility
Certain types of income and resources will determine if you are eligible for the low-income subsidy. Resources that are counted are:
– Savings Accounts
– Checking Accounts
– Bonds and Stocks
– Real Estate Investments Beyond Your House
Resources that aren’t counted are:
– The value of one house
– The value of one vehicle
– Burial plot
– Burial expenses (up to $1,500 if you have set aside money for that reason)
– Personal belongings
– Furniture or other household items
– Life insurance policy
What if my Income and Resources Exceed the Limits for the Low-Income Subsidy?
Even if your yearly income and foreseeable resources exceed the limits listed, you might still be eligible for the low-income subsidy in certain situations. The following circumstances are taken into consideration when trying to determine your eligibility for the low-income subsidy:
– You have earnings from work
– You financially support other family members that live with you
If your income and resource levels exceed the eligibility limits, and one of the above situations applies to you, it may still be worth applying, to be safe.
Applying for the Subsidy
If you do qualify for the low-income subsidy (Extra Help), you will have to apply for the benefit. Enrolling in the benefit is not automatic and will require an application. Applying for the social security low-income subsidy (Extra Help) can be done a few different ways:
-Through the Social Security Administration website
-Calling the Social Security Administration at 1-800-772-1213
-Going into your local Social Security office, and then applying through an agent
To continue eligibility from year to year, the Social Security Administration will require you to recertify each year to continue receiving your subsidy benefit. This is usually an easy process and is done by the Social Security Administration sending a recertification document to the address that is on record. To continue your subsidy in the following year, you will need to fill out this document and send it back to the Social Security Administration.
Automatic Enrollment into a Medicare Part D Plan
If you qualify for Extra Help but do not enroll in a Medicare prescription drug program yourself, Medicare will enroll you in a program, so that you will get assistance paying for your prescription drugs. (Medicare will then send you a letter telling you when your coverage begins.) If you want to change the Medicare prescription drug plan, you can do so with a Special Election Period (SEP). Keep in mind that the plan that Medicare chooses for you might not have as many benefits as a plan you can find. So always make sure you are enrolling in the most suitable plan for your unique and individual lifestyle and situation. Give Healthcare American a call to help you enroll in an appropriate plan.
For help understanding this subsidy, help applying for the subsidy, or any other concerns regarding Medicare Part D or the low-income subsidy, give Healthcare American a call today!
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