It is not a secret that prescription medication costs are a significant burden for many Medicare beneficiaries, even with Medicare Part D coverage. To further offset these costs, Medicare Extra Help was created as a federal assistance program to help eligible individuals with limited income and resources afford their prescription drug costs.
Medicare Extra Help was created as a federal assistance program to help eligible individuals with limited income and resources afford their prescription drug costs.
Many beneficiaries pay exorbitant fees to access their medications, even with a Medicare Part D plan.
The “donut hole” coverage gap is when the beneficiary and their plan must pay more for covered drugs than paid in the initial coverage tier before reaching the needed threshold for more coverage from the drug plan.
To qualify for Medicare Extra Help in 2023, the monthly income cannot exceed $1,843 for individuals or $2,485 for couples although some states provide eligibility for higher income thresholds.
If an individual is qualified and enrolled in Medicaid, Supplemental Security Income (SSI), or a Medicare Savings Program, they are automatically qualified for Extra Help.
This article will explore Medicare Part D, its limitations, and how Medicare Extra Help assists beneficiaries with those drug costs. It will also discuss many of the benefits of this program and how an individual can qualify to receive its assistance.
Medicare Part D coverage explained
The Medicare program is offered in four parts, A, B, C, and D, and covers various medical needs. Medicare Part D was established in 2006 after the enactment of the Medicare Modernization Act, which provided provisions for Medicare beneficiaries who needed help affording prescription medications.
Potential financial burdens with Medicare Part D
Various health insurance companies normally offer Medicare Part D as a prescription drug plan. This coverage was designed to alleviate the financial burden on Medicare beneficiaries associated with prescription drug costs. However, it still wasn’t the perfect solution many individuals sought. Even with Medicare Part D, some coverage gaps and penalties continue to place significant financial burdens on beneficiaries. These potential burdens are broken down below.
The Medicare Part D plans offered by health insurance companies normally carry a premium. While this premium is reduced to stay within the requirements of Medicare, it is still another bill many beneficiaries must pay. Because many beneficiaries are on a fixed income, even the smallest premiums can become financially burdensome.
Another significant burden with Medicare Part D plans comes from deductibles. Deductibles are a set amount the beneficiary must pay before the plan’s coverage can kick in. These fees can be challenging to manage, particularly for individuals requiring multiple prescriptions.
"Donut hole" coverage gaps
Perhaps the most significant complaint many Medicare beneficiaries have expressed with Part D is the “donut hole” coverage gap. This coverage gap is when the beneficiary and their plan must pay more for covered drugs than during the initial tier before reaching the needed threshold for more coverage from the drug plan.
Each Medicare Part D plan has a special list of approved medications for coverage called a “formulary.” Suppose a beneficiary’s prescribed medication is not on that list. In that case, a member may ask their doctor to submit a request for a formulary exception. If approved by the Drug Plan the drug will be covered. But if denied it will not be covered, causing the beneficiary to pay for it out of pocket or ask their doctor for an alternative medication that would be covered.
Late enrollment fees
Not enrolling in a Part D plan during the initial eligibility period may incur a late enrollment penalty when deciding to enroll. That penalty would be factored into the insurance premium, becoming a long-term financial burden for the beneficiary.
How Medicare Extra Help assists with prescription coverage
Given the challenges beneficiaries of Medicare encountered with affording their prescriptions, Medicare Extra Help was designed as a Low-Income Subsidy (LIS) program, provisioned by the Medicare Modernization Act of 2003. The benefits provided by Medicare Extra Help are as follows:
- Reduced or no monthly premiums
- Lower or no prescription drug deductibles
- Lower copayments or coinsurance
- Protection against late enrollment penalties
- The flexibility to change Part D plans once per calendar quarter
In addition to these benefits, Medicare Extra Help also reduces the financial impact of the “donut hole” coverage gap. Medicare Extra Help is an additional form of coverage during that time, providing a financial reprieve from the impact that beneficiaries would have otherwise experienced.
Overall, this program provides financial assistance where Medicare Part D can’t, making prescription drugs accessible for those on a low or fixed income.
Who qualifies for Extra Help Medicare?
If an individual meets the Extra Help income limits of 2023 or other criteria, they may be able to benefit from the helpful provisions of Medicare Extra Help. These criteria are broken down below.
Extra Help income limits 2023
A beneficiary’s eligibility for Medicare Extra Help will be assessed similarly to when applying for any other federal program. To qualify for Medicare Extra Help in 2023, the monthly income cannot exceed $1,843 for individuals or $2,485 for couples, although some states provide eligibility for higher incomes.
The household assets will also be assessed and may be applied toward the beneficiary's eligibility for Extra Help. The value of assets must not exceed $16,660 for single individuals or $33,240 for couples. Please note that certain assets will not count as income and will not hurt a person’s chances of qualifying for Medicare Extra Help.
Automatic qualification for Extra Help
Sometimes, individuals may automatically qualify for Medicare Extra Help after qualifying for other federal programs. If an individual is qualified and enrolled in Medicaid, Supplemental Security Income (SSI), or a Medicare Savings Program, they are automatically qualified for Extra Help. The Centers for Medicare and Medicaid Services (CMS) notifies such individuals of their eligibility by mail. The automatic qualification allows beneficiaries to claim their benefits without applying for the program.
How to apply for Medicare Extra Help
After learning about the many benefits of Medicare Extra Help, one may find they desire to apply for this program. The application process is simple, requiring a few documents and an application, which can be found online on the Social Security Administration (SSA) website. Beneficiaries can also set up an appointment with an SSA representative who will be able to provide support and guidance during the application process.
Documents needed for the application
To support the Medicare Extra Help application and to prove one’s eligibility, beneficiaries will be expected to provide the following documents as proof of income:
- Bank statements and tax returns
- Individual Retirement Account (IRA)
- 401(k) account balances
- Statements for pensions
- Veterans’ benefits
- Railroad Retirement Board Benefits
Medicare Extra Help provides additional support and coverage for prescription medication costs in situations where Part D does not. Exploring your qualifications for this program may be a great help, especially if you are a Medicare beneficiary frequently paying for your prescriptions.
Is Medicare Part D the same as Extra Help?
No. The Medicare Extra Help program is offered to qualified beneficiaries of Medicare Part D who need assistance in paying for their premiums, copays, deductibles, and other payments related to their prescription drug costs.
Can I get Medicare Part D directly from the government?
No. Medicare Part D was designed to be provided through private insurance companies like Anthem Blue Cross Blue Shield, United Healthcare, and Health Net.
What is the premium for Part D in 2023?
The average premium for Medicare Part D in 2023 is $31,50, with costs ranging from $6 to $111.