Part D Extra Help Program for Medicare Beneficiaries

Medicare Part D Extra Help: What Insurance Agents Need to Know

Prescription costs can create a serious financial burden for Medicare beneficiaries. Yet many people who may qualify for assistance do not realize help is available—or assume they will not qualify without checking.

The Medicare Part D Extra Help program, also called the Low-Income Subsidy or LIS, helps eligible beneficiaries reduce prescription drug costs. For insurance agents, understanding the program can support better plan recommendations, fewer enrollment surprises, and stronger client relationships.

What Is Medicare Extra Help?

Extra Help is a federal program for people with limited income and resources. It may reduce:

• Monthly Medicare Part D premiums
• Part D deductibles
• Prescription copayments and coinsurance
• Part D late enrollment penalties

Beneficiaries must still enroll in Medicare drug coverage through either a stand-alone Prescription Drug Plan or a Medicare Advantage plan that includes Part D coverage. Extra Help works alongside the selected plan; it does not replace Part D coverage.

What Does Extra Help Cover in 2026?

Beneficiaries receiving Extra Help generally pay:

The $0 premium applies when the beneficiary selects a plan whose premium is fully covered by the applicable Extra Help benchmark. Someone who chooses an enhanced plan or a plan above the benchmark may still owe part of the premium.

Agents should confirm the plan’s LIS premium rather than describing every Part D option as a $0-premium plan.

Who Automatically Qualifies?

A Medicare beneficiary generally receives Extra Help automatically when they:

• Receive full Medicaid benefits
• Receive Supplemental Security Income
• Participate in a Medicare Savings Program

These beneficiaries usually do not need to complete a separate Extra Help application.

Clients with both Medicare and Medicaid may also be candidates for a Dual Eligible Special Needs Plan. Review PSM’s Agent’s Guide to D-SNP Plans for additional information about eligibility, coverage coordination, and enrollment considerations.

Who Can Apply in 2026?

People who do not qualify automatically may apply through the Social Security Administration.

For 2026, the general income and resource limits for the 48 contiguous states and Washington, D.C., are:

Income limits are higher in Alaska and Hawaii. Certain income or resources may not count, so agents should treat these numbers as screening guidelines—not make the final eligibility determination. Medicare encourages people to apply when they are uncertain whether they qualify.

What Counts as a Resource?

Countable resources may include:

• Checking and savings accounts
• Certificates of deposit
• Stocks, bonds, and mutual funds
• Individual retirement accounts
• Real estate other than the primary residence

Resources generally do not include:

• The applicant’s primary home
• One vehicle
• Personal possessions and household items
• Burial plots
• Certain money set aside for burial expenses

Social Security or the appropriate state agency should evaluate the applicant’s full financial circumstances.

How Clients Apply for Extra Help

Clients may apply:

1. Online through the Social Security Administration
2. By calling Social Security
3. Through a local Social Security office
4. With help from a State Health Insurance Assistance Program or qualified community organization

Applicants may need information about bank accounts, investments, retirement income, pensions, annuities, veterans benefits, and a spouse’s income and resources.

Extra Help applications can be submitted before or after enrollment in Part D, but receiving Extra Help does not automatically place the beneficiary in the most appropriate drug plan.

Plan Selection Still Matters

Extra Help reduces costs, but agents must still evaluate:

• Prescription formularies
• Drug tiers
• Prior authorization
• Step therapy
• Quantity limits
• Preferred pharmacy networks
• Mail-order options
• The plan’s LIS premium
• Any premium above the benchmark

A plan with a $0 LIS premium may still be a poor fit when it excludes an important medication or does not offer preferred pricing at the client’s pharmacy.

PSM’s Medicare.gov Account and Part D Comparison Guide can help agents organize medications, compare pharmacies, and evaluate available plans.

Extra Help and the Part D Late Enrollment Penalty

People who qualify for Extra Help generally do not pay the Part D late enrollment penalty while eligible.

Without Extra Help or other creditable prescription coverage, a beneficiary may face an ongoing penalty based on the number of full months they went without eligible coverage.

Additional Enrollment Opportunities

Medicaid and Extra Help beneficiaries may use the Dual/LIS Special Enrollment Period to enroll in or switch stand-alone Part D plans once per calendar month.

The monthly Dual/LIS SEP generally does not allow someone to enroll in or switch between non-D-SNP Medicare Advantage plans. Full-benefit dual-eligible beneficiaries may also qualify for an Integrated Care SEP to join certain integrated D-SNPs aligned with their Medicaid managed care coverage.

Agents should verify the beneficiary’s exact eligibility and permitted election before submitting an enrollment.

Extra Help and Medicare Advantage

Extra Help can reduce costs associated with the Part D portion of a Medicare Advantage Prescription Drug plan.

It does not automatically eliminate:

• The Medicare Part B premium
• A Medicare Advantage medical premium
• Medical copayments or coinsurance
• Out-of-network costs
• Non-covered services
• Optional supplemental-benefit premiums

Agents should clearly separate the plan’s medical costs from its prescription drug costs.

Extra Help vs. Medicare Savings Programs

The two programs are related but serve different purposes.

Extra Help primarily reduces Medicare Part D prescription drug costs.

Medicare Savings Programs may help pay the Part B premium and, depending on the program, certain Medicare deductibles, copayments, or coinsurance.

Someone who qualifies for a Medicare Savings Program also receives Extra Help, but a person may qualify for Extra Help without receiving full Medicaid benefits.

Extra Help vs. the Medicare Prescription Payment Plan

Extra Help should not be confused with the Medicare Prescription Payment Plan.

The payment plan allows a beneficiary to spread covered out-of-pocket prescription costs across monthly payments. It does not reduce the total amount owed.

Extra Help can actually lower qualifying premiums, deductibles, and prescription copayments. The Medicare Prescription Payment Plan changes when costs are paid—not how much the beneficiary ultimately owes.

Signs a Client May Need Extra Help

Consider discussing the program when a client:

• Struggles to afford prescriptions
• Skips or reduces doses to save money
• Lives on a limited fixed income
• Receives SSI
• Participates in a Medicare Savings Program
• Recently lost Medicaid
• Has difficulty paying a Part D deductible
• Is concerned about a late enrollment penalty
• Has experienced a recent financial change

The agent’s role is to recognize possible eligibility and direct the client to the appropriate application resource—not promise approval.

Common Mistakes Agents Should Avoid

Assuming the Client Will Not Qualify

Certain income and resources may be excluded. Encourage potentially eligible clients to apply rather than screening them out prematurely.

Treating Every LIS Plan as a $0-Premium Plan

The selected plan may exceed the applicable benchmark or include enhanced benefits that create an additional premium.

Ignoring the Formulary

Extra Help does not guarantee that every medication is covered by every plan.

Confusing Extra Help With Medicaid

Some people qualify for Extra Help without receiving full Medicaid benefits.

Using the SEP Incorrectly

The monthly Dual/LIS SEP does not permit every type of Medicare Advantage plan change.

Skipping the Annual Review

Premiums, formularies, pharmacy networks, and benchmark status can change each year.

PSM’s AEP Preparation Guide provides additional strategies for organizing annual reviews and preparing clients for coverage changes.

A Simple Way to Introduce Extra Help

Agents can explain the program without making assumptions about the client’s finances:

“Medicare has a program called Extra Help that may reduce prescription premiums, deductibles, and copayments for people with limited income and savings. The eligibility rules may be broader than you expect. Would you like information about how Social Security determines eligibility?”

This approach explains the potential benefit without promising approval or making the client uncomfortable.

Extra Help Review Checklist

Before recommending a Part D or MA-PD plan, confirm:

• Current Extra Help status
• Effective date of eligibility
• Medicaid or Medicare Savings Program status
• Prescriptions and dosages
• Formulary coverage
• Drug tiers and restrictions
• Preferred pharmacies
• LIS premium status
• Any premium above the benchmark
• Available enrollment period
• Expected effective date
• Whether a D-SNP may be relevant

Agents should also document the information reviewed and the reasons behind the client’s plan selection.

How PSM Brokerage Supports Medicare Agents

Extra Help cases may involve Part D rules, Medicaid coordination, Special Enrollment Periods, D-SNP eligibility, formulary research, and state-specific assistance programs.

PSM Brokerage supports independent agents with:

• Medicare Advantage and Part D carrier access
• D-SNP product education
• Contracting and certification support
• Enrollment and quoting technology
• Compliance guidance
• Marketing resources
• Medicare training
• Experienced account management

Explore PSM’s Medicare agent resources, review available Medicare solutions, or visit the PSM Agent Training Platform.

Frequently Asked Questions

Is Extra Help the same as Medicaid?

No. Medicaid is a federal-state health coverage program. Extra Help is a federal subsidy focused on Medicare Part D costs.

Does Extra Help pay the Part B premium?

No. A Medicare Savings Program may help an eligible beneficiary pay the Part B premium.

Can an Extra Help beneficiary choose any Part D plan for $0?

No. The plan generally must fall within the applicable LIS benchmark. Enhanced benefits or premiums above the benchmark may create an additional charge.

Does Extra Help cover every prescription?

No. The medication must generally be covered by the selected plan and may remain subject to formulary restrictions.

Can someone apply after being denied previously?

Yes. A beneficiary may apply again when financial circumstances or program limits change.

The Bottom Line

Medicare Extra Help can significantly reduce prescription drug costs for qualifying beneficiaries. In 2026, eligible clients may receive a $0 qualifying premium, $0 deductible, reduced prescription copayments, protection from the Part D late enrollment penalty, and additional opportunities to change drug coverage.

For agents, identifying Extra Help is only the first step. The subsidy must still be paired with an appropriate plan, covered medications, suitable pharmacies, and the correct enrollment period.

Extra Help lowers costs. Careful plan analysis helps ensure those savings translate into coverage that works.

For licensed insurance agent education only. Program limits, costs, enrollment rules, premiums, formularies, and eligibility standards may change. Verify current information through Medicare, Social Security, applicable state agencies, and current carrier materials before advising or enrolling a beneficiary.

External Sources

• Medicare.gov — Help With Drug Costs: Current Extra Help benefits, prescription copayments, premium treatment, and application guidance.
• Social Security Administration — Apply for Part D Extra Help: Application procedures and the financial information applicants may need.
• Medicare.gov — 2026 Extra Help Eligibility: Current income and resource limits for 2026.
• CMS — Dual/LIS Special Enrollment Periods: Current monthly Part D and integrated-care enrollment rules.