If your prescription costs feel like they are eating your grocery budget, you are not alone. Medicare Part D can be pricey, and it is especially stressful when your income is fixed or your savings are modest.
The good news is that Medicare has a program built for this: Extra Help, also called the Low-Income Subsidy (LIS). It can lower what you pay for Part D premiums and deductibles and cut your copays at the pharmacy.
Below, I will walk you through how Extra Help works, the 2026 income and resource tests, what you can expect to pay if you qualify, and the simplest ways to apply.
Quick note: Extra Help is about Part D prescription drug costs. If you need help paying your Part B premium, that is usually a different program called a Medicare Savings Program (we will compare them later).
What Extra Help covers
Extra Help is a federal benefit that reduces what you pay for Medicare Part D coverage. If you qualify, it can:
- Lower or eliminate your monthly Part D premium up to a benchmark amount
- Reduce or eliminate your deductible
- Lower your copays for prescriptions (both generic and brand-name)
- Remove the late enrollment penalty for Part D for as long as you qualify
You still enroll in a Part D plan (or a Medicare Advantage plan with drug coverage). Extra Help makes that coverage cheaper at the point of use.
Important update under current law: Medicare Part D has changed in a big way in recent years. Under the Inflation Reduction Act, beneficiary cost-sharing in the catastrophic phase was eliminated starting in 2024, and Part D has a hard annual out-of-pocket cap starting in 2025 (it is $2,000 in 2025 and is indexed in later years). That cap applies to Part D covered drugs, even if you do not qualify for Extra Help. Extra Help can still reduce costs long before you ever reach the cap.
2026 eligibility
Extra Help eligibility is based on two main tests:
- Income (how much money comes in)
- Resources (what you own in countable savings and investments)
Because annual federal amounts can change, Social Security updates the exact numbers each year. For 2026, use the official Social Security tool or your local benefits counselor to confirm the current thresholds for your household size.
Also worth saying out loud: rules can change from year to year, not just the dollar limits. If you are reading this later, verify the current policy and numbers for your year.
Income limits (2026)
In general, Extra Help is available to people with income up to roughly 150% of the Federal Poverty Level, as long as they also meet the resource limits. Some income is not counted, and certain situations can allow higher effective limits.
Income commonly considered includes:
- Social Security benefits
- Pensions
- Wages (if you work)
- Some regular payments you receive from retirement accounts (this is about money coming out as income, not the account balance itself)
Income that may be treated differently or excluded in some cases can include certain assistance programs or irregular payments. When in doubt, apply anyway. A lot of people assume they are “a little over” and never let Social Security actually run the numbers.
Resource limits (2026)
Resources are things like money you can access. Typical countable resources include:
- Checking and savings account balances
- Certificates of deposit
- Stocks, bonds, mutual funds
- Individual Retirement Accounts (IRAs) and similar accounts
- Cash value in some life insurance policies
Small caveat: SSA uses specific “countability” rules. Not every retirement account or life insurance policy is treated the same in every situation. If you are unsure, list it and let SSA determine what counts.
Common resources that generally do not count include:
- Your primary home
- Your vehicle(s)
- Personal belongings
- Most burial plots and many burial arrangements
Social Security also applies a burial expense allowance concept, which can effectively reduce countable resources in some cases. Again, this is why applying can beat guessing.
If your income dropped
If you had a recent life change, for example retirement, losing a spouse, or reduced work hours, you might qualify now even if last year’s tax return looks higher. Ask Social Security about using more current information.
How Extra Help works
This is a key update: under the Inflation Reduction Act, the old split between “full” and “partial” Extra Help was expanded. Today, many people who would have received partial assistance in the past now qualify for the full Extra Help benefit if they are under about 150% of the Federal Poverty Level and meet the resource limits.
What you can expect
If you qualify for Extra Help, people typically see the biggest relief in these areas:
- Premium: reduced to $0 for a benchmark plan (you can choose a higher-premium plan, but you may pay the difference)
- Deductible: often $0 or very low for people who qualify
- Copays: lower, predictable pharmacy copays for covered drugs
- Late penalty: no Part D late enrollment penalty for as long as you qualify
A quick nuance: people who qualify automatically through Medicaid, an MSP, or SSI are often “deemed” eligible. Their cost-sharing is still very low, but exact copays can vary based on your situation and the drug type. The practical takeaway is the same: costs are typically small and predictable.
Three details people miss
- Benchmark premium rule: Extra Help covers premiums up to a benchmark amount in your state. In plain English, this is a standard-priced plan in your area that Medicare uses for subsidy purposes. If you pick a plan that costs more, you pay the difference.
- Plan choice still matters: Extra Help lowers costs, but your plan’s formulary and preferred pharmacies still affect what you pay and which drugs are covered.
- You may get a Special Enrollment Period (SEP): once you have Extra Help, you can typically change Part D plans outside the usual enrollment windows. This is a big deal if your medications change or your plan stops working for you.
How to apply
Automatic eligibility
You may get Extra Help automatically if you have any of these:
- Medicaid
- A Medicare Savings Program (QMB, SLMB, QI, or QDWI)
- Supplemental Security Income (SSI)
If you are automatically eligible, you will typically receive a notice letting you know. Some notices come from Medicare (CMS) and may also include information about plan assignment or reassignment. If you think you qualify automatically but never got a notice, call Medicare or Social Security and ask them to check your status.
Apply through Social Security
For most people, the simplest route is applying directly with the Social Security Administration (SSA). You can apply:
- Online through SSA
- By phone with SSA
- In person at a local SSA office
SSA is the agency that determines Extra Help eligibility.
Apply through your state
Some people come into Extra Help through their state when they apply for Medicaid or a Medicare Savings Program. States and SSA share information, but it can take time. If you need drug cost help fast, you can still apply directly with SSA while you work on other programs.
What you need
When you apply, you are basically proving identity and giving a snapshot of income and resources. Gather what you can, but do not let perfect paperwork stop you from starting.
- Social Security number and Medicare number (if handy)
- Bank account statements (checking and savings)
- Statements for retirement accounts and investments
- Information about income sources (Social Security, pension, wages)
- Estimated value of resources if you do not have exact statements
Steps to apply
- Pick your route: Start with SSA online or by phone if possible.
- List your income: Social Security, pension, job income, and any other regular payments.
- List your resources: Checking, savings, investments, retirement accounts. Remember your home and car typically do not count.
- Submit your application: Keep a note of the date submitted and any confirmation number.
- Watch your mail: You may get a decision letter or a request for more information.
- If approved, review your Part D plan: Make sure your plan covers your medications at the best pharmacy options in your area.
If you get denied, read the reason carefully. Many denials come down to a missing detail or a misunderstanding of resources. You can ask for a review or reapply if circumstances change.
Renewals and reviews
Extra Help is not always “set it and forget it.” Some people are reviewed each year, and others keep Extra Help automatically.
- If you are deemed eligible (because you have Medicaid, an MSP, or SSI), you typically keep Extra Help as long as you keep that underlying eligibility.
- If you qualified by applying (based on income and resources), SSA may send a form or request updated information. Open those letters and respond, even if it is just to confirm nothing changed.
If your income or resources drop at any point, you do not have to wait for a review. You can contact SSA and ask about updating your information.
Extra Help vs MSP
This is a common mix-up, so here is the clean separation.
Extra Help (LIS)
- Run by: Social Security (SSA)
- Helps pay for: Medicare Part D drug plan costs (premiums, deductibles, copays)
- Main goal: Reduce prescription drug costs
Medicare Savings Programs (MSP)
- Run by: Your state Medicaid agency
- Helps pay for: Medicare Part B premiums (and sometimes other Medicare cost sharing, depending on the MSP)
- Main goal: Reduce Medicare premium and medical out-of-pocket costs
Important crossover: If you qualify for an MSP, you usually get Extra Help automatically. That is one reason it is smart to check both programs if money is tight.
Plan choice tips
Extra Help reduces costs, but it does not automatically pick the best drug plan for your medication list. Here is what I would focus on:
- Formulary match: Confirm your prescriptions are covered.
- Pharmacy network: Preferred pharmacies can mean lower copays.
- Benchmark awareness: If you want a plan above the benchmark, make sure you are comfortable paying the difference.
- MA-PD vs Part D: If you are in Medicare Advantage with drug coverage, Extra Help can still apply. Just make sure you are comparing the right type of plan and that your doctors and medications both fit.
- Annual review: Plans change every year. Recheck during the Annual Enrollment Period.
Common questions
Does Extra Help replace Part D?
No. You still enroll in a Part D plan (or Medicare Advantage with drug coverage). Extra Help is the subsidy that lowers what you pay.
Can I have Extra Help and Medicaid?
Yes. Many people who have Medicaid are automatically eligible for Extra Help.
What if I am married?
Eligibility considers household circumstances. Income and resources are evaluated using rules for individuals versus couples. If you are unsure, apply and let SSA calculate it.
If I qualify, when does it start?
Start dates vary based on timing and your enrollment status. If you need help coordinating your Part D plan effective date with Extra Help, a SHIP counselor can be a lifesaver.
Free help
If paperwork and phone calls make your stress spike, use a free, unbiased helper:
- SSA: Apply and ask questions about the Extra Help application
- SHIP (State Health Insurance Assistance Program): Free Medicare counseling in every state
- Your state Medicaid office: For MSP and Medicaid screening
When you call, have your medication list, Medicare card, and a rough estimate of your bank balances available. That gets you through most conversations without a second call.
The bottom line
Extra Help can turn Part D from a constant financial worry into a manageable monthly line item. If you are anywhere near the 2026 income and resource limits, it is worth applying. The upside can be hundreds or even thousands saved over a year, and the application is far less scary than it sounds once you break it into steps.
If you want the quickest next move: gather your income and bank info, then apply with Social Security and review your Part D plan choices right after you are approved.