How to Apply for Medicare Low Income Subsidy

How to Apply for Medicare Low Income Subsidy

The Medicare Low-Income Subsidy program helps with prescription drug costs for those who meet the income and resource requirements.

The cost of healthcare can be daunting, with many expenses adding up over time, especially when it comes to prescriptions. Luckily, Medicare offers multiple programs that help deal with the costs associated with healthcare. For prescription drugs, this is called the Low-Income Subsidy, more commonly known as Extra Help.

How do I apply for Extra Help?

Applying for Extra Help is fairly simple. You apply through the Social Security Administration (SSA) here. Before you begin, SSA recommends gathering the following documents for both you and your spouse, if you are married:

·       Bank statements

·       Tax returns

·       Balances on any IRA and 401(k) accounts

·       Statements from other retirement accounts, such as annuities, pensions, Railroad Retirement Board, and Veterans’ benefits

Once you gather this information, you’re ready to complete the application. If you need someone from Social Security to assist you with the application, you can schedule an appointment by calling 1-800-772-1213 (TTY 800-325-0778).

Who qualifies for Extra Help?

Please note that applying for Extra Help does not enroll you in a Medicare Part D prescription drug plan. And, while you don't have to have a Part D plan to apply for Extra Help, you will not receive assistance until you have a Medicare Part D prescription drug plan.

You qualify as a candidate for Extra Help if:

●      You live in one of the 50 states or the District of Columbia

●      You have Medicare Part A and/or B

●      Your combined investments, real estate, and savings total less than $16,660 (unmarried or not living with spouse) or $33,240 (married and living with spouse)

However, if you have dual eligibility (qualify for both Medicare and Medicaid) or have Medicare and Supplemental Security Income (SSI) you do not need to apply for Extra Help, because you should get it automatically.

What are Medicare Savings Programs?

In addition to Extra Help, there are four other Medicare Savings Programs, or MSPs. These programs are designed to help you cover some of the costs associated with Medicare. Each has its own income and resource limits, with limits being slightly higher in Alaska and Hawaii. Let's discuss what these programs help with and how to qualify.

Qualified Medicare Beneficiary (QMB) Program

The QMB program helps pay for your Part A and Part B premiums, as well as your Part B deductibles, coinsurance, and copays. Medicare providers can't bill you for items and services covered by Medicare, but you may have to pay a small copay for Medicaid if it applies.

If you qualify for the QMB program, you also get Extra Help and will pay no more than $4 for any drug covered by your Part D plan.

Income limits for this program are:

●      $1,153 for individuals

●      $1,546 for married couples

Resource limits for this program are:

●      $8,400 for individuals

●      $12,600 for married couples

Specified Low-Income Medicare Beneficiary (SLMB) Program

The SLMB program helps cover your Part B premium, and you must have both parts of Original Medicare to qualify. Qualifying for this program also qualifies you for Extra Help, and you will pay no more than $9.85 for any drug covered by your plan.

Remember that, although they sound similar, this program is different from the Low-Income Subsidy.

Income limits for this program are:

●      $1,379 for individuals

●      $1,851 for married couples

Resource limits for this program are:

●      $8,400 for individuals

●      $12,600 for married couples

Qualifying Individual (QI) Program

This program also helps pay your Medicare Part B premiums, and you must have Parts A and B to qualify.

You have to apply every year to stay in the QI program, with states approving applications on a first-come, first-served basis. Those who received QI benefits the year before are given priority.

You also get Extra Help with the QI program, and prescriptions covered by your plan cost no more than $9.85. You cannot get help from the QI program if you qualify for Medicaid.

Income limits for this program are:

●      $1,549 for individuals

●      $2,080 for married couples

Resource limits for this program are:

●      $8,400 for individuals

●      $12,600 for married couples

Qualified Disabled Working Individual (QDWI) Program

The QDWI program only pays for your Part A premium. If you are working and have a disability, you may qualify for this program. You may also qualify if you lost premium-free Medicare Part A or Social Security disability benefits because you returned to work.

Income limits for this program are:

●      $4,615 for individuals

●      $6,189 for married couples

Resource limits for this program are:

●      $4,000 for individuals

●      $6,000 for married couples

All Medicare Savings Programs are run by the state itself and you can apply within your individual state here.

What qualifies as income and resources?

As shown above, all savings programs and Extra Help have income and resource limits you must meet to qualify for each program. Income is typically just what you actually bring in, with the following not counted towards your income:

●      Disaster assistance

●      Earned income tax credits

●      Education grants/scholarships

●      Financial assistance from other individuals for living expenses

●      Housing assistance

●      Supplemental Nutrition Assistance Program (SNAP)

●      Victim compensation payments

For a complete list of what does not count towards your income, contact the Social Security Administration at 1-800-772-1213 or TTY 1-800-325-0778.

Resources are the items that count towards your overall assets, with the following considered personal resources:

●      Cash within the home or outside it

●      Checking accounts, savings accounts, and certificates of deposit

●      Individual Retirement Accounts (IRAs)

●      Mutual funds

●      Real estate that is not your primary residence

●      Stocks and bonds

Items not considered personal resources include:

●      Burial plot or up to $1,500 for burial expenses if it has already been set aside

●      Furniture, jewelry, and other personal items

●      Life insurance policies

●      One vehicle

●      Your home

Some types of money do not count towards income or resources for up to 9 months, such as:

●      Housing assistance

●      Retroactive SSI payments

●      State/local government assistance for relocation

●      Tax advances and refunds from child tax credits

There are also some income and resource exclusions for Alaska Natives and Native Americans, which include:

●      Federal payments made to specific tribes

●      Land held in trust by the U.S. government or specific tribes

●      Up to $2,000 per year from restricted lands or trusts

Again, for a complete list of income and resource information, contact the SSA directly.

And to explore your Medicare plan options, call us toll-free at 888-992-0738. Our licensed Medicare agents will answer your questions and help you choose the right Medicare coverage for your unique needs and budget.

Additional resources

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