New Law Makes More People Eligible for Part D Assistance

Under the current Extra Help program, people whose incomes fall between 135 percent and 150 percent of the federal poverty guideline can qualify for a partial low-income subsidy, but that provision of the program will be eliminated once the higher income limit for the full benefit kicks in.

“Enrollees who switch from partial to full LIS benefits would likely see a meaningful reduction in their annual out-of-pocket costs,” says Leigh Purvis, AARP’s director of health care costs and access. An estimated 400,000 Medicare beneficiaries received partial assistance from the Extra Help program in 2020, according to the nonpartisan Kaiser Family Foundation. The foundation estimates that under the new law, annual out-of-pocket costs for these individuals could fall by nearly $300. “This provision will benefit low-income Black and Hispanic Medicare beneficiaries in particular, who are more likely than white beneficiaries to have incomes between 135 percent and 150 percent of poverty,” a KFF report says.

The low-income subsidy — or Extra Help — program is administered by the Social Security Administration (SSA). In addition to an annual income limit, the program includes a resources test. According to SSA, to qualify for Extra Help in 2022, an individual must have resources of less than $15,510; a married couple’s resources can’t be any more than $30,950. SSA has an online brochure that explains how the Extra Help program works and what assets are included in the resource limit. For example, an applicant’s bank accounts, retirement savings (IRAs, mutual funds, etc.) and real estate other than the home they live in are all included in the asset test. But the person’s car, insurance policies and personal possessions are not included.