Levels Of Extra Help Benefits
There are several categories of people who qualify for Extra Help with Medicare, and the amount of Extra Help a Medicare recipient receives varies with the category. The categories are defined by the Medicare recipient’s income in relation to the Federal Poverty Guideline , or federal poverty level , for the previous year.
Medicare Extra Help Income Limits
- Extra Help can help you pay for Medicare Part D if you have limited income and resources.
- Part D is the part of Medicare that covers prescription drugs.
- As an individual, you must make less than $19,320 and have less than $14,790 in resources to qualify.
- If youre married, you and your spouse will need to make less than $26,130 in total income and have less than $29,520 in combined resources.
If you need help paying for the costs of your Medicare Part D prescription drug plan, you might qualify for assistance through a program called Extra Help. To qualify for Extra Help, you need to meet certain financial requirements.
Read on to learn about Medicares Extra Help program, including this years income limits, how to qualify, enrollment information, and more.
When you have a Medicare Part D plan, youre responsible for monthly premiums, deductibles, copayments, and coinsurance amounts.
Medicare Extra Help can help you pay some or all of those costs.
The program is overseen by the Social Security Administration and is based on income. The SSA estimates that program participants can save as much as $5,000 per year.
Are You Eligible For An Extra $914
To receive extra income from SSI, you need to meet certain eligibility requirements. Specifically:
- You must be 65 or older, or you must be disabled or blind.
- Your income must be limited. Income includes both earned and unearned income, as well as in-kind income .
- Your financial resources must be limited. You cannot have more than $2,000 in countable resources as a single person or $3,000 as a couple. Most assets count as resources for this test, but not things like the house where you live or a car you use for transportation.
If you meet these requirements, $914 is the maximum you would be eligible to collect from SSI. The benefit amount you actually end up with is reduced, though, if you have some other income. Social Security retirement benefits do count as income for these purposes, although the first $20 is exempt. As a result, any Social Security benefits above $20 will reduce your SSI on a dollar-for-dollar basis. So, for example, if you received $500 in Social Security, the first $20 wouldn’t be counted against you, but your SSI benefits would be reduced by $480.
Because Social Security retirement benefits reduce SSI, only around 1.34 million people receive both retirement and Supplemental Security Income benefits. And many of those seniors who double dip do end up with a payment less than $914. In November 2022, for example, the average monthly SSI payment for seniors 65 and over who were receiving SSI benefits totaled $508.84.
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You’re Getting A Bigger Check Next Year Here’s When You’ll See Your Extra Cash
Retirees have most likely heard the news by now: They’ll be receiving the largest Social Security cost of living adjustment in four decades. COLAs are designed to help ensure benefits keep pace with rising prices. Since inflation has run rampant over the past year, the Social Security administration announced a huge benefits increase.
If you’re excited about this Social Security raise and wondering when it will come, here’s your answer.
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Introduction To Medicare Part D
This section constitutes an introduction to Part D. For more detailed information on any of the topics in this section, please click on the links within the topics. There, you will also find relevant legislative, statutory and CFR citation.
Prior to 2006, Medicare paid for some drugs administered during a hospital admission , or a doctors office . Medicare did not cover outpatient prescription drugs until January 1, 2006, when it implemented the Medicare Part D prescription drug benefit, authorized by Congress under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. This Act is generally known as the MMA.
The Part D drug benefit helps Medicare beneficiaries to pay for outpatient prescription drugs purchased at retail, mail order, home infusion, and long-term care pharmacies.
Unlike Parts A and B, which are administered by Medicare itself, Part D is privatized. That is, Medicare contracts with private companies that are authorized to sell Part D insurance coverage. These companies are both regulated and subsidized by Medicare, pursuant to one-year, annually renewable contracts. In order to have Part D coverage, beneficiaries must purchase a policy offered by one of these companies.
The costs associated with Medicare Part D include a monthly premium, an annual deductible , co-payments and co-insurance for specific drugs, a gap in coverage called the Donut Hole, and catastrophic coverage once a threshold amount has been met.
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How Medicare Extra Help Works
Once you have a plan, youll have to provide the insurer with documentation to prove that you are receiving Extra Help. The documents that count as proof include
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A purple, yellow, or green notice of automatic qualification from Medicare
-
An Extra Help award notice from the SSA
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Your Supplemental Security Income award letter
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A copy of your Medicaid card
Once you provide documentation, you will immediately start paying the lower Extra Help drug prices.
Remember that the income and asset limits for Extra Help change every year. Just because you qualify one year does not mean you will qualify the next. Youll receive a notice from Medicare around the end of September if the SSA believes you no longer automatically qualify for Extra Help.
In this case, you will need to reapply for the program through SSA.gov or your local Medicaid office.
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Derek is a former senior editor and personal finance expert at Policygenius, where he specialized in financial data, taxes, estate planning, and investing. Previously, he was a staff writer at SmartAsset.
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Does Medicare Premiums Reduce Social Security Taxable Income
Asked by: Antwan Feeney
Is Social Security Taxed Before Or After the Medicare Deduction? You may not pay federal income taxes on Social Security benefits if you have low-income. But for most, your Social Security benefits are taxable. That means youll pay taxes before Medicare premiums are deducted.
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How Do I Apply Extra Help
You can apply for Extra Help in a few different ways.
One of the quickest ways is to apply online. The SSA has an online application you can use to get started right away. You can also mail in your application.
If you need assistance with your application you can:
- Apply by phone at 800-772-1213 or 800-325-0778. You can call Monday through Friday between 7 a.m. and 7 p.m.
- Apply at your local Social Security office.
- Apply at your local Medicaid office. This option is only available if you qualify for Medicaid.
No matter how you apply, youll need to be prepared to give the SSA information about your finances. This can include:
- recent pay stubs
- bank statements, including for any savings accounts
- stock certificates or investment statements
- information about your pension
- recent tax returns
Once your application is approved, youll need to enroll in a Part D plan. Medicare considers your approval for Extra Help a qualifying event for a special enrollment period, so you dont need to wait for a standard enrollment period.
This means you can select a Part D plan as soon as your Extra Help is approved. You can shop for Part D plans directly on the Medicare website.
You dont need to apply separately if youre already enrolled in Medicaid, an MSP that pays your Part B premiums, or in SSI. In these cases, youll be automatically enrolled in Extra Help when you join a Part D plan.
Find Out If You Qualify
You might be eligible if you have an annual income under $20,000 and have less than $15,000 in assets. However, there are some exceptions.
Your assets may include bank accounts, savings bonds, mutual funds, Individual Retirement Accounts , and any other cash at home or anywhere else. Include the things you own by yourself, with your spouse, or with someone else. Do not count your home, vehicles, personal possessions, life insurance, burial plots, irrevocable burial contracts, or back payments from Social Security or SSI.
Find out if you might be eligible for benefits below.
DISCLAIMER: This quiz does not replace the official enrollment process and uses Partial Extra Help numbers to qualify the results. Those that may be eligible for Full Extra Help will need to contact their State Health Insurance Program Center. Eligibility does not guarantee enrollment into the program.
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Do I Qualify For Medicare Extra Help
You automatically qualify for Extra Help if you receive Medicaid coverage, are enrolled in a state-sponsored Medicare Savings Program, or get Supplemental Social Security benefits. You may also be eligible if your:
The cutoff amounts differ if you are caring for dependents or if you live in Alaska or Hawaii.
Don’t Get Excited About The Extra Money
Receiving an 8.7% COLA may seem exciting, but remember this isn’t really a raise in the traditional sense. It’s an adjustment to your benefits to account for inflation. In other words, your benefits increased 8.7% because the data shows prices were up that much from one year to the next.
So while you will see more money from the Social Security Administration when you get your first January payment, it’s not going to buy you more than your current benefits do. You’ll need to make sure you’re sticking to your budget and continuing to spend responsibly to stretch your benefits and ensure your savings lasts throughout your later years.
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Is Medicare Free At Age 65
You are eligible for premium-free Part A if you are age 65 or older and you or your spouse worked and paid Medicare taxes for at least 10 years. You can get Part A at age 65 without having to pay premiums if: You are receiving retirement benefits from Social Security or the Railroad Retirement Board.
Ssi Benefits Could Give You A Lot More Monthly Income
Social Security retirement benefits are earned benefits, with the amount you receive based on your average earnings during the 35 years when you made the most money . If you didn’t earn a lot, your benefit may be very low. You could potentially claim survivor or spousal benefits based on a spouse’s work history if you’re eligible for them, but that’s not an option for everyone.
If you aren’t a very high earner, you could potentially claim another type of benefit called Supplemental Security Income in addition to your retirement checks. SSI benefits are not earned benefits based on what you paid into the system, but rather are meant to support people with limited incomes who need some extra help.
The maximum SSI benefit in 2023 totals $914 for an individual, or $1,371 for a qualifying individual with a qualifying spouse. So if you are eligible to receive this other form of Social Security, you could potentially increase your monthly income by a substantial sum.
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How To Qualify For Medicare Extra Help
Sounds great, right? It is, but not everyone is eligible for Extra Help. To qualify, Medicare beneficiaries must:
- Reside in the United States and be enrolled in or eligible for a Part D prescription drug plan.
- Meet the resource limits. For 2022, the Extra Help resource limits are $15,510 for an individual or $30,950 for a married couple living together. Resources means bank accounts, real estate other than the primary residence, stocks, bonds, mutual funds, IRAs, and cash. This does not include primary residences, vehicles, personal possessions, life insurance policies, and burial expenses.
- Meet the income limit for Medicare Extra Help.The Medicare Extra Help income limits for 2022 are annual incomes below $19,320 for individuals or $26,130 combined for married couples. In this case, income does not include food stamps, housing assistance, home energy assistance, medical treatment and drugs, disaster assistance, tax credit payments, assistance from others, victims compensation payments, scholarships, and education grants. Beneficiaries who earn more can still qualify if they:
- Support other family members who live with them
- Have other earnings from work
- Live in Alaska or Hawaii
Why Did I Get An Extra Payment From Social Security This Month
The extra payment compensates those Social Security beneficiaries who were affected by the error for any shortfall they experienced between January 2000 and July 2001, when the payments will be made. Who was affected by the mistake? The mistake affected people who were eligible for Social Security before January 2000.
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Understanding The Extra Help With Your Medicare Prescription Drug Plan
Anyone who has Medicare can get Medicare prescription drug coverage. Some people with limited resources and income also may be able to get Extra Help with the costs monthly premiums, annual deductibles, and prescription co-payments related to a Medicare prescription drug plan.
The Extra Help is estimated to be worth about $5,000 per year. Many people qualify for these big savings and dont even know it. To find out if you qualify, Social Security will need to know the value of your savings, investments, real estate , and your income. The SSA needs information about you and your spouse, if you are married and living together.
To help Social Security determine if you are eligible for Extra Help, you will need to file an Application for Extra Help with Medicare Prescription Drug Plan Costs .
Medicares Extra Help Program
At CenterWell Pharmacy, we understand paying for your prescription medicines can add up quickly throughout the year. This is why we work hard to by offering $0 copays on most generic 90-day prescriptions and finding low-cost alternatives for costly medicines.
However, for some, we understand that you need more help to stay on track with your care. So, we wanted to make sure you knew about Medicares Extra Help program. The Extra Help program provides added financial support to people with limited income and resources, as well as the following benefits:¹
- $0 or reduced drug coverage premiums and lower out-of-pocket costs
- No coverage gap
- No late enrollment penalty for
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Eligibility For Part D
Anyone with Medicare is eligible to enroll in a Part D plan. To enroll in a PDP, the individual must have Part A OR Part B. To enroll in an MA-PD, the individual must have Part A AND Part B.
Enrollees must live in their plans service area. In the case of homeless persons, the following may be used as a permanent residence: a Post Office box, the address of a shelter or clinic, or the address where the person receives mail such as Social Security checks.
PDPs are usually national plans, but MA-PDs have delineated regions, sometimes by state, sometimes by counties within states ). For this reason, MA-PDs may not be appropriate for those who travel a great deal or who maintain summer and winter residences in different areas of the country. NOTE: Some MA-PDs offer passport plans that allow members to obtain benefits outside their normal service areas.
Individuals who reside outside the United States* are not eligible to enroll, but may do so upon their return to the country. Incarcerated individuals may not enroll in Part D, but they may enroll upon release from prison. Prior to 2021, people with end-stage-renal-disease could not enroll in an MA-PD. Starting in 2021, people with ESRD can enroll in Medicare Advantage plans during the annual Open Enrollment Period.
There are no other eligibility restrictions or requirements for Part D.
How Can Medicare Savings Programs Help
Medicare Savings Programs are intended to help individuals with limited income and resources pay their Medicare premiums and other out-of-pocket costs while retaining their Medicare coverage. For the purposes of MSPs, countable resources include financial accounts such as checking and savings, stocks, and bonds. Resources that don’t count include:
- Burial plot and up to $1,500 in funds put aside for burial expenses
- Household and personal items
MSPs are administered by at the state level but are federally funded. There are several programs available, and each one has different income and asset limits that you need to meet in order to qualify. Please note that all limits are slightly higher in Alaska and Hawaii.
A brief summary of programs that pay the Part B premium is as follows:
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Recent Articles And Updates
For older articles, please see our article archive.
References
The 2010 Medicare Part D $250 Donut Hole Rebate. Q1Group LLC, .
2020 Part D Income-Related Monthly Premium Adjustment. . .
2021 Medicare Part D Outlook. Q1Group LLC, .
2021 Part D Income-Related Monthly Premium Adjustment. . .
How Do Medicare Advantage Ppo Plans Work? Healthline Media, May 5, 2021, .
Analysis of Part D Beneficiary Access to Preferred Cost Sharing Pharmacies . . .
Announcement of Calendar Year 2021 Medicare Advantage Capitation Rates and Part C and Part D Payment Policies. . .
Assistance with Paying for Prescription Drugs. Center for Medicare Advocacy, November 30, 2015, .
How Medicare Part D Works. AARP, October 2016, .
Medicare Advantage Special Needs Plans . Healthline Media, May 3, 2021, .
Kirchhoff, Suzanne M. Medicare Coverage of End-Stage Renal Disease . . .