Can Extra Help Lower Your Drug Costs?

By Patricia Barry

Copyright © 2018 by AARP. All rights reserved.

Filling prescriptions may be your biggest medical expense when you’re on Medicare if you take a lot of drugs or a few hugely expensive ones. The Part D prescription drug program helps up to a point, but its premiums, deductibles, and co-pays — not to mention the higher costs of the doughnut hole, if you fall into it — add up to outlays of cash that many people just can’t afford.

That’s where Extra Help comes in. This special program within Part D provides low-cost drug coverage — and even does away with the doughnut hole altogether! — for people with incomes and savings under a certain level.

Millions of people in Medicare have been able to save many hundreds or even thousands of dollars per year on their drug bills because of the Extra Help program. Even more crucially, Extra Help has allowed many folks who didn’t previously have any drug coverage to fill all the prescriptions they need for the first time. This benefit is truly valuable.

Here’s a list of the main points you need to know about the program:

  • If you were receiving Medicaid before joining Medicare, you’ll now get your drug coverage from Part D’s Extra Help program and not from Medicaid — even if you continue to qualify for Medicaid.
  • If you have full Medicaid coverage or Supplemental Security Income (SSI — a federal financial assistance program run by Social Security), if your state pays your Medicare premiums, or if you qualify for a Medicaid medical spend-down program, you qualify automatically for full Extra Help (lowest-cost drug coverage). Medicare will send you a letter (in a purple envelope) confirming that you don’t need to apply. Otherwise, you do need to apply.
  • If you don’t qualify for full Extra Help, you may qualify for partial Extra Help, which still provides coverage at lower costs than in the regular Part D program.
  • Extra Help is easier to apply for than many assistance programs, but you have to provide details of your income and assets or resources (which mainly means your savings).
  • Everybody, whether qualifying for full or partial assistance, gets full drug coverage throughout the year. Nobody receiving Extra Help has to face the dreaded doughnut hole.
  • Anybody with Extra Help can switch to a different Part D drug plan at any time of the year — no waiting until open enrollment rolls around.
  • Getting Extra Help doesn’t affect your eligibility for SSI or assistance that pays the costs of heating or cooling your home. Food stamps and subsidized housing may be reduced, but the money Extra Help saves should outweigh what you lose.
  • Be aware that qualifying for Extra Help, even automatically, is only one step in the process. You still have to enroll in a Part D drug plan to get your prescriptions covered. You can sign up with a plan of your own choosing — but if you don’t, Medicare will pick one and enroll you in it, even though that plan may not be ideal for you.