Understanding the Extra Help With Your Medicare Prescription Drug Plan

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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 don’t even know it. To find out if you qualify, Social Security will need to know the value of your savings, investments, real estate (other than your home), 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 (Form SSA-1020).

Resources and Income

What is the resource limit?

To qualify for Extra Help, your resources must be limited to $14,610 for an individual or $29,160 for a married couple living together.
Resources include the value of the things you own. Some examples are:

  • Real estate (other than your primary residence).
  • Bank accounts including checking, savings and certificates of deposit.
  • Stocks.
  • Bonds, including U.S. Savings Bonds.
  • Mutual funds.
  • Individual Retirement Accounts (IRAs).
  • Cash at home or anywhere else.

What does not count as a resource?

The Social Security Administration (SSA) does not count:

  • Your primary residence.
  • Your personal possessions.
  • Your vehicle(s).
  • Resources you couldn’t easily convert to cash, such as jewelry or home furnishings.
  • Property you need for self-support, such as rental property or land you use to grow produce for home consumption.
  • Non-business property essential to your self-support.
  • Life insurance policies.
  • Burial expenses.
  • Interest earned on money you plan to use for burial expenses.

Certain other money you are holding is not counted for nine months, such as:

  • Retroactive Social Security or Supplemental Security Income (SSI) payments.
  • Housing assistance.
  • Tax advances and refunds related to earned income tax credits and child tax credits.
  • Compensation you receive as a crime victim.
  • Relocation assistance from a state or local government.

You should contact Social Security for other resource exclusions.

What is the income limit?

To qualify for Extra Help, your annual income must be limited to $19,140 for an individual or $25,860 for a married couple living together. Even if your annual income is higher, you may still be able to get some help.

Some examples where your income may be higher and you can still get Extra Help include if you or your spouse:

  • Support other family members who live with you.
  • Have earnings from work.
  • Live in Alaska or Hawaii.

What doesn’t count as income?

Not all cash payments count as income. For example, The SSA doesn’t count:

  • Supplemental Nutrition Assistance Program (food stamps).
  • Housing assistance.
  • Home energy assistance.
  • Medical treatment and drugs.
  • Disaster assistance.
  • Earned income tax credit payments.
  • Assistance from others to pay your household expenses.
  • Victim’s compensation payments.
  • Scholarships and education grants.

You should contact Social Security for other income exclusions.

Applying for Extra Help

Applying for Extra Help is easy. Just complete Social Security’s Application for Extra Help with Medicare Prescription Drug Plan Costs (Form SSA-1020).
Use one of these methods:

  • Apply online at www.socialsecurity.gov/extrahelp.
  • Call Social Security at 1-800-772-1213 (TTY 1-800-325-0778) to apply over the phone or to request an application.
  • Apply at your local Social Security office.

After you apply, Social Security will review your application and send a letter to you to let you know if you qualify for Extra Help. After you qualify, you can choose a Medicare prescription drug plan. If you do not select a plan, the Centers for Medicare & Medicaid Services will do it for you. The sooner you join a plan, the sooner you begin receiving benefits.

If you aren’t eligible for Extra Help, you still may be able to enroll in a Medicare prescription drug plan.

Late Enrollment Penalty

If you don’t enroll in a Medicare drug plan when you’re first eligible, you may pay a late enrollment penalty if you join a plan later. You’ll have to pay this penalty for as long as you have Medicare prescription drug coverage. However, you won’t pay a penalty if you get Extra Help or other eligible prescription drug plan coverage.

NOTE: The Medicare prescription drug plan late enrollment penalty is different than the Medicare Part B late enrollment penalty. If you don’t enroll in Part B when you’re first eligible for it, you may have to pay a late enrollment penalty for as long as you have Part B coverage. Also, you may have to wait to enroll, which will delay Part B coverage.
For information about enrollment periods, visit Medicare.gov or call 1-800-MEDICARE (1-800-633-4227; TTY 1-877-486-2048).

Why should I apply online?

The online application is secure and offers several advantages. It takes you through the process step-by-step with a series of self-help screens. The screens will tell you what information you need to complete the application and will guide you in answering the questions fully. You can apply from any computer and at your own pace. You can start and stop at any time during the process, so you can leave the application and return later to update or complete any of the required information. The SSA is careful to protect your personal information.

What do I need to know?

Most of the questions on the application are about resources and income. If you are married and living with your spouse, the SSA needs to know this information about both of you. Family members, caregivers and other third parties can help you complete the application. The information below can help you decide if you are eligible and can assist you in completing the actual application for Extra Help. The worksheet is not an application.

Preparation Guide

To prepare:

  • Identify the things you own alone, with your spouse, or with someone else, but do not include your home, vehicles, burial plots, life insurance policies, or personal possessions.
  • Review all your income.
  • Gather your records in advance to save time.

The records you’ll need are:

  • Statements that show your account balances at banks, credit unions, or other financial institutions.
  • Investment statements.
  • Stock certificates.
  • Tax returns.
  • Pension award letters.
  • Payroll slips.

The SSA won’t ask for proof to support the information you provide, but they will compare your information with data available from other government agencies to make sure the figures match. The SSA needs to know information about your (and your spouse’s, if you are married and living together) resources and income.

  1. The dollar value of your resources for:
    • Bank accounts, including checking, savings, and certificates of deposit.
    • Stocks, bonds, savings bonds, mutual funds, individual retirement accounts (IRAs), or other investments.
    • Cash at home or anywhere else.
    • Any real estate other than your home.
  2. The monthly dollar amount of your income from:
    • Social Security benefits.
    • Railroad Retirement benefits.
    • Veterans benefits.
    • Other pensions or annuities.
    • Alimony.
    • Net rental income.
    • Workers’ compensation.
    • Other income (e.g., unemployment, private or state disability payments).
    • Wages.
    • Net earnings from self-employment.

If you’re an American Indian or Alaska Native

The “Resources and Income” section provides a list of what doesn’t count toward the resource and income limits for the Extra Help benefit. American Indians and Alaska Natives may have other resources and income that are excluded.

For example, Social Security will not count the following resources and income:

  • Certain distributions received by an Alaska Native from an Alaska Native Regional and Village Corporation.
  • Land held in trust by the United States for an individual Indian or tribe.
  • Funds held in trust by the Secretary of the Interior for an Indian tribe and distributed per capita to members of the tribe.
  • Up to $2,000 per year received by an American Indian that is derived from individual interests in trusts or restricted lands.
  • Payments to members of specific Indian tribes as provided by federal legislation.

You should contact Social Security for other resource and income exclusions.

If you’re a family member, caregiver, or other third party

You can help Medicare beneficiaries apply for Extra Help with their Medicare prescription drug plan costs. If you assist someone with the application, you must answer the questions as if that person were completing the application. To find out if someone is eligible, Social Security will need to know the value of his or her savings, investments, real estate (other than the home), as well as income. The SSA needs information about whomever you are helping and his or her spouse, if they are married and living together. The information in our “To prepare:” section, and “The records you’ll need are:” section, can help you with the application.

You can help someone apply for Extra Help online by visiting the SSA website or calling the toll-free number to request the Application for Extra Help with Medicare Prescription Drug Plan Costs (Form SSA-1020). You also can visit your local Social Security office for assistance.

Frequently Asked Questions

How do I choose a specific plan?

Visit Medicare.gov, and use the following tools to help you decide.

  • Compare Medicare prescription drug plans — You can find and compare the prescription drug plans in your state that meet your personal needs and enroll in the prescription drug plan you select.
  • Formulary Finder — You can enter information about the specific medications you take and get information to help you find the plans in your state that match your prescription drug needs.

To learn more about Medicare prescription drug plans and special enrollment periods, please visit Medicare.gov or call 1-800-MEDICARE.

What factors should I consider when comparing Medicare drug plan choices?

Coverage — Medicare drug plans will cover generic and brand-name drugs. Most plans will have a formulary, which is a list of drugs covered by the plan. The drugs covered by the plans can change, but the list always must meet Medicare’s requirements.

Cost — Monthly premiums and your share of prescription costs will vary depending on which plan you choose. If you qualify for Extra Help because you have limited resources and income, you will get help with some or all of these costs.

Convenience — Drug plans must contract with pharmacies in your area. Check with the plan to make sure the pharmacies in the plan are convenient for you.

How do I join a Medicare prescription drug plan?

  • On the plan’s website — Visit the drug plan company’s website. You may be able to join online.
  • On Medicare’s website — Join a drug plan at Medicare.gov using Medicare’s online enrollment center.
  • By paper application — Contact the company offering the drug plan you choose, and ask for an application. After you fill out the form, mail or fax it back to the company.
  • By phone — Call the plan or call 1-800-MEDICARE, and talk to a customer service representative.

Can state agencies help with Medicare costs?

When you file your application for Extra Help, you also can start your application process for the Medicare Savings Programs. These state programs provide help with other Medicare costs. Social Security will send information to your state unless you tell us not to on the Extra Help application. Your state will contact you to help you apply for a Medicare Savings Program.

These Medicare Savings Programs help people with limited resources and income pay for their Medicare expenses. The Medicare Savings Programs help pay for your Medicare Part B (medical insurance) premiums. For some people, the Medicare Savings Programs may also pay for Medicare Part A (hospital insurance) premiums, if any, and Part A and B deductibles and co-payments.

Medicaid or medical assistance is a joint federal and state program that helps pay medical costs for some people who have limited resources and income. Each state has different rules about eligibility and applying for Medicaid. Contact your state Medicaid office for more information.

Does Social Security Review My Eligibility?

Social Security may contact you periodically to review your status. This review will ensure that you’re still eligible for the Extra Help and still receiving all the benefits you deserve. Reviews are done every year, usually at the end of August. If you aren’t selected for a review, there will be no change in the amount of Extra Help you receive.

How will Social Security contact me?

The SSA will send you a form called Social Security Administration Review of Your Eligibility for Extra Help (SSA-1026). You’ll have 30 days to complete and return this form. Any necessary adjustments to the Extra Help will be effective in January of the following year. For example, if we send you a review form in August 2020, and you return the review form within 30 days, any necessary adjustment to your Extra Help will be effective in January 2021.

What if I need help completing the form?

Family members, caregivers, and third parties can help you complete the form. Social Security also can help answer your questions. Just call us at 1-800-772-1213. If you’re deaf or hard of hearing, please call our TTY number at 1-800-325-0778. You also may visit your local Social Security office for assistance.