More Medicare beneficiaries will qualify for extra help with their prescription drug costs thanks to changes to Medicare’s Low-Income Subsidy Program (also known as LIS or Extra Help) that will take effect this year. If approved for the program, you would pay no more than $2.50 for generic drugs and $6.30 for each brand name drug. Changes in the law make it easier for Medicare beneficiaries to qualify for Extra Help by changing the way income and assets are counted in 2010. Life insurance policies will no longer be counted as a resource. Help received from family and friends to pay for household expenses, such as food, mortgage, rent, and utilities, will no longer be counted as income.

I am already on Medicare and Medicaid. Does this change affect me?

No. If you are dually eligible (meaning you receive both Medicare and Medicaid), you should not have any co-pay for your prescriptions, so you do not need this program.

I applied for Extra Help before and was denied. Should I try again?

Yes. Even if you were turned down for LIS/Extra Help before, you should reapply.

Will this change help me with my Medicare premiums?

No. This change impacts prescription co-pays only—not premiums. However, if you are a dual eligible, or your income and resources are low enough to qualify as a specified low-income Medicare beneficiary, your Part D premium should be paid for you by applying through the Medicaid or PAAD program.

I already receive help through PAAD. Should I apply for Extra Help, too?

It depends. If your income and resources are low enough to qualify for LIS/Extra Help, you may pay less for your co-pays than under PAAD.

How do I qualify for Extra Help?

To qualify, your income must be less than $16,245 a year for an individual ($21,855 for married couples) and your resources must be less than $12,510 ($25,010 for married couples). Resources include bank accounts, stocks, and bonds but do not include houses, cars, or life insurance policies

How do I apply for Extra Help?

You can apply for Extra Help online at A new "twist" in the law makes it easier to save on your prescription drug costs (from Social Security online) or call Social Security at 1-800-772-1213 and ask for the Application for Help with Medicare Prescription Drug Plan Costs.

This article originally appeared in the July-August 2010 issue of Looking Out for Your Legal Rights^®.

This information last reviewed 7/19/10.