Medicare

By the Retiree Report Editorial Team · Updated 2026-05-04 · 7 min read

This article is general information, not medical advice. Talk with a licensed clinician before making any decision about your care.

Extra Help for Medicare Part D in 2026: who qualifies and what it pays

If you’re on Medicare and your income is modest, there’s a federal subsidy that can erase your Part D premium, kill your deductible, and cap most prescription copays at a few dollars. It’s called Extra Help — Social Security also calls it the Low-Income Subsidy, or LIS — and in 2026 a single person can earn up to roughly $23,940 a year and still qualify. Roughly a third of the people who would qualify never sign up.

What Extra Help is, and why it matters more in 2026

Extra Help pays the Part D plan premium up to a regional benchmark amount, eliminates the annual deductible, and caps your copays for covered drugs at a few dollars. According to the Social Security Administration, the program is administered jointly with the Centers for Medicare & Medicaid Services and is open to anyone enrolled in Medicare Part A or Part B who lives in the 50 states or D.C., is not incarcerated, and meets the income and resource limits.

The program got bigger in 2024. The Inflation Reduction Act eliminated the old “partial” subsidy tier, so everyone who qualifies now receives the same full benefit. As KFF documented, people earning between 135% and 150% of the federal poverty level used to receive a watered-down version with higher copays and only a partial premium subsidy. That tier is gone. Anyone under the 150% line who passes the resource test now gets the same package as the lowest-income recipients.

That change matters more in 2026 because Part D itself is cheaper for everyone. The annual out-of-pocket spending cap rises to $2,100 in 2026, and the standard deductible can be no higher than $615, AARP reports. If you also qualify for Extra Help, your share of that ceiling is far smaller — and most enrollees will never come close to hitting it.

The 2026 income and resource limits

There are two tests, an income test and a resource test, and you need to pass both. Per Social Security Administration POMS guidance, the 2026 income ceiling for the 48 contiguous states and D.C. is $23,940 a year for a single person and $32,460 for a married couple living together. That is 150% of the federal poverty level. Alaska and Hawaii have higher cutoffs because their poverty guidelines are higher.

The resource limits in 2026 are $17,600 for an individual and $35,130 for a couple. “Resources” means money you can readily get to: bank accounts, stocks, bonds, mutual funds, IRAs, and most real estate that isn’t your home. Those numbers include a $1,500-per-person allowance for burial expenses, so if you’ve seen $16,100 and $33,630 quoted elsewhere, those are the same limits without the burial set-aside.

Several common assets don’t count at all. Social Security excludes your primary home, one car, household goods, life insurance policies under a certain face value, and any property used to produce income. Social Security also disregards the first $20 of monthly unearned income and the first $65 (plus half of the rest) of monthly earned income, which is why some part-time workers who look ineligible on paper actually qualify. If you’re close to the line, do the arithmetic before assuming you’re out.

What you actually pay at the pharmacy

Once you have Extra Help, the federal government pays your Part D premium up to a regional “benchmark” — the average premium of the cheapest plans in your state. If you choose a benchmark plan, your premium is $0. If you pick a more expensive plan, you pay the difference. There is no annual deductible, and the old coverage gap, the so-called donut hole, was eliminated for everyone in 2025.

Copays in 2026 fall into three tiers, depending on how you qualify:

• Most Extra Help recipients: $5.10 for generics, $12.65 for brand-name drugs.
• Full-Medicaid recipients with income below 100% of poverty: $1.60 for generics, $4.90 for brand-name drugs.
• Residents of Medicaid-funded long-term care: $0.

Once you’ve spent enough out-of-pocket to reach the catastrophic threshold — $2,100 in 2026 for everyone, including Extra Help enrollees — your copays drop to zero for the rest of the year. That ceiling exists in theory; in practice, very few Extra Help enrollees rack up enough $5 copays to reach it.

Who’s already in, and who has to apply

Most people who qualify never have to fill out a form. If you have full Medicaid, get Supplemental Security Income, or are enrolled in a Medicare Savings Program — Qualified Medicare Beneficiary, Specified Low-Income Medicare Beneficiary, or Qualifying Individual — you are automatically “deemed” eligible. CMS sends a confirmation letter on purple paper, and your Part D plan is wired up by the system. No paperwork required.

Everyone else has to apply. There are three ways: online at SSA.gov/extrahelp, by phone at 1-800-772-1213, or on paper using Form SSA-1020, which you can mail to your local Social Security office. The form takes about half an hour and asks for your bank balances, investment values, recent income, and your spouse’s information if you’re married. Approval typically arrives within a few weeks.

A handful of mistakes derail otherwise eligible applicants. The most common is double-counting income. The first $20 a month of unearned income is excluded automatically, and the value of food, rent, or utilities provided by relatives doesn’t count. Another is overstating assets: your house, your car, and the cash value of small life insurance policies are off the table. If you’re denied and think the numbers were misread, you can appeal within 60 days and ask Social Security for a reconsideration.

How Extra Help fits with everything else

Extra Help only pays for Part D drug costs. It doesn’t help with your Part B premium, your hospital deductible, or your out-of-pocket costs in original Medicare. For those, you need either a Medicare Savings Program or a Medigap policy. A useful first step is to see whether you qualify for both Extra Help and an MSP — many people do, since the income tests are similar — and then use the Plan Finder tool on Medicare.gov to identify benchmark Part D plans in your county that will cost you nothing once you’re approved.

Picking the right Part D plan still matters once you have Extra Help. The subsidy zeros out the premium only if your plan is at or below the regional benchmark. Benchmarks shift each year — Pennsylvania’s, for instance, fell from $48.06 in 2025 to $32.71 in 2026 — so a plan that was free last year may now cost a few dollars a month. Switching during Medicare open enrollment, October 15 through December 7, restores the $0 premium. Extra Help recipients also get a Special Enrollment Period that lets them change plans once per quarter during the first three quarters of the year.

The dollar figures here are the published 2026 amounts. Social Security adjusts the income and resource thresholds annually after HHS releases new poverty guidelines, usually in early spring. If you’re reading this later in the year, double-check the current numbers on the SSA site. And if your situation is complicated — a working spouse, a recent inheritance, a small business — consider talking to a State Health Insurance Assistance Program (SHIP) counselor before you assume you don’t qualify. None of the above is medical or financial advice; it’s a description of how the program works in 2026.

What to remember

Extra Help is the most generous Part D subsidy the federal government offers, and since 2024 it’s been an all-or-nothing benefit: under the 150% federal poverty line and within the resource limits, you get the full package. No premium at a benchmark plan, no deductible, and copays measured in single dollars. The 2026 income test is roughly $23,940 for a single person and $32,460 for a couple, with resource caps of $17,600 and $35,130. If you qualify, the application takes about thirty minutes — and millions of people who could be using it never apply.