New Medicare Law Change May Enable People to Get "Extra Help" Paying for Drug Costs

A change in the Medicare law should make it easier for many Americans with lower income to obtain extra help in paying for their Medicare prescription drugs.

The extra help program currently provides assistance to more than nine million senior and disabled Americans -- saving them an average of almost $4,000 a year on their Medicare prescription drug plan costs. To apply for extra help, there is an easy-to-use online application available at www.socialsecurity.gov/extrahelp.

The Social Security Administration and Chubby Checker, the rock and roll legend, launched a new campaign to inform millions of Americans about a new “twist” in the law that makes it easier to qualify for extra help with Medicare prescription drug costs.

To qualify for extra help, people must meet certain resource and income limits. The new Medicare law eases those requirements in two ways.

First, it eliminates the cash value of life insurance from counting as a resource.

Second, it eliminates the assistance people receive from others to pay for household expenses, such as food, rent, mortgage or utilities, from counting as income.

There also is another important “twist” in the law. The application for extra help can now start the application process for Medicare Savings Programs -- state programs that provide help with other Medicare costs. These programs help pay Medicare Part B (medical insurance) premiums. For some people, the Medicare Savings Programs also pay Medicare Part A (hospital insurance) premiums, if any, and Part A and B deductibles and co-payments.

Anyone who has Medicare can get Medicare Part D prescription drug coverage. Some people with limited income and resources are eligible for Extra Help to pay for the costs–monthly premiums, annual deductibles, and prescription co-payments–related to a Medicare prescription drug plan. To qualify for Extra Help:

• You must reside in one of the 50 states or the District of Columbia.

• Your resources must be limited to $12,510 for an individual or $25,010 for a married couple living together. Resources include such things as bank accounts, stocks, and bonds. The extra help program does not count your house and car as resources; and

• Your annual income must be limited to $16,245 for an individual or $21,855 for a married couple living together. Even if your annual income is higher, you still may be able to get some help. Some examples where your income may be higher are if you or your spouse:

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

Source: Timothy L. Takacs, Elder Law Attorney, Hendersonville, Tennessee