How to Use Medicare Extra Help to Lower Generic Prescription Costs

If you’re on Medicare and take generic drugs every month, you might be paying way more than you need to. The Medicare Extra Help program can cut your prescription costs to as little as $1.60 per pill - and in many cases, you pay nothing for your monthly premium or deductible. Yet, nearly 4 out of 10 people who qualify don’t even apply. This isn’t about luck or guessing. It’s about knowing exactly how Extra Help works for generic medications and using it right.

What Medicare Extra Help Actually Covers for Generics

Extra Help, also called the Part D Low-Income Subsidy, doesn’t just give you a discount. It removes nearly all out-of-pocket costs for prescription drugs. In 2025, if you qualify, you pay:

• $0 for your Medicare Part D plan premium
• $0 for your annual deductible
• Up to $4.90 for each generic drug
• Up to $12.15 for each brand-name drug

That’s it. No surprises. No hidden fees. Even if your drug normally costs $50, you pay $4.90. If you take 12 different generics every month, that’s $588 a year instead of over $1,500 under standard Part D. For people with diabetes, high blood pressure, or cholesterol, that adds up to thousands saved every year.

There’s an even better tier: if you’re enrolled in both Medicare and Medicaid and your income is below 100% of the Federal Poverty Level, you pay only $1.60 per generic prescription. That’s less than the cost of a coffee.

Who Qualifies for Extra Help in 2025

Eligibility isn’t based on how old you are or how sick you are. It’s based on income and resources - and the numbers are exact.

For 2025, you qualify if:

• Your annual income is $23,475 or less (individual)
• Your annual income is $31,725 or less (married couple living together)
• Your resources are $17,600 or less (individual)
• Your resources are $35,130 or less (married couple)

Resources include bank accounts, stocks, bonds, mutual funds, and IRAs. But here’s what doesn’t count: your home, one car, household goods, and up to $1,500 set aside for burial expenses. Many people think their savings disqualify them, but if it’s under $17,600 and you don’t own extra property, you’re likely eligible.

Income includes Social Security, pensions, wages, and veteran benefits. But it doesn’t include housing assistance, food stamps, or Medicaid payments. If you’re unsure, the Social Security Administration lets you use their online calculator to estimate eligibility before applying.

How Extra Help Beats Standard Medicare Part D

Without Extra Help, you’re stuck with the full Part D structure:

• $595 deductible before coverage starts
• 25% coinsurance on generics after deductible
• Premiums averaging $35 per month
• Pay full price in the coverage gap (donut hole)

Let’s say you take three generic drugs that cost $40 each. Without Extra Help:

• You pay $595 deductible first
• Then 25% of $120 = $30 per month
• That’s $360 a year in copays
• Plus $420 in annual premiums
• Total: $1,375

With Extra Help:

• $4.90 x 3 drugs x 12 months = $176.40
• $0 premium, $0 deductible
• Total: $176.40

You save $1,200 a year - just for three pills. Multiply that by six or eight prescriptions, and you’re talking about real financial relief.

How to Apply - Step by Step

You don’t need a lawyer or a financial advisor. You can apply in under 15 minutes.

1. Go to ssa.gov/extrahelp and click "Apply for Extra Help"
2. Fill out the online form - it asks for income, assets, and Social Security number
3. Submit. You’ll get a letter in 3-6 weeks

If you can’t use the internet, call 1-800-772-1213. You can also visit your local Social Security office. No appointment needed.

Here’s the secret: if you already get Supplemental Security Income (SSI), Medicaid, or a Medicare Savings Program, you’re automatically enrolled. No paperwork required. Check your mail - you should have received a notice.

Free help is available nationwide through State Health Insurance Assistance Programs (SHIPs). They’ll walk you through the form, check your numbers, and even call Social Security for you. Find yours at shiptacenter.org.

What Happens Every Year - The Annual Review

Extra Help isn’t a one-time thing. Every August, you’ll get a form in the mail called the "Continued Eligibility Worksheet." This is not optional.

If you don’t return it by the deadline (usually 30 days after mailing), your Extra Help ends on January 1 of the next year. That means your copays jump from $4.90 to $30+ overnight. Your premium comes back. Your deductible returns.

Many people lose benefits not because they earned too much - but because they ignored the letter. Set a calendar reminder for early August. If your income changed (like a raise, pension increase, or one-time payment), update it on the form. Even if you think you’re over the limit, submit it anyway. Sometimes, Social Security can still approve you with a hardship exception.

Common Mistakes and How to Avoid Them

Here’s what goes wrong - and how to fix it:

• Mistake: "I made $500 too much, so I’m not eligible." Fix: The income limit is annual. If your income spiked in one month but dropped later, report the full year. Social Security looks at your total income over 12 months, not monthly.
• Mistake: "I have $20,000 in savings." Fix: That’s only a problem if it’s in a taxable account. Retirement accounts like IRAs are counted, but your primary home and one car aren’t. Don’t assume you’re disqualified.
• Mistake: "I didn’t know about this." Fix: 37% of eligible people don’t enroll. You’re not alone. Talk to your pharmacist, a SHIP counselor, or AARP. They see this every day.
• Mistake: "I’m on Medicaid, so I don’t need it." Fix: Medicaid doesn’t always cover all your Part D costs. Extra Help fills the gaps. Enroll anyway.

Real Stories - What Happens When People Use Extra Help

One woman in Ohio, 78, takes six generic medications for heart disease and diabetes. Before Extra Help, she skipped doses because she couldn’t afford $80 a month. After applying, her copay dropped to $4.90 per pill. She told her SHIP counselor: "I finally feel like I can live without choosing between food and medicine."

Another man in Florida, 82, got cut off because his Social Security increased by $60 a month. He thought he was over the limit. He didn’t reapply. His monthly drug bill went from $10 to $120. He ended up in the ER with a stroke - because he stopped taking his blood thinner. He re-applied after hospital discharge. Benefits were reinstated retroactively. He’s alive today because he finally got help.

These aren’t rare cases. The Medicare Payment Advisory Commission found that Extra Help recipients are 23 percentage points more likely to take their meds as prescribed. That’s not just savings. That’s lives saved.

What’s Changing in 2025 and Beyond

This year, the "donut hole" is gone for Extra Help beneficiaries. That means no more paying full price after hitting your coverage limit. You stay in the low-cost tier all year.

Also, insulin is capped at $35 a month for everyone on Medicare - including those with Extra Help. So if you take insulin, you’re paying $1.60 or $4.90 - not $35. You’re already getting the best rate possible.

The Biden administration is pushing to expand Extra Help to people earning up to 175% of the poverty level. That would raise the income limit to about $28,500 for a single person. If that passes, over a million more seniors could qualify. Keep an eye on news in early 2026 - this could change everything.

What to Do Right Now

If you take any generic prescription and pay more than $10 per pill, you should check your eligibility. It takes less than 10 minutes. Here’s your checklist:

• Do you take at least one generic drug monthly?
• Do you pay more than $50 a month out-of-pocket for prescriptions?
• Is your income under $23,475 (or $31,725 if married)?
• Do you have less than $17,600 in savings and investments (excluding home and car)?

If you answered yes to any of these, apply today. Don’t wait for the letter. Don’t assume you don’t qualify. Call Social Security. Visit your local SHIP office. Ask your pharmacist. Use the online tool.

Medicare Extra Help exists to make sure no one has to choose between medicine and groceries. You don’t have to be poor to deserve it. You just have to be willing to ask.