Mary Johnson, Editor
About one in five Medicare beneficiaries (21%) who participated in TSCL’s Senior Priority Plan Survey conducted from May - July, report that they filed an application for Medicare Extra Help over the past 18 months. Medicare Extra Help is the federal program that helps with prescription drug costs. Under current law, eligible individuals having limited income and savings may qualify.
Depending on income, Medicare Extra Help offers valuable benefits. The Social Security Administration estimates that the coverage is worth about $5,100 per year. Here’s what’s covered:
- Your Part D plan monthly premium, up to a specific amount set by your state.
- A portion of your out-of-pocket costs and spending on prescription drugs.
- The Part D late enrollment penalty, which is applied to Part D premiums if you delayed enrollment in Part D.
Currently the program pays full benefits for those with incomes up to 135% of the federal poverty level ($18,347 yr.) individual/ ($24,719 yr.) couple. But those with incomes between 135% and 150% of the federal poverty level, ($20,628 yr.) individual/ ($27,465 yr.) couple receive partial benefits, leaving many low-income older adults with some high prescription costs. With the passage of the Inflation Reduction Act, Medicare recipients with incomes between 135% and 150% of the federal poverty level will be eligible to receive full assistance with their Medicare Part D premiums, deductibles, and cost-sharing, starting in 2024.
The timing of this is particularly important for people whose incomes may be on the borderline now for full benefits. This group who currently have incomes on the high side of 135% of the federal poverty level range, could potentially get bumped into the 150% range of partial benefits in 2023 due to an 8.7% cost-of-living adjustment (COLA). While this group may see their Medicare Extra Help benefits trimmed for 2023, if their income stays within the 150% range for 2024, they can look forward to full Medicare Extra Help benefits in 2024.
How have you been impacted by inflation and our economy in 2022? Please let us know by taking TSCL’s new 2022 Retirement Survey. And thanks for your help!