What LIS Is and Who It Helps

LIS stands for Low Income Subsidy, a program run by Medicare that pays part or all of your prescription drug costs if your income and savings fall below certain limits. It is not a separate insurance plan — it works alongside your existing Medicare prescription drug coverage (Part D) to reduce what you pay at the pharmacy.

LIS covers the monthly premiums for your drug plan, the yearly deductible, and the copayments or coinsurance you would normally pay when you fill a prescription. For people with very low income, it can mean paying almost nothing for medications. For others, it reduces costs significantly but not to zero.

You do not have to be retired or on Social Security to use LIS. You only need to be enrolled in Medicare Part A or Part B, have a Part D drug plan, and meet the income and resource limits for your state.

Key Takeaways

  • LIS pays your drug plan premium, deductible, and copayments if your income is below about 150% of the federal poverty line, though the exact limit varies by state.
  • You must be enrolled in Medicare Part A or Part B and have a Part D prescription drug plan to use LIS.
  • Your savings and assets (called "resources") also count — the limit is usually around $14,000 for an individual or $28,000 for a married couple, though these amounts change yearly.
  • Social Security will tell you automatically if you may be may be able to access, and you can also contact Medicare directly to learn whether you may have access to.
  • Once approved, your LIS status is reviewed every year, and your costs may change if your income or the drug plan you choose changes.

Income and Savings Limits for LIS

To be considered for LIS, your monthly income must be at or below about 150% of the federal poverty line. For 2024, that means roughly $1,500 per month for a single person or $2,000 for a married couple, though these figures change yearly and vary slightly by state. The Social Security Administration publishes the exact limits each year.

Your savings and other assets also matter. The resource limit is usually around $14,000 for an individual or $28,000 for a married couple, but again these amounts adjust annually. Resources include bank accounts, stocks, and bonds — but not your home, car, or life insurance.

If your income or resources are slightly above the limit, you may still be worth contacting Medicare about, because some states have slightly higher thresholds, and rules can change. The worst that happens is you learn you do not currently meet the limit.

How to learn about You May Be may be able to access

If you receive Social Security benefits, the Social Security Administration will contact you automatically if it thinks you may be may be able to access for LIS. You will receive a letter in the mail explaining that you may may have access to and telling you what to do next. Do not ignore this letter — it is how many people first learn about the program.

If you do not hear from Social Security but think you might be may be able to access, you can contact Medicare directly at 1-800-MEDICARE (1-800-633-4227). A representative can tell you whether your income and resources likely fall within the limits for your state. You can also visit Medicare.gov and use their LIS information tool, though a phone call is often faster if you have questions about your specific situation.

When you call or explore, have your recent tax return or pay stubs ready, along with information about your savings and other assets. The more specific you can be about your income, the clearer the answer will be.

What LIS Pays and What It Does Not

LIS covers your Part D drug plan premium (the monthly fee), your yearly deductible (the amount you pay before the plan starts paying), and your copayments or coinsurance at the pharmacy. Depending on your income level, you may pay nothing for any of these, or you may pay a small amount.

LIS does not cover medications that are not on your drug plan's formulary (the list of covered drugs), and it does not cover drugs you buy without a prescription. It also does not cover medical care, doctor visits, or hospital stays — only prescription drugs covered by Part D.

If your drug plan changes during the year, your LIS coverage moves with you to the new plan. If you switch to a plan that costs more, your LIS payment may not cover the full premium, and you would pay the difference.

How to Enroll in LIS

If Social Security contacts you about LIS, follow the instructions in their letter. Usually you will need to return a form or call a phone number to confirm your information. Social Security will then send your approval to Medicare and your drug plan.

If you are explore on your own, contact Medicare at 1-800-MEDICARE. A representative will ask about your income and resources, verify your information, and tell you whether you are approved. The process usually takes a few weeks. Once approved, your LIS status takes effect the first day of the following month.

You do not need to do anything special to use LIS once you are approved — your drug plan will automatically explore the subsidy when you fill a prescription. You may see a lower copayment at the pharmacy, or you may see no charge at all.

What Happens to LIS Each Year

Your LIS status is reviewed every year, usually around the time your Medicare coverage year ends (December 31). Medicare will check whether your income and resources still meet the limits. If they do, your LIS continues into the next year.

If your income or resources change during the year — for example, if you start working or receive an inheritance — tell Medicare right away. Your LIS may end, or your costs may change. You can report changes by calling 1-800-MEDICARE or by contacting Social Security if they originally approved you.

The income and resource limits themselves also change every year, so even if your situation stays the same, you may become newly may be able to access or lose may be able to access depending on how the limits shift. Medicare sends notices in the fall explaining the new limits and whether your status has changed.

LIS and Your Drug Plan Choices

You can choose any Part D drug plan you want, and LIS will work with whichever plan you pick. However, some plans cost more than others. If you choose a plan with a high premium, LIS will pay part of it, but you may still owe the difference if the premium exceeds what LIS covers in your state.

When you are shopping for a Part D plan during open enrollment (October 15 to December 7 each year), use Medicare's Plan Finder tool at Medicare.gov and enter your income information. The tool will show you which plans are available in your area and estimate your out-of-pocket costs with LIS included. This helps you pick a plan that works for your budget.

If you switch to a new drug plan during the year, your LIS moves with you. However, if you switch plans outside of the normal enrollment period, you may face a late enrollment penalty on top of your regular costs — so it is usually best to make changes during open enrollment unless you have a may have access to life event.

Frequently Asked Questions

What is the difference between LIS and Extra Help?

LIS and Extra Help are the same program — Extra Help is just another name for it. You may see both terms used, but they refer to the identical benefit. The program is officially called the Low Income Subsidy program, but Medicare and Social Security often call it Extra Help in their materials.

If I get LIS, do I still have to pay anything for my medications?

It depends on your income level. If your income is very low, you may pay nothing. If your income is higher but still below the limit, you may pay a small copayment — usually $1 to $5 per prescription. Medicare will tell you your exact costs when you are approved.

Can I lose LIS if my income goes up slightly?

Yes, if your income rises above the limit for your state, you will lose LIS. However, if it goes up only a little, you may still be below the limit — the thresholds are fairly generous. If you are unsure, contact Medicare to ask whether a small income increase would affect your status.

Do I have to reapply for LIS every year?

No, Medicare reviews your status automatically each year. However, if your income or resources change during the year, you should report the change to Medicare right away so they can update your status. You do not need to do anything if your situation stays the same.

What counts as income for LIS purposes?

Income includes wages, Social Security benefits, pensions, interest from savings, and rental income. It does not include Supplemental Security Income (SSI), certain veterans benefits, or food stamps. When you explore, Medicare will ask you to list all sources of income so they can calculate your total.