Changes to US Medicare provide assistance to help low-income beneficiaries get big savings on Rx drug costs

Under changes being made to the USA's Medicare's Low-Income Subsidy Program for Part D prescription drug costs (also known as LIS or "Extra Help") that take effect this year. Medicare beneficiaries who qualify for "Extra Help" may be eligible to pay no more than $2.50 for generic drugs and $6.30 for each brand name. These changes make it easier for people on Medicare with limited incomes to save on their drug costs.

The Centers for Medicare and Medicaid Services (CMS) estimates that "Extra Help" can save eligible Medicare beneficiaries - that is people aged over 65 -  as much as $3,900 per year. It is estimated that over 1.8 million people with Medicare may be eligible for "Extra Help" but are not currently enrolled to take advantage of these savings.

Changes resulting from the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) make it easier for Medicare beneficiaries to qualify for "Extra Help" by changing the way income and assets are counted in 2010. When determining eligibility for "Extra Help", the Social Security Administration, who handles enrollment in the program, will no longer count life insurance policies as a resource. In addition, help received from family and friends to pay for household expenses like food, mortgage, rent and utilities will no longer count as income.