LIS stands for Low-Income Subsidy, a Medicare program also known as “Extra Help” that pays most or all of the prescription drug costs under Part D for people with limited income and resources. If you qualify, it covers your Part D plan premium, your annual deductible, and nearly all of your copayments at the pharmacy counter.
What LIS Covers
The Low-Income Subsidy is specifically tied to Medicare Part D, the prescription drug benefit. It does not help with hospital bills, doctor visits, or other medical costs. What it does cover is substantial: your monthly Part D premium drops to $0, your annual deductible drops to $0, and your copayments shrink to a few dollars per prescription.
For 2026, LIS recipients pay no more than $5.10 for each generic drug and $12.65 for each brand-name drug at a participating pharmacy. Once your total drug costs for the year reach $2,100 (including payments made on your behalf through the program), your copayments drop to $0 for the rest of the year. If you also have full Medicaid coverage and are in the Qualified Medicare Beneficiary (QMB) program, your copayments are capped even lower, at $4.90 per covered drug.
Who Qualifies
Eligibility comes down to two things: income and resources. Your income must fall below 150% of the federal poverty level. This threshold changes each year and varies by household size, so checking the current numbers through Social Security or Medicare is important.
Your countable resources must also fall under a set limit. For 2026, that limit is $18,090 for an individual or $36,100 for a married couple living together. Resources include bank accounts, stocks, bonds, mutual funds, IRAs, cash, and real estate other than your primary home.
Several things you own are deliberately excluded from the resource count: your primary home, personal possessions, vehicles, jewelry, home furnishings, life insurance policies, and burial funds. Property you use for self-support, like rental property or land where you grow food for your household, also doesn’t count. Certain lump-sum payments, including retroactive Social Security benefits, tax refunds from earned income or child tax credits, and crime victim compensation, are excluded for nine months after you receive them.
How the Inflation Reduction Act Changed LIS
Before 2024, there were two tiers of Extra Help. People with incomes between 135% and 150% of the federal poverty level received only a partial subsidy, meaning they still owed a share of their premiums and higher copayments. The Inflation Reduction Act eliminated that partial category starting January 1, 2024. Now everyone who qualifies gets the full subsidy. This was a meaningful expansion: hundreds of thousands of people who previously received partial help now pay the same low copayments as those in the full-benefit group.
How LIS Handles Your Premium
LIS covers your Part D premium, but only up to a regional benchmark amount. Each area of the country has a benchmark calculated from the average cost of basic Part D plans in that region. Plans priced at or below the benchmark are free to LIS recipients. If you choose a plan that charges more than the benchmark, or one that includes enhanced benefits beyond the standard Part D package, you’ll owe the difference. The simplest way to avoid any premium is to pick a benchmark plan, which your plan finder on Medicare.gov will flag for you.
Automatic Eligibility
Some people are automatically enrolled in LIS without filing a separate application. If you receive full Medicaid benefits, Supplemental Security Income (SSI), or help from a Medicare Savings Program, Medicare considers you “deemed eligible” and applies Extra Help to your account. You’ll receive a notice letting you know.
If you aren’t automatically enrolled but think you might qualify, you can apply through the Social Security Administration online, by phone, or at a local Social Security office. The application is free, and there’s no penalty for applying and being turned down.
Switching Plans More Often
One benefit of LIS that often goes overlooked is the flexibility it gives you to change your drug plan. Most Medicare beneficiaries can only switch Part D plans during the annual Open Enrollment Period each fall. LIS recipients can switch plans once every calendar month, with the change taking effect on the first day of the following month. This means if your plan drops a medication from its formulary or you find a plan with better pharmacy coverage, you don’t have to wait months to make a move.
There is one exception: if your Part D plan has identified you as an “at-risk beneficiary” under a drug management program, this monthly switching option is not available. Your plan will notify you by letter if that applies to you.
Why It Matters Financially
Without LIS, a standard Part D plan in 2025 carries a national average premium around $46 per month, an annual deductible before coverage kicks in, and copayments or coinsurance that can reach 25% of drug costs during the coverage phase. For someone taking multiple brand-name medications, annual out-of-pocket costs can climb into the thousands. With LIS, those same prescriptions cost a few dollars each, and total annual spending on drugs is capped at a fraction of what unsubsidized enrollees pay. For people living on a fixed income, the difference between having Extra Help and not having it can determine whether they fill their prescriptions at all.