Important Update: Medicare Enrollees Could Lose Financial Assistance for Drug Costs if they Do Not Act

Approximately 1.4 million Medicare enrollees received notices this fall that they may lose help paying for medications through the Low-Income Subsidy, also known as LIS or “Extra Help.” Individuals who receive these notices are those who lost Medicaid coverage between July 1, 2023, and June 30, 2024.

They will remain LIS eligible through December 31, 2024, but will lose coverage starting January 1, 2025, unless they reapply for LIS through the Social Security Administration or reestablish Medicaid eligibility. The financial eligibility criteria for LIS are broader than those for Medicaid. Accordingly, even if someone is no longer eligible for Medicaid, they may still qualify for LIS.

Approximately 110,000 people in California, 105,000 in Texas, and 88,000 in Florida will receive these notices (see state chart, below).

The Low-Income Subsidy Program

The Low-Income Subsidy, known as LIS or “Extra Help,” is a program administered by the Social Security Administration (SSA) that provides financial assistance with Medicare Part D prescription drug costs, including premiums and co-pays.

Each year in September, some individuals with LIS will receive notices from Medicare informing them that their LIS is ending at the end of the year and that they will need to reenroll with SSA to continue to receive financial assistance with their Medicare drug costs.

These notices are specific to individuals who were deemed eligible for LIS because they were eligible for Medicaid or a Medicare Savings Program (MSP). When these individuals lose their Medicaid or MSP eligibility—as happened at high rates in 2023 and 2024 due to the Medicaid unwinding—they also lose their LIS eligibility. Because of the way LIS works, a person typically loses LIS many months after they lose Medicaid or MSP.

It is extremely important for individuals who receive a notice from Medicare about their LIS ending to reapply for LIS coverage as soon as possible to ensure they continue to receive assistance with Part D drug costs in 2025. Individuals not eligible for LIS may want to consider choosing a different Part D plan that is more affordable.

For more information on LIS and Medicaid unwinding, read the updated Justice in Aging fact sheet. 

State-by-State Overview of Medicare Enrollees Receiving Notices

Here’s a state-by-state chart of the number of Medicare enrollees receiving notices that they will lose deemed LIS status, and can take steps to retain LIS coverage (numbers rounded to the closest hundred):