Medicare Part D

Extra Help: the Medicare drug subsidy for Santa Fe

SANTA FE, N.M. — For many older adults on Medicare, prescription drugs are the line item that stings the most. A federal program called Extra Help — also known as the Low-Income Subsidy (LIS) — can quietly take a big bite out of those costs, but only if you know it exists and apply.

Here in Santa Fe, where a fixed retirement income has to stretch across rent, groceries, and utilities that keep climbing, Extra Help is one of the most useful — and most underused — parts of Medicare.

What Extra Help actually does

Extra Help is a federal program run by the Social Security Administration and Medicare. It lowers what you pay for your Part D prescription drug coverage. If you qualify, it can reduce or eliminate your Part D premium and deductible and cap what you pay at the pharmacy counter for covered drugs at a small, set amount.

As of 2024, Extra Help was expanded so that everyone who qualifies now gets the full subsidy — the old “partial” tier is gone. That change made the program simpler and more generous for people near the income cutoff.

Who qualifies in 2027

To get Extra Help, you generally need to:

• Have Medicare Part A and/or Part B,
• Live in one of the 50 states or D.C., and
• Have income and resources below the federal limits.

For 2025 (the most recent published limits from Social Security), the income cutoff is roughly 150% of the federal poverty level, and there are separate limits on resources like money in checking, savings, and stocks. Updated 2026 and 2027 figures are posted at SSA.gov/extrahelp and Medicare.gov.

A few important notes:

• Your home, one car, burial plots, and personal belongings do not count as resources.
• If you already have Medicaid, a Medicare Savings Program, or Supplemental Security Income (SSI), you are automatically enrolled in Extra Help — you don’t need to apply.
• Even if you were denied in the past, it’s worth reapplying. The rules have loosened.

How Extra Help fits with the Part D rules for 2027

Medicare’s drug benefit looks very different than it did just a few years ago. For 2027:

• Out-of-pocket spending on covered Part D drugs is capped at $2,100 in 2026 and $2,400 in 2027.
• The Part D deductible cannot exceed $615 in 2026, rising to $700 in 2027.
• The old coverage gap (“donut hole”) is gone — Part D now has three simpler phases.
• Anyone with Part D can also opt into the Medicare Prescription Payment Plan, which spreads your yearly drug costs into monthly bills instead of large hits at the pharmacy.

Extra Help sits on top of all of that. If you qualify, your costs are already far below the annual cap, and your monthly premium for a basic Part D plan is typically covered.

The local picture in Santa Fe County

Santa Fe is in Santa Fe County, where Medicare beneficiaries can choose between Original Medicare paired with a stand-alone Part D drug plan, or a Medicare Advantage plan that includes drug coverage. Plan availability is set at the county level, and the number of Part D and Medicare Advantage options shifts each year. The 2027 lineup for Santa Fe County is detailed in each plan's Annual Notice of Change and on Medicare.gov's Plan Finder.

The key thing to know: Extra Help works with any Part D plan available in the county, whether that plan is stand-alone or built into a Medicare Advantage plan. Qualifying for the subsidy doesn’t lock you into one specific plan.

New Mexico’s State Health Insurance Assistance Program (SHIP), called Benefits Counseling through the New Mexico Aging and Long-Term Services Department, offers free, unbiased one-on-one help with these decisions.

How to apply

You can apply for Extra Help three ways:

1. Online at ssa.gov/extrahelp 2. By phone at 1-800-772-1213 (Social Security) 3. In person at your local Social Security office

There is no fee to apply, and you can apply at any time of year — you do not have to wait for the fall Annual Enrollment Period (Oct. 15–Dec. 7).

If you’re approved, you can also switch or join a Part D plan outside the normal enrollment windows, thanks to a special enrollment period for people with Extra Help.

A word on IRMAA — the other end of the income scale

Extra Help is for people with modest income. On the opposite end, higher earners pay an Income-Related Monthly Adjustment Amount (IRMAA) on top of their Part B and Part D premiums. For 2026, IRMAA generally kicks in above $109,000 in income for a single filer. It doesn’t affect most Santa Fe retirees — but it’s worth knowing the system adjusts in both directions.