Income and Resource Limits for the Medicare Part D Low-Income Subsidy
By Marc Gilman — July 12, 2026
For additional information, please call: (800) 927-9326 or email:
Prescription drug costs can be one of the biggest recurring expenses in retirement, and many people don’t realize there’s a federal program that can eliminate most of that cost entirely. It’s called Extra Help — also known as the Part D Low-Income Subsidy (LIS) — and it’s run jointly by Social Security and Medicare.
The catch is that qualifying depends on two separate tests: how much income you have, and how much you own. The resource side trips people up the most, especially when it comes to life insurance — so here’s exactly how both tests work for 2026.
Key Takeaways:
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Extra Help can bring your Part D premium and deductible to $0, and cap your copays at $5.10 (generic) or $12.65 (brand-name) per prescription in 2026.
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The 2026 income limit is $23,940 for an individual and $32,460 for a married couple.
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The 2026 resource limit is $18,090 for an individual and $36,100 for a married couple.
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Your home, one vehicle, personal belongings, and burial-related resources are excluded from the resource test.
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Life insurance is excluded entirely if the combined face value of all policies on one person is $1,500 or less; above that, only the policy’s cash surrender value counts — not the face value.
What Does Extra Help Actually Pay For?
Extra Help reduces or eliminates the costs that come with a standalone Part D plan or the drug coverage bundled into a Medicare Advantage plan. For 2026, if you qualify for the full benefit, you pay:
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$0 monthly plan premium
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$0 annual deductible
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Up to $5.10 for each generic drug
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Up to $12.65 for each brand-name drug
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$0 for any covered drug once your total drug costs reach the $2,100 out-of-pocket threshold for the year
You also avoid the Part D late enrollment penalty entirely while you have Extra Help, even if you didn’t sign up for Part D when you first became eligible.
Who Qualifies Automatically?
Some people don’t need to apply at all — Social Security enrolls them automatically. You’re automatically eligible for Extra Help if you have:
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Full-benefit Medicaid coverage
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Help from your state paying your Part B premium through a Medicare Savings Program
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Supplemental Security Income (SSI) payments
If none of those apply to you, you can still qualify — you’ll just need to apply directly through Social Security.
What Are the 2026 Income Limits?
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Individual: $23,940
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Married couple: $32,460
These limits are higher in Alaska and Hawaii, where the federal poverty level used to calculate them is adjusted upward. Income generally includes wages, Social Security benefits, pensions, and most other regular income — though Social Security excludes certain amounts, so it’s worth applying even if your income looks like it’s close to the line.
What Are the 2026 Resource Limits?
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Individual: $18,090
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Married couple: $36,100
This resource limit already includes an allowance of $1,500 per person set aside for burial expenses. Countable resources include things like:
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Checking and savings account balances
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Stocks, bonds, and mutual funds
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Other liquid assets you could convert to cash within about 20 days
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Real estate you own that isn’t your primary residence
What’s Excluded From the Resource Test?
Several major assets don’t count toward the resource limit at all, including:
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The home you live in
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One vehicle
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Personal belongings and household goods
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Burial plots
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Irrevocable burial contracts or prepaid burial funds
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Back payments from Social Security or SSI
How Does Life Insurance Cash Value Factor In?
This is where things get confusing, and it’s worth understanding precisely, since it can make the difference between qualifying and not.
If the combined face value of all life insurance policies you own on one person is $1,500 or less, the policy is excluded entirely — none of its value counts as a resource, regardless of cash value.
If the combined face value exceeds $1,500, only the policy’s cash surrender value counts as a resource — not the face value (the death benefit amount). Cash surrender value is what the insurance company would pay you if you canceled the policy today, before death or maturity.
A practical implication: term life insurance policies typically have no cash surrender value, so even a term policy with a large face amount generally contributes nothing to your countable resources, since there’s no cash value to count. It’s whole life, universal life, and other permanent policies that build cash value that require a closer look — the cash value (not the death benefit) is what gets counted once your combined face value crosses $1,500.
If you’re not sure how much cash value your policy has accumulated, your life insurance carrier can provide a current cash surrender value statement.
What If You’re Just Over the Limit?
Even if your income or resources are slightly above these limits, it’s worth applying. Social Security allows for certain income exclusions in the calculation, and being a small amount over doesn’t necessarily disqualify you — you may still qualify for a partial benefit, and the only way to know for certain is to apply. You can also reapply anytime your income or resources change.
How Do You Apply?
You can apply for Extra Help directly through the Social Security Administration at ssa.gov, by phone, or in person at a local Social Security office. Your local State Health Insurance Assistance Program (SHIP) can also help you apply at no cost. Applying for Extra Help doesn’t automatically enroll you in a specific drug plan — if you’re not already enrolled in one, Medicare will enroll you in a plan so you don’t miss out on the savings, and you can switch to a different plan afterward if you’d like.
Not sure whether your income and resources fall within these limits, or how a life insurance policy you own might factor in? Gilman Agency can help you think through the details before you apply.
For additional information, please call: (800) 927-9326 or email:
Sources
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Centers for Medicare & Medicaid Services, CY 2026 Resource and Cost-Sharing Limits for Low-Income Subsidy (LIS), October 31, 2025
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Social Security Administration, POMS SI 01130.300 — Developing Life Insurance Policies
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Social Security Administration, Program Operations Manual — Life Insurance
This post is for general informational purposes and is not legal or financial advice. Confirm your specific eligibility with the Social Security Administration before making coverage decisions.
