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Help Paying for Medicare: Extra Help, MSPs, Medicaid, and PACE

How Extra Help, the four Medicare Savings Programs, Medicaid dual eligibility, and PACE can lower Medicare costs in 2026 — and where to apply.

Last reviewed: July 2026

The help many people never claim

Medicare is not free. In 2026, the standard Part B premium is $202.90 a month, the Part B deductible is $283 a year, and drug plans add their own premiums and copays. (Our guide to 2026 Medicare costs walks through the full list.) For people on fixed or limited incomes, several government programs can wipe out much of that bill — but they only work if you apply, and enrollment counselors consistently report that large numbers of eligible people never do. This guide covers the four main routes to lower costs: Extra Help for drug expenses, the Medicare Savings Programs, full Medicaid ("dual eligibility"), and PACE.

Extra Help: lower drug costs through Social Security

Extra Help — officially the Part D Low-Income Subsidy, or LIS — is a federal program run by the Social Security Administration that pays most of the cost of Medicare drug coverage. Since 2024, everyone who qualifies receives the full subsidy; the old "partial" tier is gone. If you qualify in 2026, you generally pay:

Social Security estimates the benefit is worth about $5,700 per person per year on average. To qualify in 2026, your income must generally be below about $23,940 for an individual or $32,460 for a married couple living together (roughly 150% of the federal poverty level), with resources below $16,590 for an individual or $33,100 for a couple (a standard allowance for burial expenses effectively raises these to $18,090 and $36,100). The limits can effectively be higher if you work, support other family members at home, or live in Alaska or Hawaii — so apply even if you think you're slightly over. Your home, one vehicle, and personal belongings do not count toward the resource limit; bank and investment accounts do.

If you have Medicaid, Supplemental Security Income (SSI), or one of the QMB, SLMB, or QI Medicare Savings Programs described below, you get Extra Help automatically — no separate application. Everyone else applies through Social Security at ssa.gov/extrahelp or by calling 1-800-772-1213. Qualifying also opens a Special Enrollment Period to join or switch drug plans during the year; see our guides to Part D drug coverage and Medicare enrollment periods.

Medicare Savings Programs: help with premiums and cost sharing

The Medicare Savings Programs (MSPs) are run by state Medicaid agencies but are separate from full Medicaid. They use federal baseline income bands tied to the federal poverty level, though states are allowed to be more generous — several have raised their limits or dropped the asset test entirely. There are four programs:

Because state rules differ so much, don't rule yourself out based on a national chart — check with your state Medicaid office or your SHIP counselor. And remember the bonus: enrolling in QMB, SLMB, or QI automatically enrolls you in Extra Help for drug costs (QDWI does not carry this automatic link).

Medicaid and dual eligibility

People who qualify for both Medicare and Medicaid are called "dually eligible." Medicare pays first for services both programs cover; Medicaid can then pick up costs Medicare leaves behind and may cover services Medicare largely doesn't, such as long-term nursing home care and home- and community-based services — a major gap discussed in our guide to what Medicare doesn't cover. Full-benefit duals get Extra Help automatically, and their drug coverage comes through a Medicare Part D plan rather than Medicaid.

Medicaid eligibility rules — income, assets, and how long-term care is treated — vary significantly by state, and some MSP enrollees are "partial duals" who get premium help without full Medicaid benefits. Many states also offer Medicare Advantage plans designed specifically for duals (Dual Eligible Special Needs Plans); whether one fits your situation depends on your personal circumstances, so compare carefully using our Medicare Advantage vs. Original Medicare guide, Medicare.gov, or your SHIP.

PACE: all-in-one care for people who need nursing-home level care

The Program of All-Inclusive Care for the Elderly (PACE) is a joint Medicare-Medicaid program available in some states. It provides comprehensive medical and social services — doctors, drugs, therapy, adult day care, transportation, meals, and more — so that people who would otherwise need a nursing home can keep living in the community. To join, you generally must be 55 or older, live in a PACE organization's service area, be certified by your state as needing nursing-home level care, and be able to live safely in the community with PACE support. People with Medicaid typically pay no premium for the long-term care portion; those without Medicaid pay a monthly premium. PACE enrollees get drug coverage through the program and don't need a separate Part D plan.

How and where to apply

One caution: applying for these programs is always free. Anyone who charges a fee to "enroll" you, or calls unprompted asking for your Medicare or bank details, is a red flag — see our guide to avoiding Medicare scams. If you're new to Medicare's structure, start with Medicare's parts explained. Whether any of these programs fits your situation depends on your income, assets, health needs, and state — that's exactly the kind of question a SHIP counselor can answer for free.

Sources

This guide is for general education only and is not medical, legal, insurance, or financial advice. For decisions about your own coverage, use official sources or free help from your SHIP counselor.