8.1 Low-Income Subsidy (LIS) / Extra Help

AHIP Medicare Certification Exam

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1 Introduction

1.1 About the AHIP Medicare Certification Exam 1.2 How to Use This Study Guide

2 Chapter 2: Medicare Program Fundamentals

2.1 What Medicare Is: Program Structure & How Parts A–D Fit Together 2.2 Medicare Part A — Hospital Insurance 2.3 Medicare Part B — Medical Insurance 2.4 Medicare Eligibility Rules (Age 65, Disability, ESRD, ALS)

3 Chapter 3: Medicare Enrollment Periods

3.1 Initial Enrollment Period (IEP) 3.2 Annual Enrollment Period (AEP): October 15 – December 7 3.3 Medicare Advantage Open Enrollment Period (MA OEP): January 1 – March 31 3.4 Special Enrollment Periods (SEPs) & Qualifying Life Events 3.5 Late Enrollment Penalties (Part A, Part B, Part D)

4 Chapter 4: Medigap & Coordination of Coverage

4.1 Medigap (Medicare Supplement) Basics & Guaranteed Issue Rights 4.2 Dual Eligibility & Medicare Savings Programs 4.3 How Original Medicare, MA, Part D & Medigap Interact

5 Chapter 5: Medicare Advantage Plan Types

5.1 Medicare Advantage (Part C) Overview: How MA Differs from Original Medicare 5.2 HMO & HMO-POS Plans 5.3 PPO Plans 5.4 PFFS Plans (Private Fee-for-Service) 5.5 MSA Plans (Medicare Medical Savings Accounts) 5.6 Cost Plans & Employer Group Waiver Plans (EGWPs)

6 Chapter 6: Special Needs Plans & MA Plan Design

6.1 Special Needs Plans (SNPs) Overview 6.2 D-SNP — Dual-Eligible Special Needs Plans 6.3 C-SNP & I-SNP — Chronic Condition & Institutional Special Needs Plans 6.4 MA Benefits, MOOP & Supplemental Benefits 6.5 MA Star Ratings & Plan Quality

7 Chapter 7: Part D Structure & the 2026 Redesign

7.1 Part D Overview & Eligibility 7.2 Formularies & Drug Tiers 7.3 The 2026 Part D Benefit Redesign ($2,100 OOP Cap, $615 Max Deductible, Catastrophic Phase) 7.4 Medicare Prescription Payment Plan (Drug-Cost Smoothing)

8 Chapter 8: Part D Costs, Assistance & Appeals

8.1 Low-Income Subsidy (LIS) / Extra Help 8.2 Part D Late Enrollment Penalty & Creditable Coverage 8.3 Coverage Determinations, Exceptions & Appeals

9 Chapter 9: CMS Marketing Rules & Scope of Appointment

9.1 CMS Medicare Communications & Marketing Guidelines (MCMG) Overview 9.2 Scope of Appointment (SOA): the 48-Hour Rule & Exceptions 9.3 Permitted vs. Prohibited Marketing & Sales Activities 9.4 Marketing Events vs. Educational Events

10 Chapter 10: Enrollment & Disclosure Requirements

10.1 The Pre-Enrollment Checklist (PEC) 10.2 Enrollment Procedures & Application Requirements 10.3 Call Recording & Third-Party Marketing Organization (TPMO) Disclaimers 10.4 Agent & Broker Compensation Rules

11 Chapter 11: Marketing Conduct & Oversight

11.1 Cross-Selling Restrictions & Nominal Gift Value Rules 11.2 Marketing to Vulnerable Populations & Non-Discrimination in Sales 11.3 Website, Social Media & Advertising Compliance 11.4 Complaint Tracking Module (CTM) & Agent Oversight

12 Chapter 12: Understanding Fraud, Waste & Abuse

12.1 Defining Fraud, Waste & Abuse (and the Difference Between Them) 12.2 The False Claims Act 12.3 The Anti-Kickback Statute

13 Chapter 13: Compliance Laws & Screening

13.1 The Stark Law (Physician Self-Referral) 13.2 HIPAA Privacy & Security Basics 13.3 The OIG Exclusion List & Sanctioned-Provider Screening

14 Chapter 14: Reporting, Compliance Programs & Consequences

14.1 Detecting & Reporting FWA 14.2 Compliance Program Requirements (Seven Core Elements) & Non-Discrimination Training 14.3 Consequences & Corrective Action Plans

8.1 Low-Income Subsidy (LIS) / Extra Help

Key Takeaways Explain This Topic AI

2026 Extra Help eligibility requires annual income at or below $23,475 (single) or $31,725 (married), with resources at or below $18,090 (single) or $36,100 (married).

Since the 2024 IRA change, the partial-subsidy tier no longer exists — every LIS-qualified beneficiary receives the full subsidy in 2026.

Full LIS caps 2026 copays at $5.10 for generics and $12.65 for brand-name drugs, with $0 costs after the $2,100 out-of-pocket cap is reached.

Full-benefit dual eligibles, SSI recipients, and Medicare Savings Program enrollees are automatically deemed eligible; everyone else must apply through SSA or their state Medicaid agency.

LIS/dual-eligible beneficiaries get a continuous, once-per-month Special Enrollment Period to change Part D or MA-PD plans, unlike the general Medicare population.

Last updated: July 2026

Why the Low-Income Subsidy Matters on the AHIP Exam

The Low-Income Subsidy (LIS) , almost universally called Extra Help , is one of the highest-yield topics inside Module 3 (Part D Prescription Drug Plans, 15% of the final). AHIP exam writers use LIS to test two different skills at once: whether you know the federal eligibility math, and whether you understand the agent's limited, compliance-bound role once a beneficiary qualifies. Roughly a quarter of all Part D enrollees receive some form of Extra Help, and dual-eligible beneficiaries are one of the "vulnerable populations" singled out for extra marketing protections in Module 4 — so LIS is a bridge topic that shows up again later in the guide.

Extra Help is federal financial assistance, funded through the Social Security Administration (SSA) and CMS, that reduces or eliminates a beneficiary's Part D premium, annual deductible, and per-prescription copays. It is not a separate insurance plan — it is a subsidy layered on top of whatever stand-alone Prescription Drug Plan (PDP) or Medicare Advantage Prescription Drug (MA-PD) plan the beneficiary is enrolled in.

2026 Eligibility Thresholds

Since Section 11404 of the Inflation Reduction Act (IRA) took effect January 1, 2024, the old two-tier "full" and "partial" subsidy structure is gone. Everyone who qualifies for Extra Help in 2026 receives the full subsidy — there is no more sliding-scale partial benefit. Eligibility is set at 150% of the Federal Poverty Level (FPL), with a resource test:

Filing Status 2026 Annual Income Limit 2026 Resource Limit
Single $23,475 $18,090
Married, living together $31,725 $36,100

The resource limit already nets out the $1,500-per-person burial-expense allowance CMS permits, so agents should not add it again when estimating eligibility. Resources counted include bank accounts, stocks, and bonds; a primary residence, vehicle, and personal burial plot are excluded.

What Full Extra Help Covers in 2026

Cost Component What the LIS Beneficiary Pays
Monthly Part D premium $0, up to the regional low-income premium benchmark
Annual deductible $0
Generic drug copay Capped at $5.10
Brand-name drug copay Capped at $12.65
Costs after the $2,100 out-of-pocket cap $0 for the rest of the year

If a beneficiary chooses a plan whose premium is above the regional benchmark, Extra Help only covers up to the benchmark amount — the beneficiary pays the difference. This is a frequent exam trap: Extra Help does not automatically mean a $0 premium on every plan, only on benchmark plans.

"Deemed Eligible" vs. Beneficiaries Who Must Apply

CMS automatically enrolls (or "deems") certain beneficiaries into Extra Help with no application required:

Full-benefit dual eligibles — enrolled in both Medicare and full Medicaid
Supplemental Security Income (SSI) recipients who don't also have full Medicaid
Medicare Savings Program (MSP) enrollees — QMB, SLMB, QI, or QDWI

Everyone else who believes they qualify must actively apply — either through the Social Security Administration (online, by phone, or by mail) or through their state Medicaid agency. This distinction matters for the exam: agents can and should educate a client about the existence of Extra Help and refer them to SSA or Medicaid, but agents do not process LIS applications or make eligibility determinations themselves.

Deemed-eligible status is redetermined every year. A beneficiary who loses Medicaid or MSP eligibility receives a Loss of Deemed Status (LDS) notice (on grey paper) and typically keeps Extra Help through the end of that calendar year, with a chance to requalify. When CMS or a state cannot immediately confirm a beneficiary's status electronically, plans must apply the Best Available Evidence (BAE) policy — temporarily honoring the beneficiary's own proof (an award letter, Medicaid card, etc.) rather than making them pay full price while the systems catch up.

The Continuous Special Enrollment Period

Because their subsidy status can change, LIS/Extra Help beneficiaries (along with dual eligibles and institutionalized enrollees) get a valuable perk the general Medicare population does not: a once-per-month Special Enrollment Period to switch Part D or MA-PD plans. An agent helping a dual-eligible client should never tell them they have to "wait for AEP" — that is both factually wrong and a compliance risk under the non-discrimination marketing rules covered in Chapter 11.

Worked Scenario

Mrs. Alvarez, single, has an annual income of $21,000 and $12,000 in countable resources. She is not on Medicaid. Because her income and resources are both under the 2026 single thresholds ($23,475 / $18,090), she is a strong candidate for Extra Help — but because she is not deemed-eligible (no Medicaid, no SSI, no MSP), she must file an application with SSA or her state Medicaid office. Until that application is approved, she is not entitled to the $0 premium/deductible or capped copays, and the agent's job is limited to explaining the program and pointing her to the correct application channel.

Key Exam Traps

Confusing Extra Help (federal, drug-cost subsidy) with a Medicare Savings Program (state-administered, covers Part A/B premiums and cost-sharing) — they overlap but are not the same program, and MSP enrollees happen to be automatically deemed eligible for LIS.

Assuming a $0 premium applies to any plan choice — it only applies up to the regional benchmark.

Forgetting that the partial-subsidy tier no longer exists as of 2024; any exam answer describing a "partial LIS" percentage-based copay structure is describing the pre-IRA rules and is wrong for 2026.