CMS updates resource, cost-sharing limits for Low-Income Subsidy in 2026

Each year, the Centers for Medicare and Medicaid Services determines income and resource eligibility thresholds for the Low-Income Subsidy (LIS) program. LIS, or Extra Help, reduces the amount eligible Medicare beneficiaries spend on prescription drugs. The subsidy can pay for plan premiums and some or all of the cost-sharing responsibility the beneficiary might have.  It also suspends any Part D late enrollment penalty for as long as a client stays on Extra Help. Medicare beneficiaries can apply for the subsidy at their local Social Security office or online.

It's important to define two key terms: income is exactly what you think it is -- liquid assets such as earned wages, and some other payments. Resources, though, have a broader definition. Generally, it's any asset that can be converted to cash within 20 days -- items like bank accounts, stocks, and bonds. Real estate assets beyond the beneficiary's primary residence will also count as a resource. See Medicare.gov for a more complete listing.

Low-Income Subsidy resource limits increase in 2026

CMS ties adjustments in the resource limits to the performance of the Consumer Price Index (CPI) -- a common measure of how prices change over time. When the CPI increases, the resource limits increase. When CPI decreases, so too do the resource limits. That said, the law limits the maximum increase in limits to 2.4% per year -- exactly what we'll see this year.

We should also point out beneficiaries may notify the Social Security Administration they intend to use some of their resources for burial expenses. After this notification, beneficiaries see a slight bump to their personal resource limits - $1,500 per individual. 

For a full summary of the changes, check out the table below:

Cost-sharing increases in 2026

CMS also calculates the maximum copayments subsidy-eligible enrollees can be responsible for each year. For beneficiaries whose income is greater than 100% of the federal poverty level (FPL), the change in copay is related to the change in how much Medicare spends on Part D drugs per eligible beneficiary. For beneficiaries whose income is less than 100% of the FPL, their copays are updated by the annual change in CPI.

The good news is that eligible beneficiaries making less than 100% of the federal poverty level will pay no more than $4.90 per prescription drug fill in 2026. Those making more than 100% of FPL, but less than 150%, will pay no more than $12.65 per prescription fill. 

The chart below has a full breakdown:

Key takeaways for LIS-eligible Medicare beneficiaries

The good news: LIS resource limits have increased.

The bad news: So has the price of everything else.

Because asset limits and copays are tied to the Consumer Price Index (CPI), these numbers will move in lockstep with most things beneficiaries regularly purchase. The overall result, generally speaking, should be a wash.

Social Security recently announced the cost-of-living adjustment (COLA) for 2026 will be 2.8%. Taking only the CPI and the COLA numbers into account, LIS beneficiaries should come out slightly ahead. However, if the beneficiary's responsibility for all or some of their Medicare Part B Premium (currently estimated to be $206.50 for 2026) could impact overall spending power. 

LIS eligibility isn't the only income-driven review worth doing on your book. Clients at the opposite end — income dropped, but still paying an IRMAA surcharge — deserve the same look. Here's how to help them appeal it.