Patient assistance programs, Extra Help and 340B, compared

Next year, a Medicare enrollee who qualifies for Extra Help will pay no more than $5.80 for a generic prescription, up from $5.10 in 2026, according to CMS's announcement of 2027 Part D payment policies¹. To qualify in 2026, a single person needed income below $23,940 and resources below $18,090, based on figures from Medicare.gov² and a CMS memo on the 2026 limits³.

Extra Help is one of four largely separate systems that lower drug costs for people with limited means. Drug manufacturers run their own patient assistance programs. Some states run pharmaceutical assistance programs. Community health centers can offer discounted prescriptions through the federal 340B program and their own sliding fee scales.

Each of the four has its own eligibility rules, and some do not combine the way people expect. A free brand-name drug from a manufacturer, for instance, does not move a Medicare enrollee toward the Part D out-of-pocket cap. People taking mostly generics will find that the government programs matter more than the manufacturer ones.

Manufacturer programs mostly cover brand drugs

Many brand-name drug manufacturers run patient assistance programs (PAPs) that provide free or low-cost medicine to people who meet income and insurance criteria. Each company sets its own rules. Eligibility is often tied to household income as a multiple of the federal poverty level and to having no coverage, or coverage that does not include the drug. Applications usually need the prescriber's involvement, and approved medicine is often shipped to the patient or the prescriber's office for a set period, then renewed.

Medicare enrollees face an extra layer of rules. In a 2005 Special Advisory Bulletin⁵, the HHS Office of Inspector General said manufacturers subsidizing Part D cost sharing for their own drugs raises heightened risk under the federal anti-kickback statute. The bulletin described a lower-risk path in which a manufacturer PAP gives free drugs entirely outside Part D.

In that arrangement, no claim goes to the Part D plan, and the assistance must not count toward the enrollee's true out-of-pocket costs (TrOOP). The bulletin⁵ also said the program should make sure the plan is notified and run for the full coverage year. The practical result is that free drug from a manufacturer program does not count toward the Part D out-of-pocket cap, a feature explained in GxRadar's guide to Part D changes in 2025 and 2026.

Extra Help, Medicare's own subsidy

Extra Help, formally the Part D Low-Income Subsidy and the subject of GxRadar's Extra Help explainer, lowers Part D premiums, deductibles and copays for people with limited income and resources. People who get full Medicaid, a Medicare Savings Program or Supplemental Security Income qualify automatically, according to Medicare.gov². Others can apply through the Social Security Administration, and State Health Insurance Assistance Programs (SHIPs) offer free help with the application.

Income limits are from Medicare.gov² and SSA's program manual⁴; resource limits from the CMS 2026 memo³; copays from the CMS 2027 announcement¹.

Those 2026 income limits equal 150 percent of the federal poverty guideline, which SSA's Program Operations Manual⁴ lists as $15,960 for one person and $21,640 for two. SSA applies its own rules for what counts as income and resources, and Alaska and Hawaii have higher limits. Resources include bank accounts, stocks, bonds and real estate other than the applicant's home. Without the burial allowance, the 2026 resource limits³ are $16,590 and $33,100.

Those copays are ceilings at participating pharmacies. People outside these programs face a different calculation, covered in GxRadar's pieces on when the cash price beats the copay and how discount cards work. Medicare.gov also notes² that Extra Help is not available in Puerto Rico, the US Virgin Islands, Guam, the Northern Mariana Islands or American Samoa.

State programs vary by state

Some states run State Pharmaceutical Assistance Programs (SPAPs). Their eligibility rules and benefits are set by each state and vary widely, and some are built to work alongside Medicare drug coverage. Because the details change, current information comes from the state program itself.

Medicare.gov maintains a finder for state programs², and a local SHIP counselor can explain how a state's program works with Medicare. Medicare's Prescription Payment Plan⁹ is a different kind of tool. It spreads a Part D enrollee's out-of-pocket costs across the year, and Medicare says it "doesn't save you money or lower your drug costs"; GxRadar looks at its first year in a separate piece.

Health centers, 340B and sliding fees

Congress created the 340B Drug Pricing Program in 1992. The program, set out in Section 340B of the Public Health Service Act, requires drug manufacturers to sell outpatient drugs at discounted prices to eligible providers, called covered entities, as a condition of Medicaid coverage for their drugs. The eligible types are listed in Section 340B(a)(4), as HRSA's eligibility page⁷ notes. They include federally funded health centers and other federal grantees, plus certain hospitals, such as critical access and disproportionate share hospitals.

Participation has grown quickly. The Government Accountability Office counted about 14,000 covered entities⁶ in 2023, roughly 11,400 grantees and 2,600 hospitals. Their sites grew from about 20,000 in 2013 to more than 55,000 in 2023.

For patients, the key fact is that 340B does not require covered entities to pass discounts on. How the savings are used depends on the organization. Some community health centers use 340B pricing in their own or contracted pharmacies and offer discounted prescriptions to uninsured or low-income patients. A person must be a patient of the covered entity to receive 340B drugs, HRSA says⁷.

Health centers funded by HRSA must also run a sliding fee discount program based on income relative to the federal poverty guidelines. HRSA's compliance manual⁸ illustrates discount classes between 101 and 200 percent of the guidelines, with an example of a patient at 150 percent receiving a 50 percent discount on an $80 fee. Pharmacies near a given ZIP code can be found with GxRadar's pharmacy finder, which draws on the federal NPI registry.

Fitting the pieces together

Extra Help is the broadest of the four for Medicare enrollees because it works inside Part D and lowers costs on every covered drug. For people without coverage, a community health center's sliding fee scale and pharmacy pricing are worth asking about. For a specific brand drug, the manufacturer's patient assistance office or the prescriber's staff can explain that program's criteria.

A SHIP counselor or pharmacist can help sort out which programs can be combined, and GxRadar's pharmacist script lists questions to ask at the counter. Decisions about the medicine itself stay with the prescriber and pharmacist.

Eligibility limits for 2027 are still to come. CMS sets the resource limits after the September 2026 consumer price index, and the income limits follow the new federal poverty guidelines in early 2027.