A single Medicare beneficiary can hold as much as $16,590 in savings, stocks, and other countable resources in 2026 and still qualify for the full Extra Help subsidy, which caps brand-name drug copays at $4.90 and generic copays at $1.60 per prescription. The Centers for Medicare & Medicaid Services set that ceiling for calendar year 2026 in an October 2025 memo, raising it from the 2025 figure of $16,100. Married couples get $33,100. The increase matters because many older adults assume an older, lower number still applies and skip an application that could cut a monthly drug bill to a few dollars.
How CMS Recalculated the 2026 Resource Limit
The increase is not a policy choice; it is arithmetic CMS is required to perform every year. Jennifer R. Shapiro, director of the agency’s Medicare Plan Payment Group, signed the October 31, 2025 guidance explaining that CMS compared the Consumer Price Index for September 2025 against September 2024, producing a 324.800-to-315.301 ratio equal to a 3.01 percent increase. That percentage, applied under the Medicare Prescription Drug, Improvement, and Modernization Act, pushed the single-person resource limit from $16,100 to $16,590 and the married-couple limit from $32,130 to $33,100, both rounded to the nearest $10 as the statute requires.
Beneficiaries who tell the Social Security Administration they intend to set aside money for burial expenses get a higher ceiling still. Under the burial-fund exclusion CMS applies alongside the resource test, the agency added $1,500 per person to the base limit, producing a 2026 figure of $18,090 for a single applicant and $36,100 for a married couple who make that declaration, according to the CMS resource and cost-sharing memo. The distinction matters because a beneficiary sitting at $17,000 in savings would fail the ordinary test but pass it after documenting a burial-fund set-aside with Social Security.
Where the help is written down: The programs that lower Medicare costs each run on a different form and a different office, and no single notice lists them together. See the state cost-help packs in The Medicare Cost & Coverage Protection Kit.
What Counts as a Resource Under the Test
CMS defines a countable resource broadly on the agency’s Low-Income Subsidy eligibility page: checking and savings account balances, stocks, bonds, and any other liquid asset a beneficiary could convert to cash within 20 days, plus real estate that is not the applicant’s primary home. A paid-off car used for daily transportation and the house someone lives in do not count against the limit, but a vacation property, a rental unit, or inherited land does. The Low-Income Subsidy, commonly called Extra Help, ties Part D eligibility to this resource test alongside an income test CMS says it will publish separately in early 2026, once the federal poverty level updates.
The resource test exists because Extra Help is meant for beneficiaries with genuinely limited savings, not those who happen to report low income in a single year while sitting on substantial assets. A retiree with $150,000 in a brokerage account but modest Social Security income would fail the resource test even if her income alone looked low enough to qualify. Someone with $12,000 in a savings account clears the 2026 threshold comfortably and can apply regardless of home equity, provided the equity sits in a primary residence that CMS excludes from the count.
The Copay Ladder Behind the $4.90 Cap
The resource test determines who gets in the door; a second table in the same CMS memo sets what enrollees pay once inside. Full-benefit dual-eligible beneficiaries with income at or below 100 percent of the federal poverty level face no deductible and pay at most $1.60 for a generic prescription and $4.90 for a brand-name drug in 2026. Beneficiaries whose income falls between 100 and 150 percent of the poverty level, along with people who applied for a Medicare Savings Program or Supplemental Security Income, pay a higher ceiling of $5.10 for generics and $12.65 for brand-name drugs. Beneficiaries who are institutionalized or receiving home and community-based services pay nothing at the pharmacy counter.
Above a $2,100 out-of-pocket threshold in 2026, every Part D enrollee, not just those on Extra Help, pays nothing further for covered drugs for the rest of the year, a protection tied to the Inflation Reduction Act’s redesign of the Part D benefit. For a full-subsidy beneficiary already capped at $4.90 per brand-name fill, reaching that threshold is rare, but the arithmetic still matters: two brand-name prescriptions filled every month at the cap would total about $117.60 for the year, a fraction of a retail price that can run into the thousands for the same two drugs without the subsidy.
Applying Is Not Automatic for Everyone
Some beneficiaries receive Extra Help automatically because Social Security or a state Medicaid agency already confirms they qualify, but CMS’s Limited Income and Resources outreach page notes that a subset loses that automatic status every year and must reapply to keep it. Each September, the agency mails a gray notice, CMS Publication 11198, to beneficiaries who will no longer be deemed automatically eligible, along with an Extra Help application and a postage-paid envelope. A beneficiary who ignores that notice does not lose eligibility outright, but does lose the automatic renewal and must file a new application through Social Security to keep the subsidy active.
For beneficiaries applying for the first time, the Social Security Administration processes the application and asks for bank statements, tax returns, and balances for any Individual Retirement Account, 401(k), pension, or Veterans’ benefit the applicant or a spouse holds. The agency accepts applications online at any point before or after Part D enrollment, unlike Medicare’s annual enrollment period, which runs on a fixed calendar window. A beneficiary who was denied years ago under an older, lower resource limit is free to apply again now that the 2026 ceiling has risen, since the earlier denial does not carry forward under the new figures.
CMS says it will not finalize the 2026 income standards that pair with these resource limits until early next year, once the federal poverty level for the year is published, meaning the resource test is the only settled half of the eligibility picture right now. The agency’s October 31, 2025 memo remains the controlling document for the resource and cost-sharing side of Extra Help through the rest of 2026, and it is the version Social Security representatives are instructed to apply when a beneficiary asks whether savings of $16,000 or $17,000 still qualify.
Resource Limits and Prescription Help
The resource and cost-sharing figures above are only one piece of what determines a Medicare enrollee’s total drug and premium costs each year. Extra Help interacts with Part D plan selection, income-related premium adjustments, and state-specific Medicaid rules in ways that are not obvious from a single CMS memo. Sorting out which programs apply, and in what order, is often the hardest part of piecing together Medicare costs from scattered agency notices.
The Medicare Cost & Coverage Protection Kit is a 10-page kit that includes 51 state Medicare cost-help packs and a plain-language breakdown of the new Part D out-of-pocket cap.
See the new Part D out-of-pocket cap explained in The Medicare Cost & Coverage Protection Kit.
This article was researched and drafted with the assistance of AI and reviewed by The Money Overview editorial team.
