Medicare 2026

LI NET Explained: Medicare's Safety-Net Drug Coverage for People With Extra Help or Medicaid

If you qualify for Medicare and for extra help paying for prescriptions — through Medicaid, Supplemental Security Income (SSI), or the Part D Extra Help program — there can be a gap between when your help kicks in and when you're actually enrolled in a Medicare drug plan. The Limited Income Newly Eligible Transition program, better known as LI NET, is designed to fill that gap so you can still walk out of the pharmacy with your medications.

Here's what LI NET is, who it covers, and how to use it.

What LI NET is, in plain English

LI NET began on January 1, 2010, as a Medicare demonstration program. Congress made it a permanent part of Part D under Section 118 of the Consolidated Appropriations Act, 2021, effective January 1, 2024.

The idea is simple. Someone newly eligible for Medicaid, SSI, or Extra Help may qualify for drug coverage weeks or months before they're actually enrolled in a Medicare Part D plan. Without something to bridge that time, they could be stuck paying full price at the pharmacy or going without medication. LI NET steps in as a short-term Part D coverage source until a real plan takes over.

Who LI NET covers

LI NET is for people with Medicare who qualify for either Medicaid or Extra Help, and who are not yet enrolled in a Medicare drug plan.

• Full-benefit dual-eligible people (Medicare + full Medicaid) and SSI recipients can get LI NET coverage retroactively for up to 36 months in the past.
• People eligible for Extra Help are covered at the pharmacy counter and for up to 30 days in the past.

CMS's yellow auto-enrollment notice tells you whether retroactive coverage applies. A yellow notice marked CMS Product No. 11429, or the newer "Retroactive ONLY" yellow notice No. 12053, means retroactive coverage applies. A yellow notice marked No. 11154 means it does not.

What LI NET pays for

According to a CMS partner tip sheet, LI NET covers all Part D–covered drugs and has no network pharmacy restrictions. In other words, you can fill a prescription at any pharmacy that will bill the program, and the standard Part D drug list applies.

LI NET is temporary — it generally lasts up to 2 months, giving you time to pick a Medicare drug plan. If you don't choose one, Medicare will pick one for you and enroll you automatically unless you opt out.

How to use it at the pharmacy

A pharmacy can bill LI NET when it has reasonable assurance that you have Medicaid or Extra Help and don't already have other Medicare drug coverage. Acceptable proof includes:

• A Medicaid card showing your name and eligibility date, or
• A letter from your state Medicaid agency or the Social Security Administration showing Extra Help status.

If the pharmacy staff isn't familiar with LI NET, ask them to look it up — it's a real, nationwide Part D program, not a state-specific benefit.

If you already paid out of pocket

If you qualified for LI NET but paid for covered Part D drugs yourself, you may be able to get some of that money back. Medicare.gov's guidance is to keep your receipts showing prescription prices and call LI NET at 1-800-783-1307 (TTY 711) to start a reimbursement request.

After LI NET: picking a longer-term plan

LI NET is a bridge, not a destination. Once your temporary coverage ends, you'll want to be in a Part D plan that fits your medications and budget.

Since 2025, people with Medicaid or Extra Help have a monthly Special Enrollment Period they can use to move to Original Medicare paired with a stand-alone Part D plan, or to switch stand-alone Part D plans. Full-benefit dual-eligible people can also join an integrated Dual Eligible Special Needs Plan (D-SNP) in any month. These monthly opportunities give you flexibility if your first choice doesn't work out.

When comparing options, it helps to understand the two main ways people get Medicare drug coverage:

• Original Medicare with a stand-alone Part D plan (and optionally a Medigap policy) generally lets you see any provider in the country who accepts Medicare, and drug coverage is handled by a separate Part D plan. Medigap can help with Part A and B cost-sharing but has its own premium.
• Medicare Advantage plans usually bundle medical and drug coverage together, often with extra benefits, but typically use provider networks and may require referrals or prior authorization.

Neither path is universally "better" — the trade-offs depend on your doctors, medications, and preferences.

A few 2027 numbers worth knowing

• The Part D out-of-pocket cap is $2,400 in 2027 (it's $2,100 in 2026). Once you hit the cap on covered drugs, you pay $0 for the rest of the calendar year.
• The maximum Part D deductible any plan can charge in 2027 is $700.
• The Part D base beneficiary premium for 2027 is $41.33 — a national figure used in the late-enrollment penalty calculation. Actual plan premiums are set plan by plan.
• Medicare's Annual Enrollment Period for 2027 coverage runs October 15 – December 7, 2026, with choices taking effect January 1, 2027.
• Social Security announced a 3.6% COLA for benefits payable beginning January 2027.

CMS typically announces the 2027 Part B standard premium, Part B deductible, and IRMAA income brackets in the fall — usually November — so check Medicare.gov for those figures once they're official.

Where to go next

For official program rules, plan comparisons, and the latest enrollment information, visit Medicare.gov or call 1-800-MEDICARE (1-800-633-4227), TTY 1-877-486-2048. For LI NET questions specifically, including receipt reimbursements, call 1-800-783-1307 (TTY 711).

LI NET exists so that a paperwork gap never stands between you and a prescription you need. If you think it applies to you, bring your proof to the pharmacy counter — and then use your time on LI NET to choose the longer-term drug coverage that fits your life.