Financial Help for Seniors

Senior citizens and others living on a fixed or low income know how difficult it is to make ends meet, especially when costs for essentials like health care, food and energy increase faster than their sources of income.

Here are a few cost-saving benefits available to people on fixed incomes -- especially seniors:

Prescription Drug Assistance Programs. Most pharmaceutical companies offer patient assistance programs (PAPs) that provide uninsured and low-income people access to prescription drugs they couldn't otherwise afford. Ask your doctor, pharmacist or health clinic for details. Other good resources include: Medicare's alphabetical list of drugs available through PAPs, with links to detailed eligibility information; Partnership for Prescription Assistance; RxAssist; and NeedyMeds.

• Government-provided programs that help people with limited income and resources pay for medical coverage, including Medicaid and Medicare. For a good round-up of these programs, go to Medicare's "Help with Medical and Drug Costs."
• Ask your doctor about using lower-cost generic drugs and providing cash discounts for expenses not covered by your insurance.
• Consumer Reports offers free guides that explain how Prescription Drug Assistance Programs work, when and how it's safe to split pills to save money, what you need to know about generic drugs, and more .

• People who reach the coverage gap amount in prescription drug expenses will receive a $250 rebate in 2010 to lessen the financial burden.
• In 2011, Medicare enrollees will get a 50 percent discount on the cost of brand-name drugs purchased in the coverage gap. This discount will gradually climb to 75 percent by 2020.
• Generic drugs will also be discounted during the transition period, beginning with a 7 percent discount in 2011, gradually increasing to 75 percent by 2020.
• In addition, the threshold needed to reach the point when catastrophic drug coverage kicks in will gradually decrease until it is eliminated in 2020.

• A higher standard deduction amount for most people who don't itemize deductions, if they and/or their spouse are over 65 or blind.
• An additional tax credit called the Credit for the Elderly or the Disabled for lower-income people who are over 65 or disabled and file a 1040 or 1040A tax form. (For full details and eligibility, see IRS Publication 524.
• Certain home improvements made to accommodate medical conditions or disabilities with a doctor's recommendation may be deducted if you itemize deductions. Rules are complex, so read IRS Publication 502 and consult a tax advisor before claiming such deductions.
• Free tax return preparation assistance and counseling from IRS-trained volunteers is available to people over age 60, as well as low-to-moderate income folks and military families.

IRS Publication 554 is a comprehensive guide to help seniors prepare their tax returns. (Note: 2010 versions of many IRS publications have not yet been released, but the 2009 versions posted provide good background.)

One precaution: Senior rates at airlines, hotels, car rental agencies and other travel-related businesses are not always the cheapest available, so check their websites or ask a phone representative for the lowest available rate before booking the senior rate.

This article is intended to provide general information and should not be considered tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how tax laws apply to you and about your individual financial situation.

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