TN 7 (10-09)

HI 03001.005 Medicare Part D Extra Help (Low-Income Subsidy or LIS)

A. Extra Help and deemed subsidy eligibles

The Medicare Part D Extra Help program helps Medicare beneficiaries with limited income and resources pay for prescription drug coverage. Eligible beneficiaries receive subsidized premiums, deductibles, and copayments. Subsidized premiums are paid to the prescription drug provider (PDP) or Medicare Advantage prescription drug plan (MA-PD) by the Center for Medicare and Medicaid Services (CMS) and are based on the service area’s regional benchmark premiums. Extra Help eligibles with a full premium subsidy who choose to participate in a more expensive plan are responsible for the difference.

The Medicare Part D program assumes responsibility for prescription drug coverage for full Medicaid recipients with Medicare.

Certain beneficiaries are automatically deemed subsidy-eligible and should not complete an application for Extra Help. These beneficiaries have Medicare Parts A or B, or both, and are:

  • already entitled to Supplemental Security Income (SSI),

  • eligible for full Medicaid coverage, or

  • covered under one of the Medicare Savings Programs as a Qualified Medicare Beneficiary (QMB), Specified Low-Income Medicare Beneficiary (SLMB), or Qualified Individual (QI).

NOTE: Qualified Disabled Working Individuals (QDWI) are not deemed eligible for Extra Help. For more information about these groups, see HI 00815.023 and HI 00815.025.

B. SSA and Extra Help

If a beneficiary is not deemed eligible for Medicare Part D Extra Help, he or she may file an application with the State or SSA. However, SSA has primary responsibility for taking applications for Extra Help and making determinations on those applications in the 50 States and the District of Columbia. When a beneficiary applies for Extra Help, SSA determines eligibility and the applicable percentage of Extra Help premiums. An SSA eligibility determination indicates one of the following conditions:

  • Full premium subsidy of the service area’s benchmark base premium with no deductible and limited copayments;

  • Full premium subsidy of the service area’s benchmark base premium with reduced deductibles and copayments;

  • Partial premium subsidy of 75%, 50%, or 25% of the service area’s benchmark base premium with reduced deductibles and copayments; or

  • Not eligible for a subsidy.

NOTE: For information on basic eligibility requirements for Extra Help, see HI 03001.020.

Extra Help application editing or exception issues (e.g., answers omitted or numbers larger than the space provided on the form) are generally resolved in SSA’s Wilkes-Barre Data Operations Center (WBDOC).

Issues that are not editing or exception problems, but are data inconsistencies with information available in SSA records and the information provided on the Extra Help application, are sent to the appropriate field office (FO) or Workload Support Unit (WSU) for resolution. If necessary, the FO or WSU contacts the applicant for verification of information.

Detailed information regarding the exception and verification processes is found in HI 03010.039 and HI 03035.005C.

SSA sends the subsidy determination notice to the beneficiary, including appeal procedures, and transmits the application subsidy determination data to CMS. Starting January 1, 2010, unless a beneficiary declines, data used for the Extra Help determination will be sent to the State to initiate the Medicare Savings Program (MSP) application process.

NOTE: For information on the Extra Help appeal process, see HI 03040.001.

An SSA subsidy determination of an allowance is generally effective:

  • the month the beneficiary applies for Extra Help if already enrolled with a PDP/MA-PD, or

  • the month after the month of enrollment with the PDP/MA-PD.

A subsidy determination cannot be effective before Medicare entitlement begins or before enrollment with a PDP/MA-PD becomes effective.

SSA periodically redetermines eligibility for Extra Help beneficiaries to determine continued eligibility for a full or partial subsidy. SSA redetermines eligibility for all Extra Help initial determinations made by SSA. More information about Extra Help redeterminations is available in HI 03050.011.

Effective January 2010, unless the claimant objects, SSA will transmit Extra Help determination data to the appropriate State Medicaid agency to begin the MSP application process.

C. CMS, deemed subsidy eligibles, and Extra Help eligibles

For individuals deemed subsidy-eligible and beneficiaries filing an application for Extra Help, CMS:

  • Determines if an individual is deemed eligible for the low-income subsidy based on monthly data from State Medicaid agencies and SSA’s records of SSI participation;

  • Automatically enrolls (auto-enrolls) deemed-eligible beneficiaries who have not yet enrolled with a PDP or MA-PD. CMS also assists in the enrollment of beneficiaries who are approved for Extra Help but have not enrolled in a PDP or MA-PD under a process called facilitated enrollment. (See HI 03001.010);

  • Sends notices to beneficiaries who lose their deemed status and provides an SSA application for Extra Help (Beneficiaries lose deemed status the end of the calendar year of their notification of termination.);

  • Determines the dollar value of Extra Help a beneficiary may receive from the percentage data provided by SSA;

  • Notifies SSA of Medicare terminations; and

  • Sends SSA data to support requests for Part D premium withholding (or stops Part D premium withholding) from the Title II benefit.

NOTE: Deeming is a CMS activity; SSA does not make these determinations and cannot address any appeals of deeming decisions.

D. Deemed eligibility and applying for Extra Help

Medicare beneficiaries are automatically deemed subsidy-eligible and should not apply for Extra Help if they:

  • have Medicaid;

  • participate in a QMB, SLMB, or QI program; or

  • receive SSI.

Almost all Medicare Part D Extra Help applications are taken and processed by SSA. A prescribed subsidy application filed with us includes the:

  • SSA-1020-OCR, scannable paper version (HI 03010.035B.1.) in English and Spanish;

  • i1020, online version on SSA’s Internet website (HI 03010.035B.3.); or

  • Intranet via the Medicare Application Processing System (MAPS) screens completed by an SSA employee (HI 03010.010 and MSOM INTRANETMAPS 005.001 — MSOM INTRANETMAPS 005.013

State Medicaid agencies may use the Extra Help application, which may be a paper SSA-1020-OCR or i1020. However, if the Medicaid agency chooses to use a non-SSA application, the agency must process the application, make the subsidy determination (and subsequent annual redeterminations or appeals), and share applicable data with CMS directly. CMS shares the appropriate data with SSA. This is very rare.

E. Beneficiary contacts 800#, Field Office (FO), or Workload Support Unit (WSU)

The preferred method of filing for Medicare Part D Extra Help is through our online application, the i1020. Refer beneficiaries first to the online process at https://secure.ssa.gov/apps6z/i1020

1. 800# process

If a beneficiary calls and needs help with the Extra Help application or alleges that he or she did not receive a form but wants to file for Extra Help, 800# agents should follow the instructions in TC 24020.020.

2. FO and WSU process

If a beneficiary contacts the FO or and requires assistance completing the Extra Help application or alleges non-receipt of a form and wants to file for Extra Help, follow the instructions in HI 03010.001 through HI 03010.040.

F. Questions about enrollment

People who file an application and establish eligibility for Extra Help may or may not be enrolled with a PDP or MA-PD. Enrollment is generally effective the month after the enrollment request is filed with the PDP or MA-PD. (More information regarding specific enrollment periods and effective dates of coverage is found in HI 03001.001F.)

Extra Help beneficiaries who do not enroll with a PDP or an MA-PD are enrolled in a plan selected by CMS; however, they may choose not to be enrolled. For information about facilitated enrollment, see HI 03001.010.

Beneficiaries with questions about enrolling or choosing a PDP or MA-PD should call 1-800-MEDICARE (1-800-633-4227). The Medicare TTY number is 1-877-486-2048. Refer beneficiaries to their State Health Insurance Counseling and Assistance Program (SHIP) for assistance in choosing a PDP or MA-PD. SHIP telephone contact information is on the back of the “Medicare & You handbook or may be accessed by selecting the State at http://www.medicare.gov/contacts/organization-search-criteria.aspx .

G. Full and partial subsidies

An individual can qualify for a full or partial Medicare Part D subsidy depending on his or her income, resources (and those of the living-with spouse), and household size. The resources are compared to one of two resource limits for individuals and couples. A more detailed explanation of resource limits is in HI 03030.025.

Income is based on the Federal Poverty Level (FPL), which considers the number of persons in the household. To determine household size, a relative is considered in the same household as the beneficiary if the relative (by blood, marriage, or adoption) receives at least one-half support from the beneficiary or the living-with spouse. For more information about income and the FPL see HI 03020.055 and HI 03001.020C.

NOTE: When discussing Extra Help, it is important to remember that a person who receives a 100% premium subsidy is not necessarily “full subsidy eligible.” A person who fails to meet the lower resource standards may receive a 100% premium subsidy but may pay an annual deductible and higher copayments than a “full subsidy eligible” individual.

2014 Resource Standards for Individuals/Couples

 

With Burial Exclusion

Without Burial Exclusion

Lower Resources Level

$8,660/$13,750

$7,160/$10,750

Higher Resources Level

$13,440/$26,860

$11,940/$23,860

2013 Resource Standards for Individuals/Couples

 

With Burial Exclusion

Without Burial Exclusion

Lower Resources Level

$8,580/$13,620

$7,080/$10,620

Higher Resources Level

$13,300/$26,580

$11,800/$23,580

The charts below explain the basic Part D benefit and the Extra Help available in 2014 and 2013 for each subsidy level and for non-institutional deemed eligibles. All resource limits shown include the $1,500 per person burial exclusion.

1. Part D coverage for 2014

a. For individuals/couples at 150% FPL or above, or with countable resources greater than $13,440/$26,860 or both (basic benefit)

If income is

150% FPL or above

And resources are

NONE to greater than resource limit for the year

The deductible is

$310

The copayment is

After deductible, 25% up to $2,850 in out-of-pocket drug cost

The coverage gap is

The beneficiary is responsible for 47.5% of out-of-pocket costs of brand-name drugs and 72% of out-of-pocket costs of generic drugs between $2,850 and $6,455.00. The beneficiary’s cost will continue to decrease each year until it reaches 25% in 2020 for both brand-name and generic drugs.

Catastrophic coverage applies

After $4,550 in total out-of-pocket covered drug costs are paid by the beneficiary (usually representing $6,455.00 in covered drugs), copayments of $2.55 for generic/preferred, and $6.35 for other covered medications

b. For individuals/couples not eligible for Medicaid, but between 136% and 149% of FPL (Low-Income Subsidy)

If income is

Between 136% and 149% FPL

  • 25% premium subsidy from 146-149%

  • 50% premium subsidy from 141-145%

  • 75% premium subsidy from 136-140%

And resources are

$13,440 or less for individuals,

$26,860 or less for couples

The deductible is

$63

The copayment will be

After deductible, 15% up to $4,550 in out-of-pocket drug costs

The coverage gap is

Covered – If the beneficiary is receiving Extra Help there is no coverage gap

Catastrophic coverage will apply

After $4,550 in out-of-pocket covered drug costs paid by beneficiary, copays of $2.55 for generic/preferred and $6.35 for other covered medications

c. For individuals/couples not eligible for Medicaid, but less than or equal to 135% of FPL (Low Income Subsidy)

If income is

Less than or equal to 135% FPL with higher resources level

Less than or equal to 135% FPL with lower resources level

And resources are

Greater than $8,660, but do not exceed $13,440 for individuals

Greater than $13,750, but do not exceed $26,860 for couples

$8,660 for individuals,

$13,750 for couples

The deductible is

$63

NONE

The copayment will be

After deductible, 15% up to $4,550 in out-of-pocket drug costs

$2.55 for generic/preferred and

$6.35 for other medications

The coverage gap is

Covered – If the beneficiary is receiving Extra Help there is no coverage gap

N/A

Catastrophic coverage will apply

After $4,550 in out-of-pocket covered drug costs are paid by the beneficiary, and copays of $2.55 for generic/preferred and $6.35 for other covered medications

N/A

d. For non-institutionalized individuals deemed eligible for Extra Help

If income is

Over 100% FPL

Up to and including 100% FPL and full Medicaid eligible

And resources are

Limited by the rules of the qualifying program

Limited by the rules of the qualifying program

The deductible is

NONE

NONE

The copayment is

$2.55 for generic/preferred and

$6.35 for other covered medications

$1.20 for generic/preferred and

$3.60 for other covered medication

The coverage gap is

N/A

N/A

Catastrophic coverage is

N/A

N/A

2. Part D coverage for 2013

a. For individuals/couples at 150% FPL or above, or with countable resources greater than $13,300/$26,580 or both (basic benefit)

If income is

150% FPL or above

And resources are

NONE to greater than resource limit for the year

The deductible is

$325

The copayment is

After deductible, 25% up to $2,970 in out-of-pocket drug cost

The coverage gap is

The beneficiary is responsible for 47.5% of out-of-pocket costs of brand-name drugs and 79% of out-of-pocket costs of generic drugs between $2,970 and $6,733.75. The beneficiary’s cost will continue to decrease until it reaches 25% in 2020 for both brand-name and generic drugs.

Catastrophic coverage applies

After $4,750 in total out-of-pocket covered drug costs are paid by the beneficiary (usually representing $6,733.75 in covered drugs), copayments of $2.65 for generic/preferred, and $6.60 for other covered medications

b. For individuals/couples not eligible for Medicaid, but between 136% and 149% of FPL (Low-Income Subsidy)

If income is

Between 136% and 149% FPL

  • 25% premium subsidy from 146-149%

  • 50% premium subsidy from 141-145%

  • 75% premium subsidy from 136-140%

And resources are

$13,300 or less for individuals,

$26,580 or less for couples

The deductible is

$66

The copayment will be

After deductible, 15% up to $4,750 in out-of-pocket drug costs

The coverage gap is

Covered – If the beneficiary is receiving Extra Help there is no coverage gap

Catastrophic coverage will apply

After $4,750 in out-of-pocket covered drug costs paid by beneficiary, copays of $2.65 for generic/preferred and $6.60 for other covered medications

c. For individuals/couples not eligible for Medicaid, but less than or equal to 135% of FPL (Low Income Subsidy)

If income is

Less than or equal to 135% FPL with higher resources level

Less than or equal to 135% FPL with lower resources level

And resources are

Greater than $8,580, but do not exceed $13,300 for individuals

Greater than $13,620, but do not exceed $26,580 for couples

$8,580 for individuals,

$13,620 for couples

The deductible is

$66

NONE

The copayment will be

After deductible, 15% up to $4,750 in out-of-pocket drug costs

$2.65 for generic/preferred and

$6.60 for other medications

The coverage gap is

Covered – If the beneficiary is receiving Extra Help there is no coverage gap

N/A

Catastrophic coverage will apply

After $4,750 in out-of-pocket covered drug costs are paid by the beneficiary, and copays of $2.65 for generic/preferred and $6.60 for other covered medications

N/A

d. For non-institutionalized individuals deemed eligible for Extra Help

If income is

Over 100% FPL

Up to and including 100% FPL and full Medicaid eligible

And resources are

Limited by the rules of the qualifying program

Limited by the rules of the qualifying program

The deductible is

NONE

NONE

The copayment is

$2.65 for generic/preferred and

$6.60 for other covered medications

$1.15 for generic/preferred and

$3.50 for other covered medication

The coverage gap is

N/A

N/A

Catastrophic coverage is

N/A

N/A

H. References

  • HI 00815.023, Medicare Savings Programs Income Limits

  • HI 00815.025, SSA Outreach to Low-Income Medicare Beneficiaries – Extra Help and Medicare Savings Programs

  • HI 03001.001F., Description of the Medicare Part D Prescription Drug Program

  • HI 03001.010, Facilitated Enrollment and Special Enrollment Period for Individuals Eligible for Extra Help (Low Income Subsidy)

  • HI 03010.010, Filing Applications

  • HI 03010.035B.1., General Information about the Subsidy Application

  • HI 03010.039, Exception Processing

  • HI 03020.055, Income Limits for Subsidy Eligibility

  • HI 03030.025, Resource Limits for Subsidy Eligibility

  • HI 03035.005, Verification Policy within the Medicare Application Processing System (MAPS);

  • HI 03035.006, Verification and Documentation Process for Medicare Application Processing System (MAPS);

  • HI 03035.007, Verification and Documentation Instructions for Internal Revenue Service (IRS) data within the Medicare Application Processing System (MAPS);

  • HI 03035.008, Chart of IRS Transaction Types Used for Verification

  • HI 03040.001, Overview of Appeal Process for Medicare Part D Subsidy Determination

  • HI 03050.011, Redetermination of Eligibility

  • MSOM INTRANETMAPS 005.001 — MSOM INTRANETMAPS 005.013, MAPS Application Screens

  • TC 24020.020, Medicare Prescription Drug Subsidy Eligibility and Filing


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0603001005
HI 03001.005 - Medicare Part D Extra Help (Low-Income Subsidy or LIS) - 12/23/2013
Batch run: 12/23/2013
Rev:12/23/2013