BASIC (04-05)

HI 03050.015 Adjustments and Terminations

A. INTRODUCTION

This section:

• describes adjustments to premiums and cost-sharing subsidies and termination of eligibility under the Medicare Part D prescription drug program; and

• explains the effects of changes in subsidy amounts for individuals.

It does not explain reporting responsibilities for eligible individuals, how to evaluate reports of change, and compute and change subsidy amounts. Those instructions appear in HI 03050.005.

B. POLICY

1. Subsidy-Changing Events

Certain changes in an individual’s circumstances could increase or reduce a subsidy amount or terminate eligibility for a subsidy. The six subsidy-changing events are listed in HI 03050.005.

2. Increase In a Subsidy

An increase in a subsidy amount means that an individual would be able to pay a lower premium to participate in the Medicare Part D program. An increase in subsidy may also result in a reduction in or elimination of any deductible. In certain situations, an increase in a subsidy amount may result in a reduced copayment for covered prescription drugs for which an individual is responsible.

3. Reduction In a Subsidy

A reduction in a subsidy means that an individual would have to begin to pay a premium or a higher premium to participate in the Medicare Part D program. The individual may also have to begin to pay a deductible and in some cases a higher copayment for covered prescription drugs.

4. Termination of a Subsidy

A termination means that an individual would no longer be eligible for a subsidy under the Medicare Part D program.

NOTE: After a termination, an individual must generally file a new application (absent a favorable appeal decision) and meet the requirements in HI 03001.010 to qualify for a subsidy. See an exception in HI 03010.005B.2.f. for an individual who subsequently qualifies as a deemed eligible person.

5. Effective Dates

Adjustments and terminations will be effective beginning in January of the next calendar year following a periodic redetermination or the month after the month of the report of a change that is a subsidy changing event as defined in HI 03050.005. Individuals must receive an advance written notice of intent with the effective date of the adjustment or termination which includes their appeal rights. Appeal rights for a reduction or termination will include the right to continue to receive a subsidy at the established level until there is a decision on the appeal. These procedures are explained in detail in HI 03040 ff.

C. REFERENCES

HI 03000, Eligibility for the Medicare Prescription Drug Program

HI 03040, Appeals

HI 03001, Eligibility Requirements for Subsidized Medicare Part D

HI 03050, Redeterminations

HI 03050.005, Subsidy Changing Events