Medicare Part D Low-Income Subsidy: Annual Redeterminations Underway

The Medicare Low-Income Subsidy (LIS) provides "extra help" for people on Medicare who have limited income and resources to help pay their Medicare prescription drug plan’s premiums, co-payments, and the annual deductible.

Medicare beneficiaries who automatically qualify for LIS include
* Full-benefit dual eligible individuals. These individuals receive both Medicare and Medicaid benefits;
* Partial dual eligible individuals. These individuals receive Medicare benefits and partial Medicaid benefits under a Medicare Savings Plan such as Qualified Medicare Beneficiaries (QMB-only), Specified Low-Income Medicare Beneficiaries (SLMB-only), Qualifying Individuals (QI); and
* People who receive Supplemental Security Income (SSI) benefits but not Medicaid.

Some Medicare beneficiaries with limited inocmes and resources do not automatically qualify. These individuals can apply for a LIS and have their eligibility determined by either the Social Security Administration or their state Medicaid agency.

In July of each year, the U. S. Centers for Medicare & Medicaid Services (CMS), the federal agency that administers these two programs, begins the process of determining if beneficiaries who are receiving a low-income subsidy will automatically qualify in the next calendar.

Any beneficiary reported to CMS as as a full-benefit dual eligible, partial dual eligible (QMB-only, SLMB-only, or QI), or SSI recipient for any month between July and December 2012 will have his or her LIS status extended to December 31, 2013. Furthermore, the beneficiary's co-payment level for 2013 will be determined by type of dual eligibility, income, and institutional status reported in or after July 2012.

For example, Mary Jones is determined to be receiving QMB in August 2012. Consequently, her LIS eligibility will be extended to December 31, 2013.

What happens to LIS "extra help" recipients who have been been reported to be a full or partial dual eligible prior to July 2012?

For example, Mary Jones is reported to have received QMB in April 2012. Her LIS will end on December 31, 2012.

Here is the key point of this Elder Law FAX: In September, CMS and the Social Security Administration (SSA) will send a joint mailing to LIS beneficiaries who are scheduled to lose their LIS for 2013.

The mailing will include a personalized letter on gray paper from CMS, an SSA application for extra help, and a postage-paid return envelope to assist them in getting re-eligible.

A letter on orange paper will be sent to LIS beneficiaries who will have a change in co-payment level in 2013.

No notices will be sent to LIS beneficiaries without any change to their co-payments or LIS status.

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