Medicare FAQs - Extra Help - Low Income Subsidy
1. What is Extra Help or Low Income Subsidy?
Extra Help or Low Income Subsidy (LIS) refers to the program offered through Medicare that assists qualified beneficiaries with Part D premiums and overall drug costs. You must meet certain criteria to qualify for LIS. In 2015, you may qualify if you have up to $17,508 in annual income ($23,592 for a married couple) and up to $13,440 in resources ($26,860 for a married couple). The cost sharing amount for LIS depends on income and resources, but most people who qualify will pay no premiums, no deductibles and no more than $2.65 for generics and $6.60 for brand name prescriptions in 2015.
2. How does a Medicare beneficiary automatically qualify for LIS?
Certain Medicare beneficiaries will automatically qualify for the Extra Help (LIS) and don't need to apply in the following circumstances:
- If you have full coverage from a state Medicaid program. Medicaid no longer pays for most prescription drugs for people with Medicare.
- If you get help from Medicaid paying Medicare premiums (belong to a Medicare Savings Program).
- If you receive Supplemental Security Income (SSI) benefits.
3. How does Medicare notify beneficiaries that they qualify for LIS?
CMS mails letters to beneficiaries to notify them of their LIS qualification.
When you have Medicare and Medicaid, CMS mails a letter on yellow paper to you as notification that Medicare is covering your prescriptions instead of Medicaid. The letter provides the name of the plan Medicare is enrolling you in and the date your coverage begins.
Beneficiaries who get help from their state to pay Medicare premiums (Medicare Savings Program), get Supplemental Security Income (SSI) benefits, or applied and qualified for the extra help, receive a letter from CMS on green paper. The letter provides the name of the plan Medicare has chosen for you and the date coverage begins.
4. What if the drug plan Medicare signs me up for doesn't meet my needs?
If you're not happy with the plan Medicare assigns you to, you may be eligible for a SEP. You also can make changes to your coverage during the annual enrollment period from Oct. 15 - Dec. 7 each year.
5.What are the eligibility qualifications for LIS?
In determining your eligibility for LIS, both income and resources are counted. If you are married and living with a spouse, both of your incomes and resources are counted - even if only one is applying for Extra Help. If you are married, but not living with the spouse when applying, only your income and resources are counted.
6. What income counts for LIS?
Income is any cash, goods or services that can be used to meet needs for food or shelter. Examples include, but aren't limited to, the following:
- Earnings from self-employment
- Social Security benefits
- Railroad Retirement benefits
- Veterans benefits
- Ann uities
- Rental income
- Workers' compensation
Income not counted:
- Income tax refunds
- Assistance based on need, funded by a state or local government
- Foster care payments
- The value of expenses that a blind or disabled person needs to work
7. What resources count toward LIS?
Resources include cash and other things that normally can be converted to cash within 20 workdays. Examples include, but aren't limited to the following:
- Accounts at financial institutions (such as savings; checking; money market; time deposits or certificates of deposit; and retirement, such as individual retirement accounts (IRA) or 401(k) accounts)
- The value of property that isn't connected to the home
Resources not counted:
- Life insurance policies owned with a combined face value of $1,500 or less ($3,000 or less for applicant and spouse)
- The home you live in and the land it's on
- Resources such as family heirlooms and wedding/engagement rings
- Property of a trade or business that is essential to means of self-support
- Funds received and saved to pay for medical and/or social services