Medicare beneficiaries who have both limited income and assets could receive extra assistance through the Part D Low-Income Subsidy (LIS), also known as Extra Help, and Medicare Savings Programs (MSPs). Each May, the Social Security Administration (SSA) mails letters to individuals who might qualify for these Medicare Entitlement programs but are not currently receiving them. While data from the Social Security Administration helps identify individuals likely eligible for these programs, some Medicare beneficiaries may have additional sources of income or assets above the amounts allowed for the LIS and MSPs programs. Beneficiaries need not receive a letter to be eligible for these programs.
Medicare Savings Programs (MSPs)
People who have Medicare can also receive Medicaid if they meet their state’s eligibility criteria. Seniors who may not qualify for full Medicaid may still be able to enroll in the Medicare Savings Programs. Medicare Savings Programs (MSPs) are Medicaid-administered programs for people on Medicare who have limited income and resources. Three of the four MSPs cover the Medicare Part B premium, and all of the programs help those qualified to afford Medicare. Further, enrollment into MSPs also automatically makes a person eligible to receive the Medicare Part D Low Income Subsidy (LIS/Extra Help).
Medicare Savings Programs:
- Qualified Medicare Beneficiary (QMB): Covers the Medicare premiums (Part A, if applicable, and Part B), deductibles, copayments, and/or coinsurance.
- Specified Low-Income Beneficiary (SLMB): Covers the Medicare Part B premium.
- Qualifying Individual (QI): QI is a limited program (block-grant to states), and is available on a first-come, first-serve basis.
- Qualified Disabled Working Individual (QDWI): Adults under age 65 and disabled but who recently returned to work and are no longer eligible for premium-free Part A may qualify for QDWI. Covers the Part A premium.
Each of the four different Medicare Savings Programs has different federal income and resource eligibility limits. Some states may choose to increase the federal guideline amounts or eliminate the resource test altogether. Beneficiaries will need to refer to their state eligibility rules.
Part D Low-Income Subsidy (LIS)
Beneficiaries who are enrolled in both Medicaid and Medicare, sometimes referred to as dual-eligible, get LIS or Extra Help automatically, as do those who receive Supplemental Security Income (SSI) and those who qualify for a Medicare Savings Program. Retirees already receiving this Extra Help do not need to apply for the program. Anyone else who isn’t already enrolled in these extra benefits will need to apply to Social Security to receive LIS or Extra Help.
Those who qualify for LIS or Extra Help will receive either a full-subsidy or a partial-subsidy. The amount of LIS or Extra Help a beneficiary receives will depend on their income and resources. Most beneficiaries who qualify will pay:
- No premiums
- No deductibles if receiving a full-subsidy
- No more than $8.50 in 2019 for each drug their plan covers
Beyond receiving lower out-of-pockets costs, beneficiaries with Extra Help have the following two protections:
- A quarterly Special Enrollment Period. One time every three months between January to September, along with once during Annual Open Enrollment, beneficiaries with Extra Help will have the opportunity to join or switch Medicare Part D drug plans. These opportunities allow people who get Extra Help to not wait for the Annual Open Enrollment Period to change plans. Any plan changes outside the Annual Open Enrollment Period will become valid for the following month. This protection is particularly helpful to seniors with disabilities who may need to begin medications that are not on their current plan’s approved drug list.
- No Part D late enrollment penalty. Even if the beneficiary enrolls after they were first eligible to join a Part D plan and if they did not have other drug coverage.
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