Pathways to Extra Help - the Part D low income subsidy and how it can help your clients

There is a special program called the Low Income Subsidy (LIS) which helps with Medicare Part D cost sharing.  LIS is also known as "Extra Help."  The Social Security Administration administers LIS -- you don't apply through your Part D plan. 

See Medicare Rights Center chart on Extra Help Income and Asset Limits  (listed amounts already deduct the $20/month income disregard)(they update it annually)

Enrolling in Extra Help

There are three basic ways to get into the LIS program:

1) by receiving Medicaid. 

Medicaid recipients, including those who meet a spenddown, are "deemed" into LIS (automatically enrolled by SSA) and don't have to file a separate application for Extra Help.  See more below about how receiving Medicaid just for one month can qualify you for Full Extra Help for up to 18 months. 

2) by enrolling in a Medicare Savings Program.  

The Medicare Savings Program includes the Qualified Medicare Beneficiary (QMB) program, which covers beneficiaries up to 100% FPL; Specified Low-Income Medicare Beneficiary (SLIMB), for those between 100-120%; and the Qualified Individual (QI-1) program, for individuals between 120-135% FPL.  There are no resource tests in New York's Medicare Savings Program.)  The New York State Department of Health posts the Medicare Savings Program income guidelines on their website.  Just like Medicaid, Medicare Savings Program recipients are deemed into LIS and don't need to apply through SSA.  For more information see this article. 

3) by applying for Extra Help through the Social Security Administration. 

The Extra Help income limits are 150% FPL and there is an asset test.  SSA lists the income and resource limits for Extra Help on their website, where you can also file an application online and get more information about the program.  You can also find out information about Extra Help in many different languages.

See Medicare Rights Center chart on  Extra Help Income and Asset Limits - updated annually 

You can apply for Extra Help and MSP at the same time through SSA; SSA will forward your Extra Help application data to the New York State Department of Health, who will use that data to assess your eligibility for MSP.  

Individuals who apply for LIS through SSA and those who are deemed into LIS should receive written confirmation of their Extra Help status through SSA. Of course, individuals who apply for LIS through SSA and are found ineligible are also entitled to a written notice and have appeal rights.

Benefits of Extra Help

1) Assistance with Part D cost-sharing

The Extra Help program provides a subsidy which covers most (but not all) of beneficiary’s cost sharing obligations. Extra Help beneficiaries do not have to worry about hitting the “donut hole” – the LIS subsidy continues to cover them through the donut hole and into catastrophic coverage.

Full Extra Help:

LIS beneficiaries with incomes up to 135% FPL are generally eligible for "full" Extra Help -- meaning they pay no Part D deductible, no charge for monthly premiums up to the benchmark amount, and fixed, relatively low co-pays (between $1.30 and $8.95 for 2020 depending on the person's income level and the tier category of the drug; Medicaid beneficiaries in nursing homes, waiver programs, or managed long term care have $0 co-pays). Full Extra Help beneficiaries who hit the catastrophic coverage limit have $0 co-pays.  See current co-pay levels here. 

Partial Extra Help:

Beneficiaries between 135%-150% FPL receive "partial" Extra Help, which limits the Part D deductible to $89 (2020 figure - click here for updated chart); sets sliding scale fees for monthly premiums; and limits co-pays to 15%, until the beneficiary reaches the catastrophic coverage limit, at which point co-pays  are limited to a $8.95 maximum (2020 or see current amount here) or 5% of the drug cost, whichever is greater.

2) Facilitated enrollment into a Part D plan

Extra Help recipients who aren’t already enrolled in a Part D plan and don’t want to choose one on their own will be automatically enrolled into a benchmark plan by CMS. This facilitated enrollment ensures that Extra Help recipients have Part D coverage. However, the downside to facilitated enrollment is that the plan may not be the best “fit” for the beneficiary, if it doesn’t cover all his/her drugs, assesses a higher tier level for covered drugs than other comparable plans, and/or requires the beneficiary to go through administrative hoops like prior authorization, quantity limits and/or step therapy. Fortunately, Extra Help recipients can always enroll in a new plan … see #3 below.

3) Continuous special enrollment period

Extra Help recipients have a continuous special enrollment period, meaning that they can switch plans at any time; they are not “locked into” the annual open enrollment period (October 15-December 7). 

NOTE: This   changed in 2019. Starting in 2019, those with Extra Help will no longer have a continuous enrollment period. Instead, Extra Help recipients will be eligible to enroll no more than once per quarter for each of the first three quarters of the year.

4) No late enrollment penalty

Non LIS beneficiaries generally face a premium penalty (higher monthly premium) if they delayed their enrollment into Part D, meaning that they didn’t enroll when they were initially eligible and didn’t have “creditable coverage.” Extra Help recipients do not have to worry about this problem – the late enrollment penalty provision does not apply to LIS beneficiaries.

How Long Does Extra Help Status Last?

1) For “deemed” beneficiaries (Medicaid/Medicare Savings Program recipients):

Extra Help status lasts at least until the end of the current calendar year, even if the individual loses their Medicaid or Medicare Savings Program coverage during that year. Individuals who receive Medicaid or a Medicare Savings Program any month between July and December keep their LIS status for the remainder of that calendar year and the following year.

Getting Medicaid coverage for even just a short period of time (ie, meeting a spenddown for just one month) can help ensure that the individual obtains Extra Help coverage for at least 6 months, and possibly as long as 18 months.  

TIP:  People with a high spend-down who want to receive Medicaid for just one month in order to get Extra Help for 6-18 months can use past medical bills to meet their spend-down for that one month.  There are different rules for using past paid medical bills verses past unpaid medical bills.  For information see Spend down training materials.

Individuals who are losing their deemed status at the end of a calendar year because they are no longer receiving Medicaid or the Medicare Savings Program should be notified in advance by SSA, and given an opportunity to file an Extra Help application through SSA.

2) For “non-deemed” beneficiaries (those who filed their LIS applications through SSA)

Non-deemed beneficiaries retain their LIS status until/unless SSA does a redetermination and finds the individual ineligible for Extra Help. 

There are no reporting requirements per se in the Extra Help program, but beneficiaries must respond to SSA’s redetermination request.

What to do if the Part D plan doesn't know that someone has Extra Help

Sometimes there are lengthy delays between the date that someone is approved for Medicaid or a Medicare Savings Program and when that information is formally conveyed to the Part D plan by CMS.  As a practical matter, this often results in beneficiaries being charged co-pays, premiums and/or deductibles that they can't afford and shouldn't have to pay.

To protect LIS beneficiaries, CMS has a "Best Available Evidence" policy which requires plans to accept alternative forms of proof of someone's LIS status and adjust the person's cost-sharing obligation accordingly.   LIS beneficiaries who are being charged improperly should be sure to contact their plan and provide proof of their LIS status.  If the plan still won't recognize their LIS status, the person or their advocate should file a complaint with the CMS regional office.

The federal regulations governing the Low Income Subsidy program can be found at 42 CFR Subpart P (sections 423.771 through 423.800).    Also, CMS provides detailed guidance on the LIS provisions in chapter 13 of its Medicare Prescription Drug Benefit Manual.

This article was authored by the Empire Justice Center.