Part D Low Income Subsidy (LIS/Extra Help)
The Part D Low Income Subsidy (LIS/Extra Help) program helps pay for a portion of Part D prescription drug plan costs, including Part D premiums, deductibles and copayments. Depending on your income and assets, you may qualify for a full or partial subsidy. Social Security Administration (SSA) and Centers for Medicare & Medicaid Services (CMS) work together to administer LIS/Extra Help. The SSA estimates the average annual value of LIS is $4,900 per person.
Applications can be submitted both online and in paper form. To determine your eligibility, start by taking an online assessment at BenefitsCheckUp®. Online applications are available in English and Spanish (SSA accepts electronic signature to complete the application.) Paper applications can be requested from the SSA to be sent by mail or a copy can be obtained at your local SSA office. A decision letter will be mailed to the applicant upon determination of eligibility, usually within 3 weeks of a completed application. Once found eligible, participants receive LIS for at least the remainder of the year.
The program provides several key benefits:
Access to prescription drug coverage
Waiver for Part D late enrollment penalty
Eligibility for several Special Enrollment Periods (SEP) as participants can change plans once during each of the first 3 quarters and again during the Annual Enrollment Period (Oct. 15 - Dec. 7)
Potential auto-enrollment in Medicare Savings Programs (such as QMB, SLMB, and QI)
LIS/Extra Help Eligibility Requirements
To be eligible for LIS you must satisfy three requirements or one special condition*:
Have Medicare Part A and/or Part B
Live within the U.S. (50 states or Washington D.C.)
Meet additional eligibility criteria
Receive some form of Medicaid (community or institutional), Supplemental Security Income (SSI), or be enrolled in a Medicare Savings Program (such as QMB, SLMB and QI)*
Those receiving either Medicaid, SSI or enrolled in a Medicare Savings Program do not need to apply for LIS. They may be automatically enrolled in LIS. The program offers two levels of help, full and partial. Those eligible have several Special Enrollment Periods available -- once during each of the first three quarters of the year and once during Annual Enrollment (Oct. 15 – Dec. 7).
What does full help cover?
Full Help covers those with lower incomes/fewer resources. Both the deductible and the plan premium for Part D are waived; for the premium to be waived, enrollment in a “benchmark” plan is required (meaning the plan is below the LIS premium amount). People with full Extra Help will pay copays of between $1.30-$3.60 for generic drugs, and between $3.90-$8.95 for brand name drugs. After their total out-of-pocket drug expenses reach the catastrophic threshold ($6,350 in 2020), the beneficiary has no copays.
What does partial help cover?
Partial Help covers those with slightly higher incomes/resources. The premium is either waived or an incomed-based sliding scale is used to determine benefits. The prescription drug plan has a $89 deductible, a 15% coinsurance (for covered drugs) and copays of $3.60 generic/$8.95 brand-name medications after reaching the $6,350 total out of pocket spending limit annually.
LIS works with other Medicare and Social Security assistance programs, so those enrolled do not need to apply for LIS as they automatically will receive it and not encounter a late enrollment penalty. CMS sends a letter to participants confirming their enrollment. However, it is to note that not everyone who qualifies for LIS will qualify for MSP, if you experience this issue contact your local benefits enrollment center to assist you.