:: Low Income Subsidy
The new Medicare prescription drug law, the Medicare Modernization Act, establishes a low-income subsidy (LIS) program that offers financial assistance to low-income individuals. This program is being marketed as "extra help." In late May, the Social Security Administration (SSA) began sending notices to 20 million Medicare beneficiaries informing them that they may be eligible for this extra help. The subsidy level depends on an individual's income and the level of assets they have. If your income is below 150% of the federal poverty level (FPL) and you are a single individual with less then $10,000 in assets (or you are part of a family with less then $20,000 in assets) you may be eligible for a subsidy. Please refer to the chart below to determine if your income is below 150% of the federal poverty level. If your income is even close to this level, be sure to apply for extra help as not all income is counted (so you may qualify, even if you think your income is too high) and it will significantly reduce your premiums, co-payments and deductibles.
Medicare Part D will provide a full drug subsidy with low co-payments to Medicare beneficiaries with incomes up to 135% of the Federal Poverty Level ( FPL) and limited resources. The 2005 eligibility limits are $1097/month ($13,160/year) for an individual; $1,464/month ($17,561/year) for a couple. There will also be a partial subsidy of premium, deductible and co-insurance to Medicare beneficiaries with incomes up to 150% FPL and limited (but higher than allowed for full subsidy) resources. The income limit for this group is $1,217/month ($14,595/year) for an individual; $1,624/month ($19,485/year) for a couple.
In May, CMS began sending letters to dual eligibles as well as beneficiaries in Medicare Savings Programs ( QMB, SLMB or QI programs ) that they were deemed eligible for the LIS and would not need to apply. Around the same time, the Social Security Administration (SSA) sent letters to those who were not deemed eligible, but who may be eligible informing them that they could apply for the subsidy with either SSA or the state Medicaid office. Do not worry if you don’t receive a letter right away – while letters began being sent in mid-May, the ‘roll out’ will continue until August.
When applying for the subsidy, it is important to realize that some states have MSP eligibility requirements that are more liberal than LIS eligibility criteria. State Medicaid offices must screen for MSP eligibility; SSA offices are not required to do so. There are 37 states where the MSP criteria is more liberal than the LIS criteria.
Low Income Subsidy Criteria is based on income and assets. When determining eligibility, it is important to understand the differences between the two:
Income Criteria:
Counts
- Income of applicant & spouse
- In-kind contributions ( e.g. food, rent/mortgage, utility bills )
Does Not Count
- Income of other dependents in household
Assets Criteria:
Counts
- Cash and items readily converted to cash
- Stocks and bonds
- Checking and savings accounts
- Retirement accounts
- Whole life insurance with face value > $1,500
- Property ( other than your home )
Does Not Count
- Home
- Car
- Burial Space
- Personal Items ( jewelry, household goods )
- Funeral and burial expenses up to $1,500
Family Size |
100% of FPL |
135% of FPL |
150% of FPL |
|
|
1 |
$9,810 |
$13,160 |
$14,595 |
2 |
$13,070 |
$17,561 |
$19,485 |
3 |
$16,330 |
$21,962 |
$24,375 |
4 |
$19,590 |
$26,363 |
$29,265 |
5 |
$22,850 |
$30,764 |
$34,155 |
6 |
$26,110 |
$35,165 |
$39,045 |
7 |
$29,370 |
$39,566 |
$43,935 |
8 |
$32,630 |
$43,967 |
$48,825 |
|
|
For each additional
person add: |
$3,260 |
$4,401 |
$4,890 |
|
