Pennsylvania Medicare Education and Decision Insight

The Medicare Part D Low-Income Subsidy (LIS) Helps You Save Money On Rx Drug Costs

If your income is low and you are concerned about how you will afford to pay your Medicare deductibles, part B premiums, and medication co-payments, our PA MEDI counselors can help determine if you are eligible to receive extra help through the Medicare Part D Low Income Subsidy (LIS). This program can dramatically lower your prescription drug costs to help you save thousands of dollars per year.

You May Now Qualify For Extra Help – Who Should Apply

If you receive any assistance through the Medical Assistance Program (Medicaid), even if it is only payment of the Medicare Part B Premium, you should qualify for extra help (the LIS) automatically and you do not need to apply. All others who may be eligible should apply for this valuable extra assistance. General guidelines apply, but keep in mind that your income can be higher than these limits and you may still qualify because not all income/assets are counted. Since January 1, 2010, life insurance (asset) and in-kind support and maintenance (income) are not counted when the Social Security Administration determines whether someone qualifies for a subsidy and how much help he/she will get. This means that individuals that may not have qualified in the past could now qualify!

Eligibility & How to Qualify For the Medicare Rx Drug Low Income Subsidy

Individuals must meet income and asset guidelines to qualify for a low-income subsidy (LIS). Keep in mind that income and assets could be higher than the amounts listed below. The amounts listed below do include the $1,500 per person disregard given to applicants who plan to use their assets for funeral/burial expenses and other allowable deductions.

Full Subsidy: Countable Income must be below 135% FPL (see table below)Countable Assets must be below $8,660 (if single) / $13,750 (if married)

Partial Subsidy: Countable Income must be below 150% FPL (see table below)Countable Assets must be below $13,440 (if single) / $26,860 (if married)

*Federal Poverty Levels increase each year as the cost of living increases.

Household size: If an applicant has a relative living in the home (other than a spouse) who depends on the applicant for at least half of their financial support, this should be noted on the application. SSA will then use the appropriate income limit for the number of people in the household but will not count the relative’s income (if any).

How Is income Counted?
Applicants must report all of their income on the LIS application (unless the application specifically states not to report it, i.e.: interest income, etc.). Remember: some income may not be counted by SSA when determining LIS eligibility.

Unearned income: Gross (total) unearned income must be reported on a monthly basis before any deductions (such as the Medicare Part B premium, child support, etc.) are taken out. When determining LIS eligibility, SSA will not count the first $20/month of unearned income.

Earned income: Earned income must be reported on a yearly basis with the consumer projecting the gross amount (before taxes or deductions are taken out) they expect to earn that year. If earnings fluctuate during the year, figure the average monthly income and multiply by it by twelve to project the yearly amount. When determining if the applicant meets the LIS eligibility income limits, SSA will not count the first $65 per month ($780/year) as well as ½ of the remaining earned income projected.

How Are Assets Counted?
SSA asks for information about certain assets owned by an applicant/her spouse on the LIS application. Individuals must report the information, but SSA will not necessarily count all those assets (or the entire value of the asset) when determining whether someone qualifies for the LIS.

SSA will count:

• Any real estate or property that someone owns (other than their primary residence)

• Liquid assets (i.e.: stocks, bonds, IRAs, CDs, 401ks, annuities) unless an applicant can show that a particular liquid asset cannot be converted to cash within 20 days

SSA will not count:

• Certain assets such as an applicant’s primary residence, motor vehicles, burial plots/spaces, irrevocable burial accounts, and life insurance. Other resource exclusions may apply

• $1,500 of assets for the applicant and $1,500 for her spouse (unless the individual states on the application that he/she does not plan to use resources to pay for funeral or burial expenses).

How to Apply For the Medicare Rx Drug Low Income Subsidy

Procedure & Anticipated Timeline

PA MEDI works with the Benefits Data Trust (BDT) to submit LIS applications electronically. PA MEDI workers, volunteers, and Community Partners can download a copy of the application at www.ssa.gov/prescriptionhelp and complete the paper application with the consumer.

Community Partners forward completed paper applications every two weeks to the Huntingdon-Bedford-Fulton Area Agency on Aging. Local PA MEDI programs forward completed applications to BDT every two weeks. BDT inputs the information from paper applications into the online application and submits the information directly to SSA.

Local PA MEDI programs and Community Partners can refer consumers to the PACE Application Center (1-800-866-1807) or contact the BDT Application Center on behalf of the client. The Application Center is staffed by BDT and they will complete and submit the online application. This may expedite the receipt of benefits.

SSA does not require individuals to submit verification of information reported on the application. If SSA needs documentation to finish processing the application, they will contact the applicant by phone or by mail.

Application Tips

Questions & Application Status: Contact SSA with questions or to follow-up on the status of the application: 1-800-772-1213.

SSA will send a notice telling the applicant if they qualify for the subsidy and how much help they will get. If an individual does not agree with the SSA determination, they can appeal. If someone is approved, SSA will also notify Medicare so Medicare can update their system. Additional help can be obtained on the web at http://www.phlp.org/