Part D Low Income Subsidy

by Mary Jane Stern

Medicare Part D offers a Low Income Subsidy (LIS) or extra help to pay for part of the costs associated with the

plan.  The Part D costs include your deductible, premium and copayments.  Some beneficiaries may qualify for all or a partial subsidy.

Of course this isn’t easy to understand because each state has different benchmark plans or average premium cost, plus the formula is very complex.

What’s happening in 2010

If you are already enrolled in an LIS program, Medicare will mail you a notice in early November for your extra help for 2010, but you will probably be reassigned a new Part D plan beginning January 1, 2010.  CMS is very specific as they will be mailing this notice out on Blue Paper.  So keep an eye open in November for this mailing.

Why is Medicare Reassigning?

Medicare will be reassigning people who fall into 3 factors:

• You qualify for the full (100%) premium
• Your 2009 Part D plan is raising their premium above the low-income premium amount
• You were enrolled by Medicare and your Part D Plan is leaving the Medicare program.

Extra Help for Medicare Beneficiaries

If you are a Medicare beneficiary you may qualify for extra help.  Unfortunately, the rules are not easy to follow.  First you need to understand what Medicare considers a countable asset and countable income, because you will hear those terms used quite frequently.

Your Countable Assets

CMS states that you have countable assets at or below $11,990 for an individual and $23,970 for couples.  According to CMS/Medicare assets are defined as resources that can be converted to cash within 20 days.

What Counts

• Stocks
• Bonds
• Checking accounts
• Savings Accounts
• Retirements plans

What Doesn’t Count

• Your Principal home
• Your car
• Your funeral and burial space up to $1,500
• Life Insurance Policy with a face value of up to $1,500
• Wedding rings and family heirlooms

What’s Your Countable Income?

According to CMS countable income is below 150% of the Federal Poverty Level (FPL).  In 2008, 150 percent of the FPL for the 48 contiguous states and the District of Columbia

• Single person – $1,300 per month
• Married couple – $1,750 per month
• Alaska –single person  – $1,625 per month
• Hawaii –married couple – $2,012.50 per month

Your countable assets and your countable income are going to be the first two questions you are asked when you apply for extra help.  You could very well fall within these guidelines and be able to get all or some of your costs with Part D paid or at least reduced.

Start NOW and go to http://www.medicare.gov/medicarereform/help.asp and you can apply online for extra help with Part D.  Or check out https://ssl3.benefitscheckup.org/ to see if you qualify and where you can get more help within your State.

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