Along with the launch of Medicare Part D in 2006 came a program for individuals whose income and resources were limited, providing assistance with the cost of their medications. This program is called Low Income Subsidy (LIS), or Extra Help, and covers 12.5 million individuals as of March, 2019. LIS individuals qualify to receive assistance in paying their Part D costs, including premium, deductible, copays, and the coverage gap. As agents, it’s important that we understand not only the benefits of LIS but how to help our clients enroll in the program, one that could save them hundreds, even thousands of dollars, per year.
LIS Qualifications – 2019
In order for a Medicare beneficiary to qualify for LIS, they must meet both income and resource guidelines, which are set each year by CMS and are based on the Federal Poverty Level. For 2019, the LIS qualification levels are as follows:
Monthly Income – $1,561 individual or $2,113 married
Resources – $14,390 individual or $28,720 married
Eligible income includes anything the clients receive like wages, social security payments, or support from other family members. Assistance for food, mortgage, rent, heating fuel or gas, electricity, water or property taxes does not apply as income. Resources include real estate (other than the home the client lives in), bank accounts, cash stocks, bonds, mutual funds and IRAs. Primary residence, personal possessions, personal vehicle, burial plots, irrevocable burial trusts, life insurance policies and back payments from Social Security or SSI do not count.
2019 LIS Levels and Benefits
Based on where the client’s income and resources fall, they are placed at various levels with different benefits for each. Many carriers have methods to check a client’s LIS level, here’s a brief description of the benefits for each level so you know what you’re dealing with.
Levels 1 & 2
- 100% premium subsidy
- Deductible reduced to $0
- Maximum copays up to out-of-pocket threshold – $3.40 for generic/preferred multi-source drug and $8.50 for all others
- Maximum copay above out-of-pocket threshold – $0
- 100% premium subsidy
- Deductible reduced to $0
- Maximum copayments – $0
- This level is specific to institutionalized full benefit dual eligible clients
- Sliding scale premium subsidy – 25%, 50% or 75%
- Maximum deductible – $85
- Maximum copays up to out-of-pocket threshold – 15%
- Maximum copays above out-of-pocket threshold – $3.40 for generic/preferred multi-source drug and $8.50 for all others
Another benefit of LIS, regardless of the client’s level, is the elimination of any Part D late enrollment penalty.
The premium subsidy through the LIS program is based on each Part D region’s benchmark premium, which changes each year. To see a list of 2019 and 2020 benchmark premiums you can visit Q1Medicare.com’s website, which will show you how each of the benchmarks have changed since 2006.
Individuals with 100% premium subsidy will have their Part D plans paid for up to the benchmark premium. If individuals are enrolled in a Part D plan, they will receive the payment in full and will be responsible to pay for the premium over the benchmark level. For instance, in the state of Wisconsin, if a full-LIS client is enrolled in a Part D plan with a monthly premium of $42.80 this year, LIS will cover the benchmark amount of $40.80, leaving the client to pay $2 per month for their premium.
For LIS beneficiaries enrolled in a MAPD plan, LIS will help cover the portion of the MAPD premium (if applicable) that applies to their Part D benefits. For instance, the AARP MedicareComplete HMO in Green Bay, WI has a $26 monthly premium, broken down to $7.20 for the MA portion and $18.80 for the Part D portion. Someone with full subsidy would have the $18.80 portion covered, leaving them to pay the MA portion, $7.20, each month.
Signing up for LIS
Individuals that are on Medicare and Medicaid or receiving SSI payments are automatically enrolled in the LIS program, but other individuals need to apply for the coverage if they believe they qualify. This is a great opportunity for agents to be part of that process as you can ensure the application is completed accurately, help the client to better understand the program and its benefits, provide a level of comfort to the client since they already have a relationship with you, and the client will always equate the value of their LIS benefits with you!
There are two methods for individuals to enroll in the program, paper application or electronic application. The paper application can be obtained by calling Social Security or visiting a local office, but the online PDF copy cannot be used. Processing time for the paper application is 21-28 days, whereas the clients can receive a decision in half the time utilizing the online method, which can be found on the SSA website. https://www.ssa.gov/prescriptionhelp
If a client is approved, they will receive a “purple letter” from LIS confirming their status.
Special Election Period
Another great reason to help your clients enroll in the LIS program is the special election period it generates, giving you the opportunity to expand your PDP and MAPD sales beyond the annual enrollment period. Regardless of the client’s LIS level, he or she qualifies to change his or her Part D or MAPD plan one time each quarter for the first three quarters of the year:
- January through March
- April through June
- July through September
LIS beneficiaries can still change their PDP/MAPD plans October through December, but they must utilize another SEP, if applicable, or enroll during the AEP.
LI NET Program
Newly eligible LIS clients can find immediate help for the cost of their prescriptions even before they sign up for a PDP or MAPD plan through a program call LI NET. The Limited Income Newly Eligible Transition program was created by CMS to provide immediate, temporary medication access for low-income Medicare beneficiaries without prescription drug coverage.
For instance, if your client learns that he/she qualifies for LIS in the middle of the month and needs to fill prescriptions right away, have the client bring the purple letter to the pharmacy and ask the pharmacy to file the claim under the LI NET program. If the pharmacy has any issues processing the claim, they can reach out to the help desk at 1-800-783-1307.
The LIS program is a great way to go above and beyond for your low-income clients to help them save even more on their prescription drug coverage. For questions on the LIS programs and the opportunity, reach out to the JSA Marketing Team at 800-203-0433.