Adult Medicaid Manual MA-2310 TAKING THE LIS APPLICATION

REVISED 11/01/11 - CHANGE NO. 17-11

I. Introduction and overview

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) established the Medicare Prescription Drug Program, also known as Medicare Part D. This program went into effect on January 1, 2006. There are two parts to the prescription drug benefit: 1) the Low Income Subsidy (LIS), also referred to as “extra help”, and 2) prescription drug coverage through a Medicare Prescription Drug Plan (PDP) or Medicare Advantage Prescription Drug Plan (MA-PD).

The MMA created the prescription drug plan to assist Medicare beneficiaries with prescription drug costs. The basic coverage includes an annual deductible and cost-sharing or co-payments of 25% up to the initial coverage limit (this amount changes yearly) in total drug costs. The beneficiary is then responsible for 100% of prescription drug costs until the total cost reaches the catastrophic limit. Refer to NC Department of Insurance website for the LIS Eligibility Chart, for yearly standards. The gap in coverage where the beneficiary is responsible for 100% of drug costs is referred to as the “donut hole”. After a beneficiary reaches the catastrophic limit in total drug costs, the co-pay for prescriptions is 5%. There is a monthly premium.

Individuals can apply for the LIS for assistance with the premium, deductible and co-payments of a PDP. In order to receive the Part D coverage, the individual must also enroll in a PDP. LIS assistance is available for Medicare beneficiaries who have income less than 150% of the federal poverty level and who meet an asset test.

Medicaid recipients who are enrolled in Medicare no longer receive prescription coverage through Medicaid. They will continue to be eligible for Medicaid to pay other covered services. Medicaid recipients are automatically eligible for the LIS and do not need to apply.

Individuals who are not automatically eligible for the LIS may apply for the extra help at SSA or Medicaid offices. SSA has developed an automated system for the application process. The LIS application is available on the internet (on-line) at www.socialsecurity.gov. There is also a scannable paper application, SSA-1020, Application for Help with Medicare Prescription Drug Plan Costs. The Medicaid office must take an LIS application if a Medicare beneficiary wishes to apply at the local department of social services. Unless the applicant insists that dss process the application, you will forward the LIS application electronically or mail it to SSA for processing.

The county is only responsible for taking the LIS application and does not assist a Medicare beneficiary in choosing a PDP. For assistance with enrolling in a PDP or for any questions about Part D coverage, a beneficiary should call 1-800-MEDICARE (1-800-633-4227) or they may visit the Medicare web site at www.medicare.gov.

REVISED 11/01/11 - CHANGE NO. 17-11