2675 Medicare Part D Subsidy

Effective January 1, 2006 persons who are entitled to Medicare Part D are eligible for help with payment of Medicare Part D premiums, co-payment and deductibles if the requirements outlined in this section are met. See 2911.10 for Medicare Part D information.

Persons who are not entitled to Medicare Parts A and B are not entitled to Part D and, therefore, not eligible for the subsidy. Eligibility for the subsidy shall be determined regardless of the beneficiary’s enrollment status with a Part D plan. In order to realize the benefits of the subsidy, the individual must be enrolled in a Medicare Prescription Drug Plan, or designated alternative.

Although persons who are enrolled in an employer, union or group sponsored prescription drug plan which has been designated as a replacement for Medicare Part D [see 2911.10 (4) (e)] do not have to enroll in a Part D plan, such individual will generally not realize a benefit with a subsidy determination. The subsidy will only provide assistance with costs related to a plan through Medicare Part D, not through a retiree plan.

2675.1 Deemed Eligibles - Persons determined eligible for the following types of medical assistance are deemed eligible for the Medicare Part D subsidy without a separate application:

• Title XIX (full Medicaid) under any program;
 

• QMB, LMB or Expanded LMB; and
 

• Medically Needy with a met spenddown.
 

An eligibility file is sent to CMS each month containing those individuals who meet the above criteria. The file is commonly known as the MMA file. Upon receipt of the monthly file, CMS confirms the individual is an eligible Medicare beneficiary and awards the subsidy. CMS will then communicate subsidy information to the Part D PDP.

NOTE: Persons receiving SSI benefits through Social Security, but not Medicaid, are also deemed eligible for the subsidy.

2675.2 Determined Eligibles - Both DCF and the Social Security Administration share responsibility for determining subsidy eligibility for all other applicants. While the Medicare beneficiary may apply with the entity of their choice to determine eligibility, an individual seeking subsidy coverage at DCF shall be directed to Social Security to file an application. However, eligibility staff may assist the individual in completing the SSA-1020 subsidy application form. The form should then be date stamped and mailed to the SSA processing center at:

Social Security Administration
Wilkes-Barre Data Operations Center
P.O. Box 1020
Wilkes-Barre, PA 18767-9910

Social Security will process the application and notify the applicant of the subsidy eligibility determination. An individual who has already applied for subsidy coverage with SSA should wait for that determination to be completed. However, the individual may file another SSA-1020 subsidy application with DCF while the original SSA application is still pending. The application shall be accepted, date stamped, and forwarded to SSA for processing.

2675.3 Effective Date of Subsidy - For deemed eligibles, subsidy eligibility is effective with the first month of eligibility under one of the deemed groups above (including prior medical eligibility) and Medicare Part D entitlement. For individuals determined eligible, by the Social Security Administration (determined eligibles), subsidy coverage is effective no earlier than the month of application. Prior medical coverage is not applicable to Medicare Part D Subsidy determined eligibles.

Examples: Person 1 applies in May 2006 for LMB, including prior medical. He is approved effective February 1. Subsidy eligibility is effective February 1 with the LMB approval. Person 2 applies in May 2006 for subsidy only at the Social Security Administration and is approved. Subsidy coverage begins May 1, 2006 as there is no prior coverage.

To realize the benefit of the subsidy, the individual must enroll in Medicare Prescription Drug Plan (see 2911.10).

2675.4 Benefits and Levels of Subsidy - Those eligible for subsidy will receive benefits according to countable income, assets and deemed status. The eligible person receives assistance with Medicare cost sharing - premiums, deductibles and copayments. The level of premium assistance is limited and is equal to the lesser of the following:
 

• The monthly Part D premium for basic prescription drug coverage or the portion of the monthly Part D premium attributable to basic prescription drug coverage for a Part D plan that has an enhanced alternative coverage; or
   
• The greater of the low-income benchmark premium amount or the lowest monthly beneficiary premium for a prescription drug plan that offers basic prescription drug coverage. In 2017, the benchmark premium amount for Kansas is $30.27.
   

1. Deemed Eligibles - For deemed eligibles, the subsidy will cover the standard or basic Medicare Part D premium; the annual deductible; and the cost of all formulary and approved prescription drugs. Prescription copayments will apply as follows:
    
   • Eligible for QMB, LMB or Expanded LMB Only - $3.30 per generic or preferred brand and $8.25 for all others;
      
   • Eligible for full Medicaid coverage, including a met spenddown under Medically Needy - $1.20 per generic or preferred brand and $3.70 for all other prescriptions for persons with incomes at or below 100% FPL. $3.30 copayments per generic or preferred brand and $8.25 for all other prescriptions will apply to those with higher incomes (including HCBS recipients);
      
   • Eligible for full Medicaid coverage and a resident of an approved institutional living arrangement (nursing facility, state hospital, ICF - MR, swing bed hospital, head injury rehabilitation facility or other approved Medicaid approved institution) for at least 30 days and persons enrolled with PACE - no copayments apply for covered prescription drugs.
      
2. Determined eligibles - Determined eligibles are eligible for assistance with premiums, copayments and deductibles at a level established by their countable income and resources. The following subsidy levels and benefits apply to SSA determined eligibles:
    
   • Subsidy Level 0 - Persons with countable incomes at or below 135% of poverty and countable resources which do not exceed $7,390 for a single or $11,090 for 2 or 3 person plans. Coverage level is equal to that of a Medicare Savings Plan eligible.
      
   • Subsidy Level 1 - Persons with countable incomes at or below 135% of poverty and whose countable resources are below the resource limit which cannot exceed $12,590 for a single or $24,600 for 2 or 3 person plans. The standard/basic monthly premium is covered. Beneficiaries have a $82.00 annual deductible and 15% co-payment per prescription. $3.30/$8.25 copayments apply after the catastrophic limit is reached.
      
   • Subsidy Level 2 - Persons with countable incomes greater than 135% of poverty and at or below 140%, and whose countable resources are below the limit which cannot exceed $12,590 for a single or $24,600 for 2 or 3 person plans, 75% of the standard monthly premium is covered. Beneficiaries have a $82.00 annual deductible and 15% copayments per prescription. $3.30/$8.25 copayments apply after the catastrophic level is reached.
      
   • Subsidy Level 3 - Persons with countable incomes greater than 140% of poverty and at or below 145%, and whose countable resources are below the limit which cannot exceed $12,590 for a single or $24,600 for 2 or 3 person plans, 50% of the standard monthly premium is covered. Beneficiaries have a $82.00 annual deductible and 15% copayments per prescription. $3.30/$8.25 copayments apply after the catastrophic level is reached.
      

   • Subsidy Level 4 - Persons with countable incomes greater than 145% of poverty and below 150% below 150%, and whose countable resources are below the limit which cannot exceed $12,590 for a single or $24,600 for 2 or 3 person plans, 25% of the standard monthly premium is covered. Beneficiaries have a $82.00 annual deductible and 15% copayments per prescription. $3.30/$8.25 copayments apply after the catastrophic level is reached.
     
     Late Enrollment Fees - An individual enrolling in Medicare Part D after their initial enrollment period may be subject to a late enrollment fee. The late enrollment fee is added to the monthly premium amount and is equal to 1% of the national base premium amount times the number of uncovered months since the initial enrollment period. An individual qualifying for subsidy coverage will not be subject to a late enrollment fee.
      

2675.5Termination of Subsidy Coverage – When subsidy eligibility ends, the date actual coverage terminates depends on whether the individual was deemed or determined eligible.

1. Deemed Eligibles – An individual deemed eligible for subsidy coverage any time during the year will be continuously eligible thru December of that year. If deemed eligible for the month of July or later, subsidy coverage will be continuous through December of the next year. This automatic extension of coverage occurs even if the original underlying medical assistance has ended.
   
   Example 1: An individual files an application for medical assistance and is deemed eligible for subsidy coverage effective February 2011. In June 2011 the medical case is closed and the individual is no longer deemed eligible. Even though medical assistance has ended effective June 30, 2011, deemed subsidy coverage automatically extends through the end of December 2011.
   
   Example 2: Same situation as in Example 1, except the medical case closes effective August 31, 2011. Since this individual was deemed eligible on or after July 2011, subsidy coverage automatically extends through the end of December 2012.
   
   
2. Determined Eligibles – An individual determined eligible for subsidy coverage by Social Security will lose coverage effective with the date they no longer meet program requirements. There is no automatic extension of coverage for SSA determined eligibles.
   
   Example: An individual files an application with Social Security and is approved for subsidy coverage beginning in March 2011. Program eligibility requirements are no longer met in September 2011 and the case closes effective October 31, 2011. Determined subsidy coverage ends the date of program closure.
   
   
3. Competing Eligibility Records – A deemed eligibility record sent by the state to CMS will always override a SSA determined eligibility record. Therefore, once a deemed record has been received by CMS, the individual is eligible for coverage as indicated in 1. above, even if there is a prior existing determined record from SSA.
   
   Example: An individual files an application with Social Security and is approved for determined subsidy with coverage level 3 beginning April 2011. The individual later files an application for QMB coverage and is approved beginning July 2011 with deemed subsidy coverage. Once the deemed record is received by CMS, the individual will have subsidy coverage from July 2011 through December 2012 at the QMB level.