The Low Income Subsidy Program (LIS) helps seniors on Medicare to pay for their Medicare Part D prescription Drug, copays, coinsurance and deductibles. One of the biggest expenses that Seniors have for their healthcare is their prescription drug costs. Many Seniors struggle with these cost and do not realize there may be help to pay for prescription drugs, deductibles, copays and co insurances through a program run by the Social Security Administration (SSA) called the Low Income Subsidy program (LIS) or as many people know it “Extra help”. In 2017 there were nearly 14 million seniors enrolled in the program and that number has only grown by today. The program is based on income and household size and can bring somebodies prescription costs down to as low as $1.30 per prescription. Today we are going to discuss the Low Income Subsidy Program (LIS) that assist seniors bring down their medication costs, how it works and who is eligible. Please do not forget to like and subscribe

 What is LIS / Extra Help 

• The Low income Subsidy (LIS) is a program run by the Social Security Administration 
• Designed to assists low income seniors pay for some or most of their Medicare Part D and Prescription Drug costs
• It has varying levels of assistance based on somebody’s income and household size
• The program is separate from Medicaid or Medi-Cal and does not have the same income restrictions or asset requirements as Medicaid or Medi-Cal

 Who qualifies for Extra help –

• There are a variety of ways to be eligible for LIS
• You must be eligible for Medicare 

• • If somebody is already in another low income program like:  Medicare Savings Program Or Medicaid / Medi-Cal will usually be automatically enrolled into the LIS or Extra help program
• If your income is higher, then you may get sent a letter asking you to apply, from the Social Security office.
• If your income is under $19,380 for an individual or $26,100 for a Couple you will be likely able to get one of the levels of LIS coverage
• There are some asset limits to the plan, but not everything counts as income, things like:
  • Your home you live in
  • Your car 
  • Your personal possessions like jewelry 
• These are not counted against your eligibility for the program 
• And LIS is not subject to estate recovery – this means they will not come back to your estate to collect money for any benefits your received under the LIS program. 

Different Levels of LIS

• There are four different levels of LIS based primarily on income and household size
• As your income goes up you get a different level of benefit to help pay for your prescriptions 
• For example 

 LIS Level 1 

• May or may not have both Medicare and Medicaid / Medi-Cal
• This level is based on a very specified income level
• Must have income above 100% FPL and below 135% of the FPL 
• For a household of 2 in 2020 that would be income less than $23,514 a year but more than $17,240 a year  
• Will if be automatically enrolled into the LIS program if they have Medicaid / Medi-Cal or may need to apply depending on their income being above the Medicaid Medi-Cal level
• If somebody is on LIS level 1 this will change, there prescription drug cost will drop down to  $3.60 cents for generic prescription drug copay and $8.95 for brand name prescription drug copays

LIS Level 2 

• People on LIS Level 2 will usually have the lowest income 

• Usually will have both Medicare and Medicaid 
• Additionally, they will have a household income that less than 100% of FPL
• For household of 2 in 2020 that would be less than $17,240 a year
• Or $1,436.67 a month
• People on Level 2 will be automatically enrolled into the LIS program when they enroll into Medi-caid / Medi-Cal 
• Prescription drug cost will go to $1.30 for generics prescription copays and $3.90 for brand name prescriptions copays 

LIS Level 3

• For people who are institutionalized
• Will make another video specifically for this level, so not going to cover it today

LIS Level 4 

• Usually for people who have the highest incomes which are not eligible for Medicaid / Medi-Cal and make income below 150% FPL 
• This means the income for 2 in 2020 is less than $26,100 a year or $2,175 a month
• Will need to actively apply for the LIS program and will not likely be automatically enrolled 
• For people in level 4 their drug costs will go to 15% co-insurance for their drugs initially and then go to $3.60 Copay for Generic prescriptions copays and $8.95 for brand name prescription drug copays 

Elimination of Part D late enrollment penalty 

• Aside from bringing down the cost of prescription drugs there are two special benefits to getting the LIS program 
• The first is, if you are eligible for LIS it will get rid of any Part D late enrollment penalty
• For example, if somebody enrolled late to Medicare Part D and has a penalty once the LIS starts it will remove the penalty permanently 
• This is Regardless if the person stays on LIS or not 
• Second it will allow recipients to change their Medicare plans 1 time every quarter,or 4 times a year, instead of 1 a year during the Annual Election Period like people who only have normal Medicare
• Even if you are not taking any medications, if you are eligible for LIS there are still some great advantages to getting the program 

Ways to apply

• There are a few ways to apply for LIS 
• You can apply any time through the year

• You can Apply online through the SSA.gov website or you can submit a paper application
• The SSA website and the paper application are below in English and Spanish  
• One final note is that LIS is not automatically renewed for all levels
• If somebody does have the LIS levels for higher income they may have to re-apply every year 

Thank you so much for watching, if you have questions about your Medicare or Medicare health plan options please feel free to contact us and we can make a new post or video to cover your questions. We here at California know health insurance weather it is private health insurance, Medicare, Medicaid / Medi-Cal, Medigap or health insurance for your small business. It can be very confusing coming from your work insurance and trying to look at options on the private market or turning 65 and trying to figure out which Medicare option is best for you. That is exactly what we can do, we can walk you through your options and help you find the plans that fits your needs and your budget.

Resources:

1.   LIS application website : https://www.ssa.gov/benefits/medicare/prescriptionhelp/
2.   LIS paper Application

• English : https://www.ssa.gov/forms/ssa-1020b-ocr-sm-inst.pdf
• Espanol: https://www.ssa.gov/forms/ssa-1020b-ocr-sm-sp-inst.pdf