Notices to Low Income Subsidy (LIS) “Extra Help” Beneficiaries

Beginning this month (October 2012) the Centers for Medicare & Medicaid Services (CMS) will send out a variety notices to those Medicare beneficiaries that have the Low Income Subsidy (Extra Help) about changes that affect them.

One such notice is the “Change in Extra Help Co-payment” notification letter. This letter, mailed early in the month, is on orange paper, and informs beneficiaries who have the Low Income Subsidy, and who will continue to have it in 2013, that their co-payment level will change beginning January 1, 2013, and what the new level (up or down) will be. (This is CMS Product No. 11199.)


The following affect those Low Income Subsidy beneficiaries who are in stand-alone drug plans (PDPs).

In late October CMS will send letters on blue paper to those beneficiaries that it has reassigned to a new drug plan in 2013. Two different events cause these reassignments.

First. If a Low Income Subsidy beneficiary’s current drug plan is leaving the Medicare program in 2013, CMS’s “Reassignment Notice – Plan Termination” notification, which is printed on blue paper, will tell them this, and will also tell them which plan they have been reassigned to. While they have already been informed by their plan that it will terminate, this is the first notice they receive telling them what their new plan will be. They are also told that they can join a different plan if they wish. These beneficiaries should indeed use the Plan Finder to make sure that the plan they have been reassigned to is the best one for their individual circumstances, which mostly depend on which prescriptions they routinely take. (This is CMS Product No. 11208.)

Second. If a full subsidy Low Income Subsidy beneficiary’s current drug plan is raising its monthly premium to an amount over the benchmark premium amount, and they were automatically enrolled in their current plan by CMS, they will receive a “Reassignment Notice – Premium Increase” notification letter. It is also printed on blue paper, and will tell them that, on January 1, 2013, they will automatically be reassigned to a plan whose premium is at or below the benchmark, and which plan this is. They are also given the option of calling their current plan if they wish to stick with it and pay the premium difference. Finally, they are reminded that as a Low Income Subsidy beneficiary they may change their plan at any time. This notice also includes a list of all plans in their state with premiums at or below the benchmark. These beneficiaries should also use the Plan Finder to make sure that the plan they have been reassigned to is the best one for their individual circumstances, which, again, mostly depend on which prescriptions they routinely take. (This is CMS Product No. 11209.)

Finally, in early November, CMS will send out a notification to those Low Income Subsidy beneficiaries who chose a drug plan on their own, and whose plan is raising the premium over the 2013 benchmark amount, that they will now have to pay a portion of their monthly Part D premium. This “LIS Choosers Notice” is printed on tan paper. These beneficiaries should also use the Plan Finder to determine if the plan they are in continues to be the best one for their individual circumstances, which, again, mostly depend on which prescriptions they routinely take, but in this case will also depend on their new premium liability. (This is CMS Product No. 11267.)

And something new this year: In December those Low Income Subsidy beneficiaries who were reassigned (either because their drug plan left the program or their plan’s premium went over the benchmark) will be sent a letter called the “Reassign Formulary Notice” printed on blue paper. It will tell them which the drugs they have been taking are on their new plan’s formulary, that is, the plan they were reassigned to. This will give them a good idea of how well the new plan’s formulary covers the drugs they take.

Two items of interest. One is that the drug information is from the period January 1 to August 31, 2012, so if the beneficiary has added or dropped prescriptions since then, this information will be a bit out-of-date. (Up to 30 drugs will be displayed.) The other is the letter will also tell the beneficiary whether or not their new plan has any rules which apply to the specific drugs they take, for example, prior authorization. The beneficiary is also told that they can change plans and even do this after the annual enrollment period has ended as Low Income Subsidy beneficiaries can do so at any time. In light of this information, if the beneficiary has any concerns, they should use the Plan Finder to see if another plan would work better than the one they have been reassigned to. (The letter will have a list of all the plans with premiums below the benchmark available to the beneficiary. These letters are CMS Product No. 11475 (for reassignments) and 11496 (for terminations).)


And the following applies to those Low Income Subsidy beneficiaries whose will continue to be eligible for the subsidy in 2013 and who are in a Medicare Advantage Plan which is non-renewing or undergoing a service area reduction, and who are being reassigned to a stand-alone drug plan (PDP). (See my posting of October 26 for more details on these reassignments.) They will, in late October or early November, be sent an “MA Reassignment Notice.” This notification, printed on blue paper, will tell them about the reassignment and identify their new drug plan. It will also tell them they have the option of joining a Medicare Advantage Plan (with or without drug coverage) or of changing to a different stand-alone drug plan. This notice also includes a list of all stand-alone drug plans in their state with premiums at or below the benchmark. Beneficiaries who receive this need to carefully think about joining a Medicare Advantage Plan if they have had success with this approach, especially because with their low incomes they may not be able to afford a Medicare Supplement policy (Medigap). And they can use the Plan Finder to find a Medicare Advantage Plan, using the specific prescriptions they currently take. And if they opt for Original Medicare (that is, they do not enroll in a Medicare Advantage Plan), they can use the Plan Finder to locate the best stand-alone drug plan for them. (This notice is CMS product No. 11443.)

These beneficiaries will also be sent a letter (the "Reassign Formulary Notice," on blue paper, in December) telling them which the drugs they have been are taking are on their new plan’s formulary, that is, the plan they were reassigned to. See the paragraph beginning “Two items of interest:,” above, for other details on this letter.