Part D EXTRA HELP for 2013

Requirements to Become Eligible for Extra Help

This reviews the two main requirements for the Part D low income subsidy (LIS), that is, “Extra Help,” for the next calendar year, 2013, and also indicates what the basic structure of the Part D benefit looks like for those who qualify for it during 2013. The two main requirements are, of course, low income and few resources. And the new resource and income limits for 2013 have just been announced.

In 2013 you can qualify for Extra Help if your income is at or below $17,235 AND your resources are at or below $13,300 for an individual; or if your income is at or below $23,265 AND your resources are at or below $26,580 for a couple. Remember that neither your home nor your car or vehicle count as resources. And it has been said a thousand times before, but bears repeating, if your income or resources are ANYWHERE near these limits, apply, because there are many, complex rules as to what counts as income and what counts as resources, and as to how these are calculated if additional people live in your household. (And note that all the income levels are higher in the states of Hawaii and Alaska than we show here.)

All this is fully explained in Chapter 7 (which begins on page 99) of Managing Your Medicare.

And to summarize before we get into the details, if you do qualify for Extra Help, it will pay all or part of your Part D monthly premium, all or part of your annual deductible, and will eliminate or reduce your co-payments on drugs. (Full payment of the premium is restricted to plan premiums which are at or below the “benchmark” premium for your state. The benchmark premiums for each state for 2013 are shown the end of this text.) The specifics are as follows:

Basic Structure of the Extra Help Benefit in 2013

Those who qualify for Extra Help at these levels will pay no premium, and will not be subject to the deductible, and the cost of their drugs will be as follows:

If you have Medicaid AND:

You live in a nursing home or are in a community-based waiver program:

You pay nothing.


Your income is at or below $11,490 (individual) or $15,510 (couple):

You pay $1.15 for a generic or preferred brand, and $3.50 for a non-preferred brand.*


Your income is above $11,490 (individual) or $15,510 (couple):

You pay $2.65 for a generic or preferred brand, and $6.60 for a non-preferred brand.*


If you don't have Medicaid but your state helps you pay your Medicare premiums (that is, you are in the “Medicare Savings Program”) OR you get supplemental security income (SSI):

You pay $2.65 for a generic or preferred brand, and $6.60 for a non-preferred brand.*


If you are not in the categories above, but you qualify for Extra Help because your income and resources levels are as shown below, the cost of your drugs will be as follows, and you will be subject to an annual deductible and monthly premium payments as follows:


If your income is below $15,512 (individual) or $20,939 (couple) and your resources are at or below $8,580 (individual) or $13,620 (couple):

You pay $2.65 for a generic or preferred brand, and $6.60 for a non-preferred brand.* You pay neither a premium nor a deductible.


If your income is below $15,521 (individual) or $20,939 (couple) and your resources are at or below $13,300 (individual) or $26,580 (couple):

You pay 15% of the cost of your drugs, plus you are subject to a $66 annual deductible.** You pay no premium.


If your income is at or below $16,086 (individual) or $21,714 (couple) and your resources are at or below $13,300 (individual) or $26,580 (couple):

You pay 15% of the cost of your drugs, plus you are subject to a $66 annual deductible, and you must pay 25% of your premium.**


If your income is below $16,661 (individual) or $22,490 (couple) and your resources are at or below $13,300 (individual) or $26,580 (couple):

You pay 15% of the cost of your drugs, plus you are subject to a $66 annual deductible, and you must pay 50% of your premium.**


If your income is below $17,235 (individual) or $23,265 (couple) and your resources are at or below $13,300 (individual) or $26,580 (couple):

You pay 15% of the cost of your drugs, plus you are subject to a $66 annual deductible, and you must pay 75% of your premium.**

*If your “drug expenses” ever exceed $4,750 in 2013, you will pay nothing for any prescription. (These are “Full Subsidy” beneficiaries.)

**If your “drug expenses” in the year ever exceed $4,750 in 2013, you will pay not more than $2.65 for a generic or preferred brand, and $6.60 for a non-preferred brand. (These are “Partial Subsidy” beneficiaries.)

Note on resource limits: Technically, the resource limits are $7,080 for an individual and for $10,620 a couple for “Full Subsidy” beneficiaries, and $11,800 for an individual and $23,580 for a couple for “Partial Subsidy” beneficiaries. However, in practice, when determining resources for Extra Help, the Social Security Administration allows a burial expense allowance of $1,500 for an individual or $3,000 for a couple, so these resource limits are almost always shown as $8,580 for an individual and $13,620 for a couple for “Full Subsidy” beneficiaries, and $13,300 for an individual and $26,580 for a couple for “Partial Subsidy” beneficiaries, and these adjusted limits are the ones shown above.

Benchmark Premiums for 2013

This is the most that Extra Help will pay for a premium in each state. If you choose a Part D drug plan with a monthly premium higher than this, you will have to pay all of the difference between these amounts and the premium. (Note that, depending on a plan’s formulary and pricing structure, this might possibly be cheaper for an Extra Help beneficiary than choosing a plan whose premium is below the benchmark.)

Alabama $33.70; Alaska $34.70; Arizona $29.40; Arkansas $34.10; California $29.90; Colorado $31.90; Connecticut $31.30; Delaware $35.00; District of Columbia $35.00; Florida $24.80; Georgia $34.20; Hawaii $33.30; Idaho $42.10; Illinois $30.90; Indiana $37.20; Iowa $34.60; Kansas $36.00; Kentucky $37.20; Louisiana $37.30; Maine $33.50; Maryland $35.00; Massachusetts $31.30; Michigan $34.20; Minnesota $34.60; Mississippi $34.60; Missouri $34.60; Montana $34.60; Nebraska $34.60; Nevada $20.30; New Hampshire $33.50; New Jersey $37.00; New Mexico $22.50; New York $43.20; North Carolina $32.00; North Dakota $34.60; Ohio $29.90; Oklahoma $32.80; Oregon $37.50; Pennsylvania $36.60; Rhode Island $31.30; South Carolina $38.70; South Dakota $34.60; Tennessee $33.70; Texas $31.80; Utah $42.10; Vermont $31.30; Virginia $30.10; Washington $37.50; West Virginia $36.60; Wisconsin $38.20; Wyoming $34.60.

Attention Qualified Medicare Beneficiaries (QMBs) – Increased Access to Care Beginning January 1, 2013

As many QMBs and Medicare counselors know, it can be difficult for QMBs to get access to physician care as in most states the Medicaid state agency (which runs the QMB program) will pay a physician (or other practitioner) only the difference between what Medicare pays for a service and what Medicaid would pay for the same service. In many cases, this is nothing, and, coupled with the fact that a physician or practitioner cannot balance bill a QMB, they often refuse to see one of these beneficiaries, as they believe their reimbursement is insufficient.

However, beginning January 1, 2013, a provision of the Affordable Care Act requires states to pay primary care physicians and practitioners at full Medicare rates. And among other things, this means that for QMBs, state agencies must pay the full difference between what Medicare allows and the (usual) 80% that it actually pays. So it well may be that your doctor or practitioner will now see you, as they will get reimbursed for their care for you at what they would for any other Medicare beneficiary (presuming they take assignment, of course). There is a catch, and it is that this provision in the law speaks only to those practicing family medicine, general internal medicine, and pediatric medicine, so you are not covered by this if you see a specialist. But it will quite possibly apply to someone you do go to seek care from, and you can bring this provision up when you try to make an appointment with a primary care physician or practitioner.

Renewal of the Outpatient Therapy Exceptions Process and of the Prepayment Review of and Preapproval Process for “Over-Limit” Outpatient Therapy Services

The just-signed American Taxpayer Relief Act of 2012 has several important provisions regarding outpatient therapy. Currently there is a statutory limit, or cap, on the dollar amount of outpatient therapy services a beneficiary can receive in a year. This limit has been in place for some years, and although the dollar amount changes each year, in 2013 the limit is $1,900 for physical and speech therapy combined, and a separate limit of $1,900 for occupational therapy. But for several years Congress has allowed exceptions to these limits, by permitting therapists, when these caps are exceeded, to certify that the additional, over-limit therapy services they are providing are medically necessary for the beneficiary. This act renews this exceptions process for all of 2013.


It also requires that, as in 2012, these therapies received in a hospital outpatient department be counted toward these caps, and imposes a new requirement that therapies received in the outpatient department of a critical access hospital also be included (these types of hospitals are often in rural areas).

And the law also renewed a requirement that outpatient therapy claims get special reviews. So if you have outpatient physical, speech language, and / or occupational therapy services covered by Medicare this calendar year, and Medicare has approved $3,700 or more for your therapy, you may get a notice from Medicare telling you that limits or caps are bring imposed on your outpatient therapy for the remainder of the year. (You may get this even if you are no longer actually getting therapy.)

What’s this all about?

Beneficiaries who are or will be receiving outpatient physical, speech language, and / or occupational therapy in 2013 need to be aware that the law requires Medicare Administrative Contractors (MACs), which are the companies that Centers for Medicare & Medicaid Services contracts with to review and process Medicare claims, to individually review all therapy claims that exceed a limit of $3,700 for a beneficiary. This limit is, as are the statutory limits, imposed on physical and speech therapy services combined, and, separately, on occupational therapy. So there are two, separate $3,700 thresholds. In addition, it requires that the review must be made before the Medicare Administrative Contractor processes and pays the claim.

Because these reviews would hold up payments of appropriate claims, the Centers for Medicare & Medicaid Services is also permitting therapy providers to request, from the Medicare Administrative Contractors, preapproval of any therapy services they render to a beneficiary. In this way, when they have actually performed the therapy and submit a claim, the medical necessity of the services had already been approved, and the claim can go right to payment. And rather than preapprove each and every therapy session, therapists must request the preapproval of blocks or chunks of 20 therapy days at a time.

This should concern beneficiaries, but only to a limited extent. These limits do not apply to beneficiaries in Medicare Advantage (Part C), but only to those in Original (fee-for-service) Medicare. And they are only for outpatient therapy, not for therapy you may get in as an inpatient during a Medicare covered hospital or Skilled Nursing Facility (SNF) stay. Nor does it apply to therapy you get under a home health plan of care.

But if these exceptions don’t apply, and you have gotten a lot of therapy this calendar year, you may get a voluntary Advance Beneficiary Notice (ABN) from your therapy provider that your services may not be covered. And whether you get one or not, beneficiaries need to understand that Centers for Medicare & Medicaid Services is taking the position that if you receive therapy over and above the statutory $1,900 limit and it is not medically necessary, you are not protected by the limitation-of-liability provision as the care is statutorily excluded, like eyeglasses or dental care. Normally, if a beneficiary gets a service that is not medically necessary, even when Medicare denies the claim, the beneficiary does not have to pay the provider for the care as it is assumed the beneficiary had no way of knowing that the care was not covered, unless of course they got an Advanced Beneficiary Notice saying that it wasn’t. So that’s why you may get one from your therapist, even if in this case they are not required to give it to you. But if you do get one, or if you think your therapy may exceed the $3,700 cap, you may wish to defer your therapy and ask that your therapist get preapproval from Medicare for your therapy. The Medicare Administrative Contractors have to OK or deny a preapproval request in 10 working days, or it is automatically approved, so the decision should not be too long in coming, and you may prefer waiting a bit to make sure whether or not you’ll be liable for the therapy services. And if it does deny the preapproval request, you may appeal its denial using the usual appeals process. (This is an exception to the usual rule that an appeal can be made only after a service has been given and the Medicare claim denied.)