The Medicare “Extra Help” program will pay for your monthly Medicare Part D plan premium if the amount of your Part D plan’s premium is not more than $2 over the subsidy limit in your State.

If you have been automatically enrolled into a Medicare Part D plan, it is possible (due to random enrollment) that you may be in a Part D prescription drug plan that has a 2008 monthly premium over the premium subsidy value. In such a case, the Centers for Medicare and Medicaid Services (CMS) will reassign you to a new Medicare Part D plan so that you will not pay the additional amount above the monthly premium subsidy.

Here is the CMS statement on 2008 re-assignment:

Information for People Medicare will Reassign to a New Plan in 2008

“Medicare is re-assigning certain people who currently have and continue to qualify for extra help into new Medicare Prescription Drug Plans for coverage effective January 1, 2008. Re-assignment is only for those who qualify for extra help as of January 1, 2008. Medicare is re-assigning people who:
1.) Qualify for the full (100%) premium subsidy whose Medicare Prescription Drug Plan premium in 2008 would increase above the regional low-income premium subsidy amount by more than a $1, and
2.) Medicare enrolled them in the plan. Medicare will mail these people a notice (CMS Publication No. 11209) on blue paper by early November [2007]. Medicare is also re-assigning people who qualify for extra help for the full premium subsidy whose Medicare Prescription Drug Plans are leaving the Medicare Program. Medicare will mail this notice (CMS Publication No. 11208) on blue paper by early November.” (http://www.cms.hhs.gov/ LimitedIncomeandResources/)

For example, if you live in Alabama and you were automatically enrolled in the Humana PDP Standard plan in 2007, the monthly premium was $18.20, which was fully under the Alabama premium subsidy amount of $29.60.  (See our 2007 Part D Plan Finder).  In 2008, the Humana PDP Standard plan premium is $25.60 – still well under the 2008 premium subsidy of $28.29.  (See our 2008 Part D Plan Finder). Since your Part D plan premium is fully covered, CMS will not automatically move you to another, lower cost Part D plan.

 Also, if you decided to choose a new Part D plan, you will need to pay any difference if the premium of your new 2008 prescription drug plan is above your State’s monthly premium subsidy.  Remember that your “extra help” benefits will pay some or all of your deductibles, co-payments, and co-insurance – so don’t over-spend.  Most importantly, be sure to choose a prescription drug plan that provides coverage for all of your medications.

Here is the CMS statement on non re-assignment for those who chose their own 2007 Part D plans:

Information for People Who Chose Their Own Plan
“By early November [2007], Medicare will send a notice (CMS Publication No. 11267) to certain people whose premium cost will increase but Medicare isn't re-assigning because they joined their own plan. Medicare is mailing this notice to people who qualify for the full (100%) premium subsidy whose Medicare Prescription Drug Plan premium in 2008 would increase above the regional low-income premium subsidy amount by more than a $1. This notice lets people know the cost for their drug plan premiums in 2008 and their options to stay in their plan or join another plan, including plans for which they will pay no monthly premium.” (http://www.cms.hhs.gov/ LimitedIncomeandResources/)

(data source: http://www.cms.hhs.gov/ MedicareAdvtgSpecRateStats/ RSD/itemdetail.asp? itemID=CMS1198057

“The regional low-income premium subsidy amount for each PDP region is the greater of the low-income bench-mark premium amount for the PDP region or the lowest monthly beneficiary premium for a prescription drug plan that offers basic prescription drug coverage in the PDP region. These amounts are provided in a spreadsheet called “PartDLow IncomePremium SubsidyAmounts 2008-final.csv” which can be accessed on the CMS website through the following path: CMS Home > Medicare > Health Plans > Medicare Advantage - Rates & Statistics > Ratebooks & Supporting Data > 2008 > Regional rates and benchmarks “