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I am qualified for Medicaid and Medicare, so why am I still paying a monthly premium for my Part D drug plan?

Category: Online Tool Tips
Updated: Jan, 27 2023

There are several reasons why you are still paying a monthly Medicare Part D plan premium even though you are qualified for Medicaid or Extra Help benefits:

(1) Your plan does not meet the benchmark premium.

You have chosen to enroll in a Medicare Part D prescription drug plan that does not qualify for your state's Low Income Subsidy $0 monthly premium, and you are responsible for a portion of your monthly. 

For example, the 2023 California $0 LIS Benchmark Premium is $38.86 and if you are qualified for full Extra Help and enrolled in a "basic" Medicare Part D plan with a premium below (or slightly over) the benchmark, you would pay a $0 premium. So if you chose the 2023 Wellcare Classic (PDP) Medicare Part D plan that has a $29.00 premium, you would pay a $0 premium.

However, in the same situation, if you enrolled in the 2023 AARP MedicareRx Saver Plus (PDP) that has a $50.70 premium, you would pay $11.80 per month premium (roughly the $50.70 premium - the $38.86 benchmark premium).

(2) Your Extra Help status has changed.

If you no longer qualify for full Extra Help Benefits, you may be paying a higher portion of your Medicare Part D plan's premium - even when the Medicare Part D prescription drug plan qualifies for the $0 monthly Low-Income Subsidy (LIS) premium.

The California 2023 Clear Spring Health Value Rx (PDP) Medicare Part D plan that has a $25.80 premium, you would pay a $0 premium with full (100%) Extra Help benefits.  But, if you were eligible for only partial Extra Help benefits, you would pay a higher premium ($6.40, $12.90, or $19.30 depending on your level of subsidy).  In our example, if you qualified for 50% Extra Help, you would pay a premium of $12.90.

Part D plan premium when not meeting the LIS $0 premium

(3) Your plan is not a "basic" plan and includes "enhanced" features.

You have chosen to enroll into a Medicare Part D prescription drug plan that offers "enhanced" features and does not qualify for the $0 monthly Low-Income Subsidy (LIS) premium.  The $0 LIS premium only applies to Medicare Part D plans with "basic" or standard features.

Using California as our 2023 example state that has a $38.86 benchmark premium, and you qualify for full Extra Help benefits and decide to join the 2023 AARP MedicareRx Walgreens (PDP) that has a $35.20 monthly premium, you would pay a monthly premium of $2.90 because the plan has "enhanced" features and does not qualify for the $0 premium even though the $35.20 premium is less than the $38.86 benchmark.

Part D plan premium when not meeting the LIS $0 premium


If you are qualified for your state's Medicaid program, then you automatically qualify for the Medicare Part D Extra Help program, and the cost of your monthly Medicare Part D premiums will be covered up to a certain level – called your state’s Low-Income Subsidy (LIS) Benchmark Premium.

For example, if you live in a state with a benchmark premium of $25, the Medicare Part D Extra Help program will pay for your monthly premium up to this $25 level (or slightly above) and you will have a $0 premium when you enroll in a "basic" Medicare Part D plan with a premium around $25 or lower.

But, if your chosen Medicare Part D plan's monthly premium is over the benchmark amount or if your chosen plan has enhanced features, you can be charged the amount of the premium that exceeds the benchmark, or the portion of the premium that covered the cost of the enhanced features.

So, in this example, if you Medicare plan has a $30 monthly premium, you may be charged the $5 additional cost over your state's $25 LIS benchmark premium.

Question:  Where do you find your state's LIS Benchmark Premium?

Each year, the Centers for Medicare and Medicaid Services (CMS) releases the LIS $0 premium Benchmark amount for all states. To see how these benchmark values have changed over the past years, please see: “2023 State Low-Income Subsidy Benchmark Premium Amounts - with a comparison of benchmark changes since 2006".

Question:  Where can I see if a Medicare Part D plan qualifies for a $0 premium?

You can also see whether a Medicare Part D plan qualifies for your state’s $0 LIS premium using our Medicare Part D Plan Finder where all Part D plans available in each state are shown and LIS $0 premium plans are noted.
Here is an example link to the stand-alone 2022 California Medicare Part D plans (you can choose a link to view plans in another state): PDPFinder.com/CA

You will notice on the PDP Finder results page that the column showing "$0 Prem LIS?" is marked with "Yes" and a mint-green background for qualifying plans.

LIS $0 premium

For example, using the link above, if you scroll down through the California plans, the 2023 “Cigna Secure Rx (PDP) - S5617-158” shows a $25.80 premium and "Yes" in the "$0 Prem LIS?".

So, for anyone who qualifies for full-LIS benefits, they would have a $0 premium because this Medicare plan meets the Low-Income Subsidy benchmark premium for California.  When you look at the LIS Benchmark page, you will notice that the 2023 California LIS benchmark premium is $38.86.

If a plan does not qualify for the full Low-Income Subsidy $0 Premium, the "$0 Prem LIS?" column will state "No" and there will be no green background.

However, if you select your level of subsidy in the "LIS Subsidy Amount" question in the filter box, the premiums shown for all plans will be those corresponding to your level of subsidy.  For example, when the "100%" subsidy is checked, you will note that the 2023 Humana Walmart Value Rx Plan (PDP) shows a premium of $5.60.

A Note About "auto-enrollment" and "Choosers"

If you qualify for the full Medicare Part D Low-Income Subsidy (LIS or Extra Help), Medicare may randomly, auto-enroll you into a Medicare Part D plan that qualifies for your state’s $0 monthly premium - without regard to your prescription usage.

However, you have the right to select your own Medicare Part D plan once per quarter during the first nine (9) months of the plan year.

If you select your own Medicare plan, you become a "chooser" and Medicare will not automatically change your enrollment for the next plan year -- even if your selected Medicare Part D plan no longer qualifies for the state’s full-LIS $0 monthly premium.  In other words, it is possible that in 2022 you chose a Medicare Part D plan that qualified for the $0 premium and in 2023, the same Medicare plan no longer qualifies for the $0 premium and since Medicare will not automatically change your plan, you have a monthly premium to pay, One such example is the 2022 Humana Basic Rx Plan (PDP) that no longer qualifies for the $0 premium. Beneficiaries with 100% LIS will need to pay a monthly premium of $13.40, unless they switch plans.

However, as noted above, Medicare beneficiaries receiving Extra Help (Low-Income Subsidy) have a dual eligible Special Enrollment Period (SEP).  You can use this SEP once per quarter to enroll in a new Medicare prescription drug plan and your new plan will take effect on the first day of the following month. You can determine your premium (based on your LIS Subsidy) for all Medicare Part D plans through our PDP-Finder.

An example of annual plan changes where the plan no longer qualifies for the $0 premium.

All of our Medicare plan finder (PDP-Finder.com or MA-Finder.com) and comparison tools show if a plan qualifies for the full LIS $0 monthly premium. The examples below are from 2015/2016, however the same features are available for the current plan year.

As shown in the results of our PDP-Compare.com for 2016 Florida Aetna plans, you can see (circled in red below) that the 2016 Aetna Medicare Rx Saver plan no longer qualifies for the $0 LIS premium.
Florida Aetna Medicare Part D plan changes 2015 to 2016
Please remember that all Medicare Part D plans, even Part D plans that do not qualify for the full LIS $0 premium, can offer their plans at a reduced premium for people receiving full or partial Extra Help.

Our 2016 PDP-Finder.com Florida Medicare Part D plans - 100% LIS premium search shows there were 22 plans available in Florida ranging in premium from $0 to $146.60. To see premiums for the various full and partial LIS subsidies, you would select the appropriate subsidy level in the criteria box. See the red box in the image below:
PDP-Finder LIS Subsidy Criteria
A sampling of the results are shown below. The red circle shows the monthly premium at a specific LIS subsidy level -- in this case 100%. The blue circle shows whether the plan qualifies for the full LIS $0 monthly premium. 
Sample of 2016 Florida Part D plans showing 100% LIS premium

As you can see in the above chart, if you receive a 100% LIS subsidy (at the bottom of the red circle), you would be charged a premium of $11.00 per month for the 2016 Florida Aetna Medicare Rx Saver plan.

An example of how Medicare premiums can change year-to-year and with your level of Extra Help benefits.

The 2015 Florida Aetna Medicare Rx Saver (PDP) plan qualified for the $0 premium, but it no longer qualified for the $0 premium in 2016.  This means that, even if you qualified for 100% LIS benefits, your monthly Medicare Part D premium was raised to  $11.00 - and not the $0 premium of the previous year.

As shown above, here is another chart of the monthly premium at Extra Help levels of 25%, 50%, 75%, and 100%  from our 2016 Aetna Medicare Rx Saver (PDP) Plan Benefits & Contact page.  The 2016 Florida benchmark premium was $28.07, so even with 100% Extra Help, you would still pay a premium of $11 per month.

2016 Florida Aetna Medicare Rx Saver (PDP)
$39.10 $32.10 $25.10 $18.00 $11.00

For more details on your Medicare Part D plan premium, you can speak with a Medicare representative who can look into your records and provide more information about why you are paying a premium.

You can telephone Medicare at 1-800-633-4227, select the prescription drug option, and then choose the option to speak with a Medicare representative or say "representative" several times during the automated menu options. Once connected, you can explain your situation to a Medicare representative and ask for assistance determining whether you are paying the correct premium.

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