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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?


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 into 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 premium that is above the state's benchmark premium.

For example, the 2020 Florida $0 LIS Benchmark Premium is $28.47 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 2020 SilverScript Choice (PDP) Medicare Part D plan that has a $25.20 premium, you would pay a $0 premium.

However, in the same situation, if you enrolled into the 2020 Humana Basic Rx Plan (PDP) that has a $40 premium, you would pay $11.50 per month premium (the $40 premium - the $28.47 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.

Using the same above example of the Florida 2020 SilverScript Choice (PDP) Medicare Part D plan that has a $25.20 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 (although still less than the full $25.20 premium).  In our example, if you qualified for 50% Extra Help, you would pay a premium of $12.60.

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 Florida as our 2020 example state that has a $28.47 benchmark premium, and you qualify for full Extra Help benefits and decide to join the 2020 Humana Walmart Value Rx Plan (PDP) that has a $13.20 monthly premium, you would pay a monthly premium of $5.90 since the plan has "enhanced" features and does not qualify for the $0 premium even though the $13.20 premium is significantly less than the $28.47 benchmark.

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


Background:

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.

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: “2020 State Low-Income Subsidy Benchmark Premium Amounts - with a comparison of benchmark changes since 2006".

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 2020 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 2020 “SilverScript Choice (PDP) - S5601-064” shows a $30.50 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 2020 LIS Benchmark page, you will also have seen that California had an LIS benchmark premium of $32.01.

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 EnvisionRxPlus (PDP)shows a premium of $0 and the 2020 Humana Walmart Value Rx Plan (PDP) shows a premium of $6.20

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 2019 you chose a Medicare Part D plan that qualified for the $0 premium and in 2020, the same Medicare plan no longer qualifies for the $0 premium and since Medicare will not automatically change your plan, you have a small monthly premium to pay (such as the Humana Walmart plan with a $6.20 premium), unless you switch plans.

However, as noted above, Medicare beneficiaries receiving Extra Help or qualifying for the 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. 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 PDP-Finder.com Florida Medicare Part D plans - 100% LIS premium search shows there are 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)
Full
Premium
25%
Subsidy
50%
Subsidy
75%
Subsidy
100%
Subsidy
$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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Tips & Disclaimers
  • The Medicare Advantage and Medicare Part D prescription drug plan data on our site comes directly from Medicare and is subject to change.
  • Medicare has neither reviewed nor endorsed the information on our site.
  • We provide our Q1Medicare.com site for educational purposes and strive to present unbiased and accurate information. However, Q1Medicare is not intended as a substitute for your lawyer, doctor, healthcare provider, financial advisor, or pharmacist. For more information on your Medicare coverage, please be sure to seek legal, medical, pharmaceutical, or financial advice from a licensed professional or telephone Medicare at 1-800-633-4227.
  • We are an independent education, research, and technology company. We are not affiliated with any Medicare plan, plan carrier, healthcare provider, or insurance company. We are not compensated for Medicare plan enrollments. We do not sell leads or share your personal information.
  • Benefits, formulary, pharmacy network, provider network, premium and/or co-payments/co-insurance may change on January 1 of each year. Our PDP-Compare.com and MA-Compare.com provide highlights of annual plan benefit changes.
  • The benefit information provided is a brief summary, not a complete description of benefits. For more information contact the plan.
  • Limitations, copayments, and restrictions may apply.
  • We make every effort to show all available Medicare Part D or Medicare Advantage plans in your service area. However, since our data is provided by Medicare, it is possible that this may not be a complete listing of plans available in your service area. For a complete listing please contact 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week or consult www.medicare.gov.
  • When enrolling in a Medicare Advantage plan, you must continue to pay your Medicare Part B premium.
  • Medicare beneficiaries with higher incomes may be required to pay both a Medicare Part B and Medicare Part D Income Related Monthly Adjustment Amount (IRMAA). Read more on IRMAA.
  • Medicare Advantage plans that include prescription drug coverage (MAPDs) are considered Medicare Part D plans and members with higher incomes may be subject to the Medicare Part D Income Related Monthly Adjustment Amount (IRMAA), just as members in stand-alone Part D plans. In certain situations, you can appeal IRMAA.
  • You must be enrolled in both Medicare Part A and Part B to enroll in a Medicare Advantage plan. Members may enroll in a Medicare Advantage plan only during specific times of the year. Contact the Medicare plan for more information.
  • If you are enrolled in a Medicare plan with Part D prescription drug coverage, you may be eligible for financial Extra Help to assist with the payment of your prescription drug premiums and drug purchases. To see if you qualify for Extra Help, call: 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048, 24 hours a day/ 7 days a week or consult www.medicare.gov; the Social Security Office at 1-800-772-1213 between 7 a.m. and 7 p.m., Monday through Friday. TTY users should call, 1-800-325-0778; or your state Medicaid Office.
  • Medicare evaluates plans based on a 5-Star rating system. Star Ratings are calculated each year and may change from one year to the next.
  • A Medicare Advantage Private Fee-for-Service plan (PFFS) is not a Medicare supplement plan. Providers who do not contract with the plan are not required to see you except in an emergency.
  • Disclaimer for Institutional Special Needs Plan (SNP): This plan is available to anyone with Medicare who meets the Skilled Nursing Facility (SNF) level of care and resides in a nursing home.
  • Disclaimer for Dual Eligible (Medicare/Medicaid) Special Needs Plan (SNP): This plan is available to anyone who has both Medical Assistance from the State and Medicare. Premiums, co-pays, co-insurance, and deductibles may vary based on the level of Extra Help you receive. Please contact the plan for further details.
  • Disclaimer for Chronic Condition Special Needs Plan (SNP): This plan is available to anyone with Medicare who has been diagnosed with the plan specific Chronic Condition.
  • Medicare MSA Plans combine a high deductible Medicare Advantage Plan and a trust or custodial savings account (as defined and/or approved by the IRS). The plan deposits money from Medicare into the account. You can use this money to pay for your health care costs, but only Medicare-covered expenses count toward your deductible. The amount deposited is usually less than your deductible amount, so you generally have to pay out-of-pocket before your coverage begins.
  • Medicare MSA Plans do not cover prescription drugs. If you join a Medicare MSA Plan, you can also join any separate (stand-alone) Medicare Part D prescription drug plan
  • There are additional restrictions to join an MSA plan, and enrollment is generally for a full calendar year unless you meet certain exceptions. Those who disenroll during the calendar year will owe a portion of the account deposit back to the plan. Contact the plan provider for additional information.
  • Medicare beneficiaries may enroll through the CMS Medicare Online Enrollment Center located at www.medicare.gov.
  • Medicare beneficiaries can file a complaint with the Centers for Medicare & Medicaid Services by calling 1-800-MEDICARE 24 hours a day/7 days or using the medicare.gov site. Beneficiaries can appoint a representative by submitting CMS Form-1696.