“Benchmark” Part D Plans and the Low Income Subsidy

Part D Information for State Policy Makers Part D mation State Policymrs October xx, 2007 Nov ember 25, 2009 “Benchmark” Part D Plans and the Low Income Subsidy “Extra Help” - the Low Income Subsidy Nearly 10 million Medicare Part D beneficiaries are enrolled in “Extra Help,” or the low-income subsidy. The low-income subsidy covers almost all prescription drug costs and provides assistance with Part D plan premiums for eligible beneficiaries. The Centers for Medicare & Medicaid Services (CMS) encourages beneficiaries to apply for the low-income subsidy, which in 2010 is estimated to provide an average benefit of $1,725 at the pharmacy and as much as $316 in annual premiums. The Low-Income Premium Subsidy Amounts In August, CMS announced the 2010 low-income premium subsidy amounts for each region. A Part D prescription drug plan (PDP) qualifies as a “benchmark plan” if it offers basic Part D coverage with premiums equal to or lower than the regional low-income premium subsidy amount. The low-income premium subsidy amount does not cover the enhanced premium. The regional low-income premium subsidy amounts are calculated annually. The Federal government pays up to 100 percent of the Part D premium for LIS beneficiaries who are in plans with premiums at or below the regional low-income premium subsidy amount. Low-income beneficiaries who are eligible for the full premium subsidy may enroll in a benchmark plan without paying ...