Kansas Economic and Employment Support Manual

2675 Medicare Part D Subsidy - "See Policy Memo 05-05- 02 -   re: Applications for Medicare Part D Subsidy.

Effective January 1, 2006 persons who are entitled to Medicare Part D are eligible for help with payment of Medicare Part D premiums, co-payment and deductibles if the requirements outlined in this section are met. See 2911.10 for Medicare Part D information.

Persons who are not entitled to Medicare Parts A and B are not entitled to Part D and, therefore, not eligible for the subsidy. Eligibility for the subsidy shall be determined regardless of the beneficiary’s enrollment status with a Part D plan. In order to realize the benefits of the subsidy, the individual must be enrolled in a Medicare Prescription Drug Plan, or designated alternative.

Although persons who are enrolled in an employer, union or group sponsored prescription drug plan which has been designated as a replacement for Medicare Part D [see 2911.10 (4) (e)] do not have to enroll in a Part D plan, such individual will generally not realize a benefit with a subsidy determination. The subsidy will only provide assistance with costs related to a plan through Medicare Part D, not through a retiree plan.

2675.1 Deemed Eligibles - Persons determined eligible for the following types of medical assistance are deemed eligible for the Medicare Part D subsidy without a separate application:

• Title XIX (full Medicaid) under any program;
 

• QMB, LMB or Expanded LMB; and
 

• Medically Needy with a met spenddown.
 

An eligibility file is sent to CMS each month containing those individuals who meet the above criteria. The file is commonly known as the MMA file. Upon receipt of the monthly file, CMS confirms the individual is an eligible Medicare beneficiary and awards the subsidy. CMS will then communicate subsidy information to the Part D PDP.

NOTE: Persons receiving SSI benefits through Social Security, but not Medicaid, are also deemed eligible for the subsidy.

2675.2 Determined Eligibles - Both SRS and the Social Security Administration share responsibility for determining subsidy eligibility for all other applicants. The Medicare beneficiary may apply with the entity of their choice to determine eligibility. All Medicare beneficiaries must be screened for coverage through Medicaid or a Medicare Savings Plan prior to the subsidy determination. The following apply:

1. Non- Financial Eligibility - The individual must meet all general eligibility requirements of 2100.
    
2. Financial Eligibility - The income and resource methodologies of the QMB program in 2671.3 are applicable, with the exception of household size. All income and resource exemptions also apply to this group     . If countable resources exceed the limit in 5130 or if countable income exceeds the appropriate poverty level standard (see Appendix Item #F-8), there is no subsidy eligibility.
    
3. Assistance Plan - The assistance plan for Part D Subsidy includes the applicant and any legally responsible persons living with the individual (see 4300). Where one spouse is in a long term care arrangement or receiving benefits from another Medicaid program, the following rules apply:
    
   1. Separate plans for spouses shall be used where one individual is living in an NF or in an out-of-home HCBS or PACE arrangement. Income allocated to the community spouse is countable for the community spouse . Resources are determined by ownership.
       
   2. If living together, HCBS, PACE or Working Healthy spouse is included in the plan of the subsidy applicant/recipient spouse. A separate case number is used for the subsidy applicant. The LTC or Working Healthy spouse is coded DI for the subsidy determination. The LTC spouses income before allocation to community spouse or dependents is used for the subsidy documentation. However, the subsidy household size may be adjusted for dependent family members.
       
4. Number in Subsidy Household - The applicable poverty level standard is determined using the total number in the subsidy household. For assistance planning purposes, only the income and resources of the applicant/recipient and legally responsible persons is used. However, the subsidy household includes the applicant, spouse, parent(s) for minor children and all dependent family members of the applicant or spouse. A dependent family member is an individual related by blood, marriage or adoption, who is dependent on the applicant or spouse for at least one half of their financial support. Verification is not required.
    

2675.3 Effective Date of Subsidy - For deemed eligibles, subsidy eligibility is effective with the first month of eligibility under one of the deemed groups above (including prior medical eligibility) and Medicare Part D entitlement. For determined eligibles, subsidy is effective no earlier than the month of application. Prior medical coverage is not applicable to Medicare Part D Subsidy.

Examples: Person 1 applies in May 2006 for LMB, including prior medical. He is approved effective February 1. Subsidy eligibility is effective February 1 with the LMB approval. Person 2 applies in May 2006 for subsidy only and is approved. Subsidy coverage begins May 1, 2006 as there is no prior coverage.

To realize the benefit of the subsidy, the individual must enroll in Medicare Prescription Drug Plan (see 2911.10).

2675.4 Benefits and Levels of Subsidy - Those eligible for subsidy will receive benefits according to countable income, assets and deemed status. The eligible person receives assistance with Medicare cost sharing - premiums, deductibles and copayments. The level of premium assistance is limited and is equal to the lesser of the following:
 

• The monthly Part D premium for basic prescription drug coverage or the portion of the monthly Part D premium attributable to basic prescription drug coverage for a Part D plan that has an enhanced alternative coverage; or
   
• The greater of the low-income benchmark premium amount or the lowest monthly beneficiary premium for a prescription drug plan that offers basic prescription drug coverage. In 2008, the benchmark premium amount for Kansas is $30.62.
   

1. Deemed Eligibles - For deemed eligibles, the subsidy will cover the standard or basic Medicare Part D premium; the annual deductible; and the cost of all formulary and approved prescription drugs. Prescription copayments will apply as follows:
    
   • Eligible for QMB, LMB or Expanded LMB Only - $2.25 per generic or preferred brand and $5.60 for all others;
      
   • Eligible for full Medicaid coverage, including a met spenddown under Medically Needy - $1.05 per generic or preferred brand and $3.10 for all other prescriptions for persons with incomes at or below 100% FPL. $2.25 copayments per generic or preferred brand and $5.60 for all other prescriptions will apply to those with higher incomes (including HCBS recipients);
      
   • Eligible for full Medicaid coverage and a resident of an approved institutional living arrangement (nursing facility, state hospital, ICF - MR, swing bed hospital, head injury rehabilitation facility or other approved Medicaid approved institution) for at least 30 days and persons enrolled with PACE - no copayments apply for covered prescription drugs.
      
2. Determined eligibles - are eligible for assistance with premiums, copayments and deductibles at a level established by their countable income and resources (see 5130). Eligibility and Subsidy level is documented on the KAECSES SUDD screen. The following levels, codes and benefits apply:
    
   • Subsidy Level DØ - SUDD code of DØ: Persons with countable incomes at or below 135% of poverty and countable resources which do not exceed $6,120 for a single or $9,190 for 2 or 3 person plans. Coverage level is equal to that of a Medicare Savings Plan eligible.
      
   • Subsidy Level D1 - SUDD code of D1: Persons with countable incomes at or below 135% of poverty and whose countable resources are below the resource limit identified in 5130 which cannot exceed $10,210 for a single or $20,410 for 2 or 3 person plans. The standard/basic monthly premium is covered. Beneficiaries have a $50.00 annual deductible and 15% co-payment per prescription. $2.25/$5.60 copayments apply after the catastrophic limit is reached.
      
   • Subsidy Level D2 - SUDD code of D2: Persons with countable incomes greater than 135% of poverty and at or below 140%, and whose countable resources are below the limit identified in 5130 which cannot exceed $10,210 for a single or $20,410 for 2 or 3 person plans,     75% of the standard monthly premium is covered. Beneficiaries have a $56.00 annual deductible and 15% copayments per prescription. $2.25/$5.60 copayments apply after the catastrophic level is reached.
      
   • Subsidy Level D3 - SUDD code of D3: Persons with countable incomes greater than 140% of poverty and at or below 145%, and whose countable resources are below the limit identified in 5130 which cannot exceed $10,210 for a single or $20,410 for 2 or 3 person plans,     50% of the standard monthly premium is covered. Beneficiaries have a $56.00 annual deductible and 15% copayments per prescription. $2.25/$5.60 copayments apply after the catastrophic level is reached.
      
   • Subsidy Level D4 - SUDD code of D4: Persons with countable incomes greater than 145% of poverty and below 150% below 150%, and whose countable resources are below the limit identified in 5130 which cannot exceed $10,210 for a single or $20,410 for 2 or 3 person plans,     25% of the standard monthly premium is covered. Beneficiaries have a $56.00 annual deductible and 15% copayments per prescription. $2.25/$5.60 copayments apply after the catastrophic level is reached.
     
     Late Enrollment Fees - The subsidy will provide partial coverage of any surcharge due to a late enrollment fee into Medicare Part D. For persons deemed eligible for the subsidy and for those eligible for Subsidy Level DØ, 20% of the late enrollment fee will be covered by the subsidy for the first five (5) years. No penalty will be imposed after 5 years. Persons eligible for subsidy levels 1, 2, 3 and 4 are responsible for the full surcharge.
      

2675.5 Subsidy and Other Medical Programs - For most beneficiaries, determined Medicare Part D subsidy is a stand-alone benefit. When determining eligibility for Subsidy only, a Special Medical Indicator of MD (Medicare D) is entered on the PICK screen in KAECSES. No other medical eligibility will be communicated to the MMIS when this code is entered. Subsidy benefits are authorized by completing appropriate information on the KAECSES SUDD screen and authorizing the case on SPEN.

1. Medically Needy - When Subsidy coverage and Medically Needy coverage are determined for members of the same assistance plan, subsidy eligibility is authorized and shall continue, regardless of spenddown status.
    
2. QMB - For persons determined eligible for QMB, a subsidy determination must be completed for the period beginning with the month of application through the month prior to the month QMB eligibility begins.
    

2675.6 Changes in Subsidy Levels - Changes are processed according to rules of the MS program. However, the PDP may elect to not apply negative changes (e.g., an increase in mid-year premiums) except at specified times.

2675.7 Termination of Subsidy Coverage - Subsidy coverage is terminated when the individual no longer meets eligibility requirements. When the individual becomes eligible for a deemed subsidy group (except for Medically Needy as per above), subsidy benefits are terminated on the last of the month before coverage under the deemed category begins. Other medical coverage is never delayed or denied due to the existence of subsidy eligibility.