Low-income subsidies are intended to reduce or eliminate enrollees' out-of-pocket expenses associated with the drug benefit, including premiums, deductibles, copayments, and costs associated with gaps in coverage. Part D plans are required to offer a statute-defined standard benefit or one that is actuarially equivalent (or in the case of Medicare Advantage prescription drug plans, an enhanced plan that is available for no additional premium).

Any individual who qualifies for Medicaid based on his or her income and assets is automatically deemed eligible for the Medicare prescription drug low-income subsidy. Additionally, those who receive premium and/or cost-sharing assistance from Medicaid through the Medicare Savings Programs (QMB, SLMB, QI), and who are only eligible for Social Security cash assistance, are also automatically deemed eligible for low-income subsidies and do not need to apply for them.

Eligibility for low-income subsidies under Part D is based on income and resources. Social Security benefits, veterans benefits, public and private pensions, annuities, and in-kind support are counted as income. Eligibility is based solely on the income of the applicant (and spouse, if applicable), regardless of other household members with income. Resource levels used to determine eligibility for low-income subsidies are greater (more generous) than those used for SSI and Medicaid.

Beneficiaries who apply and are found eligible for low-income subsidies (LIS) must also enroll in a Medicare drug plan for the subsidies to take effect.

For MIIA members, the low-income subsidies will appear in the your monthly detailed billing statement. The entire amount of the low-income subsidies must be passed on to the member.