The Medicare LIS beneficiaries PDP reassignment is completed each year by CMS. CMS reassigns PDP plans for LIS beneficiaries that go over regional LIS benchmarks and do not comply with the accepted premium amount for the following calendar year.
In some cases CMS will also reassign PDPs plans that are terminating in a specified area. This action also applies to MA plans when they are reducing the area they provide service in. In either of these instances, Medicare beneficiaries are enrolled in an alternate plan that is compliant with the LIS benchmarks for the specific area.
What is LIS
LIS (Low Income Subsidy) provides financial assistance with Medicare prescription drug coverage. It is available only to those individuals who qualify based on their income and assets.
Maintaining LIS status
There are four different groups of individuals that have LIS and may require assistance to understand and maintain their status. Each year, CMS sends notices out explaining potential changes to each group on specific colors of paper that corresponds to the group they are in.
Medicare LIS Beneficiaries PDP Reassignment and types of notices
The first group
These are individuals who do not automatically qualify for LIS. In September CMS mails a notice on grey paper to anyone who will no longer automatically receive LIS benefits. Those who receive the grey notice may be eligible for LIS. but they must send in a new application.
Learn more about the Grey notice
The grey notice is an application that explains why their LIS benefit renewal is no longer automatic and requests they send the application in. A postage-paid pre addressed envelope is included with the grey application form.
The second group
Each October, CMS sends out an orange notice to individuals who’s LIS co-payment is changing. These people still qualify for extra help, but the amount will be different than it is currently.
The third group
Individuals in this group receive a blue notice in early November. The blue notice explains that the LIS beneficiaries will be assigned a new Part D plan starting January 1st.
People who are automatically reassigned qualify for a full (100%) subsidy and are currently enrolled in a PDP plan that is raising it’s premium over the approved low premium amount. These individuals were enrolled in their current PDP coverage by CMS. CMS also auto reassigns those who qualify for LIS and are enrolled in a PDP that is leaving the Medicare program.
The fourth group
People who chose their own PDP coverage plan (choosers) receive a notice on tan paper in early November. This notice is sent to those who receive a full (100%) premium subsidy and will have an increase in premium amount. These people will not be reassigned a new PDP plan because they chose their own plan. Therefore individuals can stay in their current plan and pay a higher rate or choose another plan for themselves. The notice includes plan options that provide plans that offer a $0 premium for the beneficiary.
Choosers
What are choosers; they are LIS eligible individuals who receive a 100% premium subsidy and pick their own prescription drug plan. When this is the case, CMS does not enroll these people into a new plan. Although if their chosen plan either terminates or reduces its service area, CMS will enroll them in a plan to avoid a loss of Part D coverage.
View an example of the tan choosers notice
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