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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

Click here to view a complete guide to CMS consumer mailings 2024/2025

Medicare Prescription Drug Plans

We always get a lot of questions on Medicare Part D.  Here are some commons questions that we hear and additonal information on part D.  If you have other questions, please email Ed Crowe at Edward@Croweandassociates.com

1.  Popular Summer Medicare Part D Coverage Questions

2.  More on your Medicare Part D Coverage and the 2012 Donut Hole

3.  Average Retail Drug Prices

1.  Popular Summer Medicare Part D Coverage Questions

Question:  As we travel around this summer, will we still have Medicare Part D prescription coverage outside of our home state? Read more

We always get a lot of questions on Medicare Part D.  Here are some commons questions that we hear and additonal information on part D.  If you have other questions, please email Ed Crowe at Edward@Croweandassociates.com

1.  Popular Summer Medicare Part D Coverage Questions

2.  More on your Medicare Part D Coverage and the 2012 Donut Hole

3.  Average Retail Drug Prices

1.  Popular Summer Medicare Part D Coverage Questions

 Question:  As we travel around this summer, will we still have Medicare Part D prescription coverage outside of our home state?

Yes.  You can use your Medicare Part D prescription drug plan at any of your plan’s network pharmacies, and most Part D plans include more than 50,000 pharmacies in their network.  If you are in a remote area of the country and are having trouble finding a network pharmacy, you can always telephone your Medicare Part D plan’s Member Services department and ask them to help you find the nearest pharmacy (the toll-free number is on the back of your Member ID card). 

Question:  If I purchase prescription drugs while outside of the United States, and bring them back with me, will my Medicare Part D plan reimburse me for these drugs if they are on my Part D plan’s formulary?

 Probably Not.  Although you can always ask your plan for more information, the Medicare Part D program does not anticipate coverage for medications purchased outside of the United States. 

Question:  We just moved from North Carolina to Florida and our Medicare Part D plan was cancelled because of our relocation.  Can we enroll back into our same plan now (in July) or do we have to wait until November/December?

 You can enroll now into a new Medicare plan.  Most people are not allowed to change Medicare Part D prescription drug plans outside of the annual Open Enrollment Period (or Annual Election Period) that runs from October 15 through December 7 of each year.  However, a Special Enrollment Period is available for people who move to a new Medicare plan service area during the plan year and allows people to join a new Medicare prescription drug plan or Medicare Advantage outside of the annual Open Enrollment Period.   

 Question:  I will turn 65 in September and will be eligible for Medicare.  When is the best time to join a Medicare prescription plan?

 It depends on when you need your Medicare prescription plan coverage to begin.  Initially, you have a seven (7) month window of time to join a Medicare Part D or Medicare Advantage plan.  So if you enroll in a Medicare Part D plan within the three (3) months before the month that you become eligible for Medicare (for example, the 3 months before you turn 65), your Medicare plan coverage will start on the first day of your birthday month (or Medicare eligibility month).  If you join a Medicare plan during your birthday (or eligibility) month, your prescription drug coverage will start on the first day of the next month.  Finally, if you join a Medicare plan during the three (3) months after your birthday (or eligibility) month, your drug coverage will start the first day of the month following the month when you enroll.

 Did you have a question that needs answered?  No problem, you can email Ed Crowe at Edward@Croweandassociates.com for answers.

2.  More on your Medicare Part D Coverage and the 2012 Donut Hole

 Question:  How do I find out how much more money I need to spend before I exit this year’s Donut Hole?

 The easiest way may be to check your monthly Explanation of Benefits letter.  Your Medicare Part D plan regularly sends you an Explanation of Benefits (EOB) statement detailing your Medicare plan coverage.  You will notice that the letter is separated into sections and in Section 2, you will find information on your current stage of coverage.  You will also see a box in Section 2 of your EOB letter that is entitled, “What happens next?”  In this box, your Medicare plan shows the details of how much more you will need to spend before moving into the next stage of your plan’s coverage. 

 So if you are in the Initial Coverage stage, the “What happens next” area will tell you exactly how far away you are from your Coverage Gap (or Donut Hole).  If you are in the Donut Hole, you will see how much more money you will need to spend before entering the Catastrophic Coverage portion of your Medicare Part D plan.   

Question:  I have already reached my Medicare drug plan’s initial coverage limit of $2,930 and entered the 2012 Donut Hole, so do I now pay the difference between the $4,700 out-of-pocket limit and my plan’s $2,930 initial coverage limit before exiting the Donut Hole?

 Not exactly.  You will stay in the 2012 Donut Hole until your total out-of-pocket costs exceeds the $4,700 threshold – less any name-brand drug discounts you receive while in the Donut Hole.  As a note, there are two different numbers that are used to define your Medicare drug plan’s Donut Hole or Coverage Gap: (1) The total negotiated retail value of your medications:  When the total value of the retail cost of your drug purchases exceeds $2,930, you go into the 2012 Donut Hole. (2) Total Out-of-Pocket Spending:  After your actual spending for covered medications has reached $4,700, you exit the Donut Hole.  (Remember, the brand-name discount counts toward meeting this total out-of-pocket spending amount).

 For example, if you are in your Medicare Part D plan’s Initial Coverage Phase, purchase a medication with a $100 retail cost, and only pay a $30 co-payment out of your own pocket (the plan pays the other $70), you get $30 credit toward the $4,700 Donut Hole exit point and $100 toward your $2,930 Initial Coverage Limit.

Now when you are in the Donut Hole and you buy the same $100 medication, and your plan does not have any Donut Hole coverage, you are responsible for the full $100 drug cost.  However, this year, you will get a 50% discount on all brand-name drugs bought in the Donut Hole, or a 14% discount on generic drugs purchased in the Donut Hole.

 If your $100 medication was a name-brand, then you will pay only $50 – but, you will get the full credit for the $100 purchase toward meeting your $4,700 out-of-pocket threshold or Donut Hole exit point.

 On the other hand, if the $100 medication was a generic drug, you would pay $86 dollars and get credit only for the actual $86 you spent toward meeting the $4,700 Donut Hole exit point or out-of-pocket threshold.

Question:  Will the Medicare Part D plan’s Coverage Gap or Donut Hole really ever go away?

 Yes, but only to the extent that you will still pay 25% in the Donut Hole.  As many people know, the Medicare Part D Donut Hole is scheduled to “close” in 2020.  But medications will not be free when the Donut Hole is finally “closed”.  In 2020, the co-insurance or cost-sharing for both generic and brand-name drugs purchased in the Donut Hole will be no more 25% of the plan’s negotiated retail price.  So, if your 2020 Medicare Part D plan follows the CMS standard Medicare Part D parameters with 25% co-insurance paid during the Initial Coverage Phase, you will pay no more in the Donut Hole than you would pay during normal coverage and the Donut Hole will be effectively eliminated.

 On the other hand, if your 2020 Medicare Part D plan has a $0 (or low) co-payment for your medications during the Initial Coverage phase, and then you find that you are paying 25% of your medication retail prices in the Donut Hole, it may not seem as though the Donut Hole is “closed,” although it technically is.  

3.  Average Retail Drug Prices

 Question:  What does the “negotiated” retail drug price mean and why is it important?

 The negotiated retail drug price is the amount that you would pay for your medication at a particular pharmacy when you have a Medicare Part D prescription drug plan.  The negotiated retail price for a certain medication may be different from the pharmacy’s regular price, and it can be different from pharmacy to pharmacy and from Medicare Part D plan to plan.

For example, if you purchase a formulary medication like Lipitor®, you may see on your receipt a negotiated retail price slightly more or slightly less than someone who is enrolled in another Medicare plan.  And, if you were to go to a different pharmacy using your same Medicare plan, the negotiated retail price could also be slightly different.

 The negotiated retail price is important to you because your total annual negotiated retail drug costs are used to determine the point when you enter into your plan’s Donut Hole phase.  So based on the differences in negotiated retail price between plans, you may meet someone using the same medications, but entering the Donut Hole a short-time before or after you.  Also, if you are in the Donut Hole, you will receive a discount on the negotiated retail price of your formulary medications.  So, based on the negotiated retail prices, people in different Medicare plans will pay different discounted prices in the Donut Hole.

Walmart will be offering Medicare Part D Prescription drug plans for 2011. While there has not been much detail provided about the plan design, it is suggested that the plan will have a $0 copay for generic drugs and very low cost monthly premiums

Walmart will utilize small kiosks in the store staffed by representatives licensed to sell the Medicare Part D Rx plans. There are not yet many details on the plan formulary but it will be offered through Humana. Members will only be able to use the new drug card at Walmart pharmacies. The plan will be available on November 15th which is the start of the Medicare Annual Election Period which is when Medicare Eligible members may sign up for a Part D Rx plan.