This article explains what the Low-Income Subsidy (LIS), also known as Extra Help, covers under Medicare and what it does not cover. Understanding the scope of LIS is essential for agents explaining prescription drug costs and medical cost-sharing to Medicare clients.
Key Terms
LIS (Low-Income Subsidy) / Extra Help: A federal program administered by CMS that helps eligible Medicare members reduce prescription drug costs under Medicare Part D. LIS applies only to Part D prescription drug costs. LIS does not apply to Medicare medical costs.
Medicare Part D: The prescription drug coverage portion of Medicare. LIS assistance is limited to Part D costs, including premiums, deductibles, copayments, and coinsurance for covered prescription drugs.
Part D deductible: The amount a Medicare Part D member pays out of pocket for covered prescription drugs before the plan begins paying. LIS can reduce or eliminate the Part D deductible for eligible members.
Medicare Part A deductible: The amount a Medicare beneficiary pays for inpatient hospital costs before Medicare Part A coverage begins. LIS does not apply to the Part A deductible.
Medicare Part B deductible: The annual amount a Medicare beneficiary pays for outpatient medical services before Medicare Part B coverage begins. LIS does not apply to the Part B deductible.
MOOP (Maximum Out-of-Pocket): The annual limit on what a Medicare Advantage member pays out of pocket for Medicare Part A and Part B medical services. LIS does not contribute to or reduce the MOOP accumulation.
MAPD (Medicare Advantage Prescription Drug plan): A private insurance plan that combines Medicare Part A, Part B, and Part D coverage into a single plan. LIS applies only to the Part D prescription drug portion of an MAPD plan — not to the medical deductibles or cost-sharing under Part A or Part B.
What is LIS (Extra Help)?
The Low-Income Subsidy (LIS), also known as Extra Help, is a CMS program that helps eligible Medicare members reduce prescription drug costs under Medicare Part D. CMS states that LIS helps lower the cost of Medicare prescription drug coverage, including premiums, deductibles, and copayments for covered drugs.
LIS is a Part D benefit. It does not extend to Medicare medical coverage under Part A or Part B.
What does LIS cover?
For members who qualify for LIS, CMS provides assistance with Medicare Part D costs only. LIS assistance may include:
Reduction or elimination of the Part D deductible
Lower or $0 Part D monthly premium, depending on the member's subsidy level
Reduced drug copayments and coinsurance
Protection from high out-of-pocket prescription drug costs
Lower cost-sharing across Part D coverage phases
What does LIS not cover?
LIS applies only to Medicare Part D prescription drug costs. LIS does not apply to Medicare medical coverage and does not reduce or pay for any of the following:
Medicare Part A deductible (hospital inpatient costs)
Medicare Part B deductible (medical and outpatient services)
Medicare Advantage (MAPD) medical deductibles
MOOP (Maximum Out-of-Pocket) accumulation
Medical copayments or coinsurance under Part A or Part B
A member with LIS still owes the full medical cost-sharing required by their Medicare Advantage or Original Medicare plan. LIS does not reduce those costs in any way.
Why did LIS not reduce my client's medical deductible?
LIS only applies to Medicare Part D prescription drug costs. LIS does not affect Part A or Part B medical deductibles, Medicare Advantage medical deductibles, or any other medical cost-sharing under Part A or Part B. If a member has a medical deductible on their MAPD plan, LIS will not reduce that deductible regardless of the member's subsidy level.
Key takeaway
LIS provides prescription drug financial assistance under Part D only. LIS does not apply to Medicare medical deductibles, MOOP, or Part A and Part B cost-sharing. These are separate cost categories that LIS was not designed to cover.
Additional Resources
If you have any questions please contact Producer Support. Producer Support is available by phone at (866) 568-9649, by email at [email protected], or by chat directly from your MyMFG account.