This is the official Medicare Low Income Subsidy (LIS) Action Plan. Hopefully someone further down this thread will simplify it and summarize it better than the gov did. :D
Low Income Subsidy (LIS) Action Plan - Special Enrollment Period of May 16-November 15, 2006
Basic Facts about the LIS/Extra Help
To date, more than 9 million people with Medicare who qualify for extra help are getting continuous prescription drug coverage from Medicare at low cost.
People who apply and are approved for the extra help can join a Medicare drug plan and pay no penalty between now and December 31, 2006.
This one-time enrollment opportunity allows people to enroll in a Medicare prescription drug plan right after they become eligible for the extra help.
There is no cost or obligation to apply for extra help, so anyone who thinks they may qualify should apply through Social Security or their State Medicaid office.
Beneficiaries can apply for the extra help/LIS at any time.
The earlier beneficiaries apply for the extra help, the sooner they can take advantage of a benefit worth around $3,700 a year that pays for 95 percent of drug costs on average.
People who qualify for the full low-income subsidy get extra help to pay their full premiums and deductibles in certain plans and have minimal cost sharing.
Full-benefit dual eligible low-income beneficiaries have no premium or deductible and nominal co-pays of as little as $1 or $3 per prescription.
Dual eligible beneficiaries who are institutionalized are totally exempt from cost sharing. They pay no premiums, no deductibles, no coinsurance, and no co-payments.
Medicare beneficiaries who are not full-benefit dual eligibles, but whose incomes are less than 135 percent of the federal poverty level and who have limited assets, will also pay only a few dollars per prescription, with no premium or deductible.
People who qualify for the partial low-income subsidy will get extra help and pay reduced premiums, deductibles, and cost sharing.
For beneficiaries with incomes less than 150 percent of the federal poverty level and assets up to $10,000 (or $20,000 if married) in 2006, the
Medicare beneficiary in certain plans will only pay a $50 deductible, cost sharing up to 15 percent coinsurance, and a sliding-scale premium based on income, covering 85 percent of their drug costs on average.
Medicare is enrolling people who qualify for extra help into Medicare \r\nPrescription Drug Plans to make sure they get help paying for their prescription drug costs, if they don’t enroll themselves or decline coverage. These people include people who get Supplemental Security Income (SSI) benefits, or belong to Medicare Savings Programs (MSP), or apply and qualify for extra help and currently get their benefits through the Original Medicare Plan.\r\n\r\nThis facilitated enrollment process will ensure that people who qualify for extra help have prescription drug coverage.