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Low-Income Subsidies Part I: Who’s Eligible?

—April 2, 2012

Part II: How to Apply
Part III:How to Market Yourself to LIS-eligible Prospects

Medicare beneficiaries who have limited income and resources may qualify for a Low-Income Subsidy (LIS), also known as “Extra Help,” to pay for prescription drugs costs. Many consumers who actually qualify for extra help don’t know that they do. An agent who can save them money will earn their business. This article series aims to help you understand how to identify LIS prospects, help them apply for benefits, and service their unique needs. Part I deals with Who is Eligible for LIS.

Low-Income Subsidy is a program for Medicare beneficiaries who have limited income and resources aimed at helping them pay their monthly Part D premium, yearly deductible, prescription coinsurance and copayments.

Who Qualifies for LIS?

Those who are eligible for LIS fall into two basic categories:

1. Those who have to apply for benefits

2. Those who qualify and receive benefits automatically due to their Dual-eligible status or their participation in the Supplemental Security Income or Medicare Savings Programs.

For the purposes of this article we are focused on the former group, which consists of Medicare beneficiaries with income below 150% of Federal Poverty Level (FPL). Because many of these people aren’t aware extra help is available, they’ve never applied or received the benefits they are due.

This is where you, as an agent, can be a great asset to you clients by knowing how to identify clients who may be eligible for LIS but aren’t aware of the program. Some agents are actually targeting this market with considerable success. While this market isn’t for everyone, it does represent sales potential for many agents.

Here’s what to look for when targeting LIS clients:

  • Income less than $16,755 for a single person or $22,695 for a married person
  • Resources (savings, investments, real estate) less than $13,070 for a single person or $26,120 for a married person

Assets counted include:

  • Cash (including checking and savings accounts)
  • Certificates of deposit
  • Retirement accounts (like IRAs or 401(k)s)
  • Stocks, bonds and mutual funds
  • Promissory notes
  • Property that can be converted to cash within 20 days
  • Mortgages
  • Life insurance cash value

How many LIS-eligible clients are there?

More than one-third (34%) of all Medicare beneficiaries reported income less than 150% of FPL. About 3.7 million seniors (9.7%) were below FPL in 2008. Another 2.4 million have incomes between FPL and 125% of FPL. CMS is actively engaged in several outreach campaigns to raise awareness, but as an agent you are in a unique position to help identify LIS clients and help them get the extra benefits they need. Asking a few probing questions is all it takes to get you clients the extra help they need.

Look for future articles explaining LIS benefits, key questions to ask and how to apply.

If you’re interested in targeting this market, you can rent lists from SMS based on age and income to find these LIS prospects. Contact a marketing coordinator for details. 1-877-645-0147.


James Schneider

When you list life Insurance as asset, are you referring to the cash value or death benifit?

April 4, 2012, 6:16 PM
Senior Market Sales, Inc.

James - In this case only the cash value would be considered an asset.

April 5, 2012, 12:44 PM
Ken Gardner

Thanks for a good article. You mention real estate in the beginning, but it isn't on the asset list. Is the primary residence counted?

April 18, 2012, 5:42 PM
Darwin WAlter

Do Annuities count?

May 15, 2012, 2:43 PM
Darwin Walter

Is SSI or SSDI added to the Asset list?

May 15, 2012, 2:45 PM

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