Regulations for the Medicare Part D Subsidy:
A Brief Summary

The Medicare Modernization Act (MMA) established a voluntary Part D Prescription Drug Program effective January 1, 2006. While the overall responsibility for development and administration of this program resides with CMS, the statute also requires SSA to take applications and determine eligibility for the subsidy program. This subsidy reduces out of pocket costs paid by those Part D enrollees who have limited income (below 150% of the poverty line applicable to the size of the family involved) and resources (up to $11,710 in assets for an individual or $23,410 for a married couple in 2007) by providing reduced monthly premiums and other cost-sharing assistance.

CMS published final regulations on Part D subsidies at 70 FR 4193 on 1/28/05 . The final SSA regulations (), published on 12/30/05, supplement the CMS policy by specifying SSA’s role in the subsidy program.

To access the SSA regulations, you will need the Adobe Acrobat reader software. If you do not already have this software, see our page on downloading and printing Portable Document Format () documents.

The regulations, which add a new section 418, subpart D, to the existing CFR, describe SSA policy regarding administration of the subsidy program, including:

• How individuals can apply for extra help. Subsidy applications may be submitted through SSA or through the States. Certain low-income individuals, such as SSI and Medicaid recipients who also have Medicare, and individuals eligible for Medicare Savings Programs, are deemed eligible, meaning that they do not need to submit an application.
• How SSA determines eligibility for a subsidy. Individuals must be currently entitled to Medicare Part A and/or enrolled in Part B. They must also meet certain income and resource requirements, and enroll in a Prescription Drug Plan or Medicare Advantage plan with drug coverage.
• How income and resources are evaluated. SSA looks at the individual’s income, readily available resources, and real property in determining subsidy eligibility. Computer matches are used to verify income and resource information provided during the application process.
• How circumstantial changes affect eligibility. Changes in an individual’s situation, such as marriage or divorce, can affect eligibility for (and the amount of) available subsidy.
• How to appeal SSA’s decision on subsidy eligibility. SSA’s determinations relating to subsidy eligibility are subject to administrative review. Applicants who appeal the agency’s initial determination can request a telephone hearing or a case review. Determinations rendered by the administrative review process can also be appealed to the federal courts.
• How SSA periodically redetermines eligibility for a subsidy. If SSA makes the initial determination of subsidy eligibility, the agency also makes periodic reviews of income and resources to verify continued eligibility.