Certain groups of Medicare beneficiaries automatically qualify for the low-income subsidy and do not have to apply. These groups are deemed eligible for the subsidy from the first month of deemed status until the end of the calendar year. The following groups are deemed eligible:

• Full-benefit dual eligibles (FBDEs), that is, persons eligible for both Medicare and full Medicaid benefits.

• Supplemental Security Income (SSI) recipients, including SSI recipients who do not qualify for Medicaid, and individuals deemed to be SSI recipients.

• Medicare beneficiaries who are participants in the Medicare Saving Programs (MSP), which are QMB, SLMB, and QI.
Deemed eligibles do not need to file an application for the subsidy. CMS will automatically award them the subsidy based on information received from the States and SSA and notify them that they are eligible without having to file an application. They do,
however, need to choose a prescription drug plan.

Full-benefit dual eligibles who fail to choose a plan will be enrolled by CMS in a plan effective the month they attain dual
status. Also, QMBs, SLMBs, QIs, SSI recipients, and others who apply and are found eligible for the subsidy, will be enrolled in a plan by CMS if they do not choose a plan on their own.

http://cms.hhs.gov/Medicare/Eligibility-and-Enrollment/LowIncSubMedicarePresCov/Downloads/StateLISGuidance021009.pdf