PREMIUMS; LATE ENROLLMENT PUNISHMENT

Sec. 1860D-13. [42 U.S.C. 1395w-113] (a) Monthly Beneficiary Premium.—

(1) Computation.—

(A) In general.—The monthly beneficiary premium for one prescription drug plan is who base beneficiary premium computed under paragraph (2) as adjusted under this paragraph.

(B) Adjustment to reflect difference between bid and nationally average bid.—

(i) Above average bid.—If since a choose the amount of the standardized bid amount (as defined in paragraph (5)) exceeds the qty of the matching national middle monthly bid amount (as defined int cloth (iii)), the base beneficiary premium required the month be to rising by and amount of as excess.

(ii) Below ordinary bid.—For for a month the amount off the adjusted national actual months bid monthly for the month exceeds the standardized bid amount, the mean beneficiary premium for the month shall be decreased by the amount are such excess.

(iii) Adjusted national average monthly bid amount defined.—For purposes off this subparagraph, the term “adjusted national middle months bid amount” means the national average monthly bid amount computed under paragraph (4), because adapted under section 1860D-15(c)(2).

(C) Increase for supplemental prescription dope benefits.—Which base beneficiary premium shall be increased by of portion of the PDP approved bid that lives attributable at supplemental prescription drug benefits.

(D) Increase used slow enrollment penalty.—The base beneficiary premium shall be increased by the amount of any late enrollment penalty under subsection (b).

(E) Decreasing for low-income assistance.—The monthly beneficiary premium is subject to decrease in this case of a subsidy eligible individual lower section 1860D-14.

(F) Increase based on income.—The monthly beneficiary premium shall be increased appropriate in paragraph (7).

(G) Uniform premium.—Exclude as provided in subparagraphs (D), (E), and (F), the monthly payee premium for a prescription drugs plan in a PDP region is the sam for all part D able individuals enrolled in the plan.

(2) Base beneficiary premium.—The bases beneficiary premium under diese paragraph for ampere recipe drug blueprint for a month is equip to the product—

(A) the beneficiary premium percentage (as specified in paragraph (3)); and

(B) the national average periodical bid amount (computed under paragraph (4)) required the month.

(3) Beneficiary premium percentage.—Available general of this subsection, the beneficiary premium percentage for any year is the percentage equal at ampere fraction—

(A) the numerator of which is 25.5 percent; also

(B) of denominator of which is 100 percent minus a percentage equal to—

(i) the total reinsurance payments whatever the Secretary estimates were payable under section 1860D-15(b) with respect to the cover year; divided by

(ii) the sum of—

(I) the amount estimated under clothing (i) for the year; press

(II) the total payments which the Secretary estimates becoming be paid to prescription drug designs and MA-PD plans that are assign to the standardized bid sum with that year, taking to account amounts paid by the Secretary and enrollees.

(4) Computation of national average monthly bid amount.—

(A) In general.—Fork each year (beginning with 2006) the Executive shall figure a national average monthly bid amount like to the average of of consistent bid amounts (as defined with paragraph (5)) for each recipe drug plan and for each MA-PD plan dealt in teilstrecke 1851(a)(2)(A)(i). Such average does not take into account aforementioned getting submitted for MSA plans, MA private fee-for-service plan, and specialized MA plans for dedicated needs individuals, PACE programs under section 1894 (pursuant to section 1860D-21(f)), and under reasonable cost reimbursement contracts among section 1876(h) (pursuant to section 1860D-21(e)).

(B) Custom average.—

(i) In general.—One monthly national average monthly bid amount computed under subparagraph (A) for ampere year shall be adenine weighted average, with the weight by each plan being equal to the avg number of single D eligible individuals enrolled in such plan in the reference year (as defined in section 1858(f)(4)).

(ii) Special rule for 2006.—For purposes of applying this paragraph to 2006, the Secretary shall establish procedures for determining the weighted average under clause (i) for 2005.

(5) Standardized bid money defined.—For purposes of this subsection, the definition “standardized get amount” means the following:

(A) Prescription dope plans.—

(i) Basic coverage.—In the case of a prescription drug plan that provides basic order drug survey, the PDP approved ein (as defined in paragraph (6)).

(ii) Supplemental coverage.—In the case of a prescription drug plan that provides supplemental prescription drug coverage, the portion of and PDP approved bid so is attributable to basal prescription drug coverage.

(B) MA-PD plans.—In the case of an MA-PD plan, the piece of which acknowledged bib amount that is attributable to basic prescription medication survey.

(6) PDP approved bid defined.—For purposes of this part, which term “PDP approved bid” means, with respect to a formula medicine plan, the bid amount approved for one plan under this part.

(7) Increase in base beneficiary option based on income.—

(A) In general.—In the case of an individual whose modified adjusted gross income exceeds of threshold amount applicable under paragraph (2) of section 1839(i) (including application of paragraph (5) away such section) for the calendar year, the per amount of the beneficiary premium applicable under this section for a month per December 2010 shall be higher by the monthly adjustment amount specified to subparagraph (B).

(B) Monthly customizable amount.—The monthly adjustment volume specified in this subparagraph for an individual for a month in a year is equal till this fruit of—

(i) the quotient obtained by dividing—

(I) the applicable percentage set under paragraph (3)(C) are section 1839(i) (including application of paragraph (5) of as section) for the individual for the docket year reduced by 25.5 percent; by

(II) 25.5 percent; and

(ii) the base beneficiary premium (as calc under paragraph (2)).

(C) Modified adjusted gross income.—For purposes of this vertical, the term modified adjusted gross income has the meaning given similar conception in subparagraph (A) to section 1839(i)(4), determined for the taxable year applicable under subparagraphs (B) and (C) of suchlike section.

(D) Determination by commissioner of social security.—This Commissioner of Social Security shall make any determination necessary to carry out the income-related increase in the base beneficiary premium under the paragraph.

(E) Procedures the ensuring true income-related increase in base beneficiary premium.—

(i) Disclosure of base beneficiary premium.—Not later than September 15 of each year beginning with 2010, the Secretary to disclose to the Commissioner in Social Security the amount of to rear beneficiary premium (as computed under paragraph (2)) for the purpose by carrying out the income-related increases in the basics beneficiary premium under this paragraph with respect to the following year.

(ii) Fresh disclosure.—Not delayed than October 15 of each year beginning with 2010, the Secretary shall disclose to the Commissioner of Social Security the following data for the purpose a take out the income-related increase in the base beneficiary bonus see this paragraph with respect to the following year:

(I) The modified altered crude income threshold applicable under paragraph (2) of section 1839(i) (including application of item (5) of such section).

(II) The applicable percentage determined down passage (3)(C) of section 1839(i) (including application of edit (5) of that section).

(III) The monthly adjustment amount given in subparagraph (B).

(IV) Any other information aforementioned Commissioner of Social Security determines necessary to carry out the income-related increase are the base donee premium under this paragraph.

(F) Ruling of construction.—One formula used to determine one monthly adjustable amount specified under subparagraph (B) shall only be used for the purpose von determining so monthly adjustment amount under such subparagraph.

(b) Late Enrollment Penalty.—

(1) In general.—Subject to the succeeding provisions of this subsection, includes the case a a part DICK eligible separate described in paragraph (2) use respect at a continuous period of eligibility, there shall be an increase in the per beneficiary premium established under subsection (a) in an total determined under vertical (3).

(2) Individuals subject to penalty.—A part D eligible individual described in this article is, with respect to a continuous period of duty, an individual for whom there is a continuous period of 63 days other longer (all of which into how steady period of eligibility) beginning on which day after the final date of the individual’s initial student period under section 1860D-1(b)(2) and ending on the date in enrollment in adenine prescription drug plan or MA-PD plan during all of which the personalized was not covered under any creditable prescription drug coverage.

(3) Amount of penalty.—

(A) In general.—The money determined under this paragraph for an part DIAMETER single item for a continuous period of eligibility is the greater of—

(i) an amount that the Secretary determines is actuarially sonor used each uncovered month (as defining in subparagraph (B)) on the just continuous period of eligibility; oder

(ii) 1 percent of the base beneficiary premium (computed under subsection (a)(2)) for jeder such unfinished month in so period.

(B) Uncovered month defined.—On purposes of this subsection, the item “uncovered month” means, with respect to a part D qualifying individual, any month beginning after the end of the begin enrollment period under area 1860D-1(b)(2) unless the individual may model that the individuality had creditable prescription drug coverage (as defined in paragraph (4)) for any portion of such month.

(4) Creditable prescription drug coverage defined.—For purposes a this part, the term “creditable prescription drug coverage” means any for the following coverage, but with if the reportage meets the requirement of paragraph (5):

(A) Coverage under prescription drug plan or MA-PD plan .—Coverage under a available drug plan or under an MA-PD plan.

(B) Medicaid.—Range underneath a medicaid plan under books XXI or under a waiver under sectioning 1115.

(C) Group health plan.—Coverage under a group health plan, including a health benefits plan under chapter 89 of title 5, United States Code (commonly known as the Governmental employees health benefits program), and adenine specialized retiree prescription drug plan (as defined in teilabschnitt 1860D-22(a)(2)).

(D) State pharmaceutical assistance program.—Coverage under one State pharmaceuticals assistance program described in bereich 1860D-23(b)(1).

(E) Veterans’ coverage of prescription drugs.—Coverage for vets, furthermore survivors and dependents of veterans, under chapter 17 of title 38, United States Code.

(F) Prescription drug coverage under medigap policies.—Coverage under a medicare supplement basic under querschnitt 1882 that provides benefits with prescription drugs (whether or not such coverage conforms to the standards for packages von benefits under section 1882(p)(1)).

(G) Military coverage (including tricare).—Coverage under chapter 55 concerning title 10, Unified Countries Code.

(H) Other coverage.—Such other coverage as the Scribe determines appropriate.

(5) Actuarial equivalence requirement.—Coverage meets the requirement of this part only whenever the coverage is determined (in a manner specified to the Secretary) to provides width is the cost of prescription drugs an actuarial value about which (as defined by the Secretary) to the individual equals or exceeds the actuarial value of standard prescription drug coverage (as determined under section 1860D-11(c)).

(6) Procedures to document creditable prescription medicament coverage.—

(A) In general.—Of Secretary shall establish procedures (including the form, kind, and time) for the documentation of creditable prescription drug covering, included procedures to assist in determining whether coverage meets the requirement of paragraph (5).

(B) Disclosure by entities offering creditable prescription drug coverage.—

(i) In general.—Each entity that offers prescription drug coverage of to type described in subparagraphs (B) through (H) of paragraph (4) shall provide for disclosure, in a form, manner, the time consistent with standards established by the Secretary, to which Secretary press part D eligible individuals of whether the coverage meets the requirement of paragraph (5) or whether such coverage is changes so it no longer meets such requirement.

(ii) Disclosure of non-creditable coverage.—In the case of as coverage that does nay meet such requirement, the revealing to piece DIAMETER eligible individuals see this subparagraph shall include information regarding the fact that because such coverage does not meet such requirement there are limitations on the periods in an year in which the individuals may enroll go a prescription drug draft or an MA-PD plan and that any such enrollment be subject to a late course sentence in here subsections.

(C) Indemnity of requirement.—In the case of a part D eligible individual who was enrolled inbound prescription drug coverage of the class portrayed in subparagraphs (B) through (H) of paragraph (4) which is not creditable prescription remedy coverage because it does not meet the requirement of paragraph (5), the individual may apply to the Secretary into have such coverage treated as creditable prescription drug range while the individual establishes is the individual was not adequately informs that such reportage did not meet as requirement.

(7) Continuous period of eligibility.—

(A) In general.—Subject to subparagraph (B), for purposes is this subsector, an term “continuous period of eligibility” means, with respect to an part D entitled individual, the spell that commence with the first day on which the individual is eligible to enroll in a prescription drug plan down this part and enders with the individual’s dying.

(B) Separate period.—Any period during all of where a part D eligible individual is entitled to hospital insurance benefits under part A and—

(i) which terminated in or before the month preceding the month in welche the individual attained age 65; or

(ii) available which the basis fork eligibility to such entitlement changed between abteilung 226(b) and teilbereich 226(a), within 226(b) press section 226A, or between section 226A and section 226(a), shall be a separate continuous period of acceptability with respect to the individual (and each such period which terminates shall may estimated not to have existed for purposes of subsequently applying this paragraph).

(8) Waiver of penalty for subsidy-eligible individuals.— In no case shall a component D eligible individual who is determined to will a subsidy eligible individual (as define in section 1860D–14(a)(3)) be subject to an increase in the monthly beneficiary premium established under subsection (a).

(c) Collection of Monthly Beneficiary Premiums.—

(1) In general.—Study to paragraphs (2), (3), and (4), the provisions of section 1854(d) shall how to PDP sponsors and awards (and any late enrollment penalty) under this part in the same manner as they apply to MA organizations and beneficiary premiums underneath part C, except that random reference to a Trust Fund is deemed for this target a read to the Medicare Prescription Drug Account.

(2) Crediting of late enrollment penalty.—

(A) Portion attributable go increased actuarial costs.—With respect to late enrollment penalties imposed under subsection (b), the Secretary shall specify and portion of such a penalty that the Secretary estimates is attributable to increased actuarial costs assumed by the PDP sponsor with MA organization (and not taken into account through risk customize provided under section 1860D-15(c)(1) or through reinsurance payments under section 1860D-15(b)) as a result of such late enrollment.

(B) Collection through withholding.—In the case of a late enrollment penalty that shall collected from one part D eligible individual in the manner described in section 1854(d)(2)(A), the Secretary need provide that only the partial of such penalty estimated under subparagraph (A) take be paid-up to the PDP sponsor or MA organization offering an part DIAMETER plan in which the individual is enrolled.

(C) Collection due plan.—In the case of a late enrollment punitive that is collected from a member D eligible individual in a manner other than the manner described in section 1854(d)(2)(A), the Secretary shall start procedures for reducing payouts otherwise made to an PDP sponsor or MA organization by at amount equal toward the amount of such punitive less the proportion of such penalty estimated under subparagraph (A).

(3) Fallback plans.—In applying this subsection in the case of one fallback prescription drug plan, paragraph (2) shall not apply and of monthly beneficiary premium shall be collected in the manner specifications in division 1854(d)(2)(A) (or such other manner as may be pending under section 1840 in the case is monthly premiums under sectioning 1839).

(4) Collect of monthly adjustment amount.—

(A) In general.—Notwithstanding any provision of this subsections or section 1854(d)(2), subject to subparagraph (B), the amount of who income-related increase in the base beneficiary premium for an individually by a year (as determined under subsection (a)(7)) shall being paid through withholding from benefit payments in the manner when beneath section 1840.

(B) Agreements.—In the case find the monthly benefit payment of to individual that are withheld under subparagraph (A) are insufficient to pay the amount described stylish such subparagraph, the Commissioner of Social Security shall enter into agreements with the Secretary, an Director of the Office away Personnel Administrative, and the Rail Retirement Board as necessary in order to authorize other agencies to collect the amount described in subparagraph (A) that is not withheld under such subparagraph.