Section text and notes
Monthly beneficiary premium
Computation
In general
The monthly beneficiary premium for a prescription drug plan is the base beneficiary premium computed under paragraph (2) or (8) (as applicable) as adjusted under this paragraph.
Adjustment to reflect difference between bid and national average bid
Above average bid
If for a month the amount of the standardized bid amount (as defined in paragraph (5)) exceeds the amount of the adjusted national average monthly bid amount (as defined in clause (iii)), the base beneficiary premium for the month shall be increased by the amount of such excess.
Below average bid
If for a month the amount of the adjusted national average monthly bid amount for the month exceeds the standardized bid amount, the base beneficiary premium for the month shall be decreased by the amount of such excess.
Adjusted national average monthly bid amount defined
section 1395w–115(c)(2) of this titleFor purposes of this subparagraph, the term “adjusted national average monthly bid amount” means the national average monthly bid amount computed under paragraph (4), as adjusted under .
Increase for supplemental prescription drug benefits
The base beneficiary premium shall be increased by the portion of the PDP approved bid that is attributable to supplemental prescription drug benefits.
Increase for late enrollment penalty
The base beneficiary premium shall be increased by the amount of any late enrollment penalty under subsection (b).
Decrease for low-income assistance
section 1395w–114 of this titleThe monthly beneficiary premium is subject to decrease in the case of a subsidy eligible individual under .
Increase based on income
The monthly beneficiary premium shall be increased pursuant to paragraph (7).
Uniform premium
Except as provided in subparagraphs (D), (E), and (F), the monthly beneficiary premium for a prescription drug plan in a PDP region is the same for all part D eligible individuals enrolled in the plan.
Base beneficiary premium
Beneficiary premium percentage
Computation of national average monthly bid amount
In general
section 1395w–21(a)(2)(A)(i) of this titlesection 1395eee of this titlesection 1395w–131(f) of this titlesection 1395mm(h) of this titlesection 1395w–131(e) of this titleFor each year (beginning with 2006) the Secretary shall compute a national average monthly bid amount equal to the average of the standardized bid amounts (as defined in paragraph (5)) for each prescription drug plan and for each MA–PD plan described in . Such average does not take into account the bids submitted for MSA plans, MA private fee-for-service plan, and specialized MA plans for special needs individuals, PACE programs under (pursuant to ), and under reasonable cost reimbursement contracts under (pursuant to ).
Weighted average
In general
section 1395w–27a(f)(4) of this titleThe monthly national average monthly bid amount computed under subparagraph (A) for a year shall be a weighted average, with the weight for each plan being equal to the average number of part D eligible individuals enrolled in such plan in the reference month (as defined in ).
Special rule for 2006
For purposes of applying this paragraph for 2006, the Secretary shall establish procedures for determining the weighted average under clause (i) for 2005.
Standardized bid amount defined
Prescription drug plans
Basic coverage
In the case of a prescription drug plan that provides basic prescription drug coverage, the PDP approved bid (as defined in paragraph (6)).
Supplemental coverage
In the case of a prescription drug plan that provides supplemental prescription drug coverage, the portion of the PDP approved bid that is attributable to basic prescription drug coverage.
MA–PD plans
In the case of an MA–PD plan, the portion of the accepted bid amount that is attributable to basic prescription drug coverage.
PDP approved bid defined
For purposes of this part, the term “PDP approved bid” means, with respect to a prescription drug plan, the bid amount approved for the plan under this part.
Increase in base beneficiary premium based on income
In general
section 1395r(i) of this titleIn the case of an individual whose modified adjusted gross income exceeds the threshold amount applicable under paragraph (2) of (including application of paragraph (5) of such section) for the calendar year, the monthly amount of the beneficiary premium applicable under this section for a month after December 2010 shall be increased by the monthly adjustment amount specified in subparagraph (B).
Monthly adjustment amount
Modified adjusted gross income
section 1395r(i)(4) of this titleFor purposes of this paragraph, the term “modified adjusted gross income” has the meaning given such term in subparagraph (A) of , determined for the taxable year applicable under subparagraphs (B) and (C) of such section.
Determination by Commissioner of Social Security
The Commissioner of Social Security shall make any determination necessary to carry out the income-related increase in the base beneficiary premium under this paragraph.
Procedures to assure correct income-related increase in base beneficiary premium
Disclosure of base beneficiary premium
Not later than September 15 of each year beginning with 2010, the Secretary shall disclose to the Commissioner of Social Security the amount of the base beneficiary premium (as computed under paragraph (2) or (8) (as applicable)) for the purpose of carrying out the income-related increase in the base beneficiary premium under this paragraph with respect to the following year.
Additional disclosure
Rule of construction
The formula used to determine the monthly adjustment amount specified under subparagraph (B) shall only be used for the purpose of determining such monthly adjustment amount under such subparagraph.
Premium stabilization
In general
2024
2025
2026
2027
2028
2029
Clarification regarding 2030 and subsequent years
The base beneficiary premium for a month in 2030 or a subsequent year shall be computed under paragraph (2) without regard to this paragraph.
Percent specified
In general
Floor
The percent specified under subparagraph (A) may not be less than 20 percent.
Late enrollment penalty
In general
Subject to the succeeding provisions of this subsection, in the case of a part D eligible individual described in paragraph (2) with respect to a continuous period of eligibility, there shall be an increase in the monthly beneficiary premium established under subsection (a) in an amount determined under paragraph (3).
Individuals subject to penalty
section 1395w–101(b)(2) of this titleA part D eligible individual described in this paragraph is, with respect to a continuous period of eligibility, an individual for whom there is a continuous period of 63 days or longer (all of which in such continuous period of eligibility) beginning on the day after the last date of the individual’s initial enrollment period under and ending on the date of enrollment under a prescription drug plan or MA–PD plan during all of which the individual was not covered under any creditable prescription drug coverage.
Amount of penalty
In general
Uncovered month defined
section 1395w–101(b)(2) of this titleFor purposes of this subsection, the term “uncovered month” means, with respect to a part D eligible individual, any month beginning after the end of the initial enrollment period under unless the individual can demonstrate that the individual had creditable prescription drug coverage (as defined in paragraph (4)) for any portion of such month.
Creditable prescription drug coverage defined
Coverage under prescription drug plan or MA–PD plan
Coverage under a prescription drug plan or under an MA–PD plan.
Medicaid
section 1315 of this titleCoverage under a medicaid plan under subchapter XIX or under a waiver under .
Group health plan
section 1395w–132(a)(2) of this titleCoverage under a group health plan, including a health benefits plan under chapter 89 of title 5 (commonly known as the Federal employees health benefits program), and a qualified retiree prescription drug plan (as defined in ).
State pharmaceutical assistance program
section 1395w–133(b)(1) of this titleCoverage under a State pharmaceutical assistance program described in .
Veterans’ coverage of prescription drugs
Coverage for veterans, and survivors and dependents of veterans, under chapter 17 of title 38.
Prescription drug coverage under medigap policies
section 1395ss of this titlesection 1395ss(p)(1) of this titleCoverage under a medicare supplemental policy under that provides benefits for prescription drugs (whether or not such coverage conforms to the standards for packages of benefits under ).
Military coverage (including TRICARE)
Coverage under chapter 55 of title 10.
Other coverage
Such other coverage as the Secretary determines appropriate.
Actuarial equivalence requirement
section 1395w–111(c) of this titleCoverage meets the requirement of this paragraph only if the coverage is determined (in a manner specified by the Secretary) to provide coverage of the cost of prescription drugs the actuarial value of which (as defined by the Secretary) to the individual equals or exceeds the actuarial value of standard prescription drug coverage (as determined under ).
Procedures to document creditable prescription drug coverage
In general
The Secretary shall establish procedures (including the form, manner, and time) for the documentation of creditable prescription drug coverage, including procedures to assist in determining whether coverage meets the requirement of paragraph (5).
Disclosure by entities offering creditable prescription drug coverage
In general
Each entity that offers prescription drug coverage of the type described in subparagraphs (B) through (H) of paragraph (4) shall provide for disclosure, in a form, manner, and time consistent with standards established by the Secretary, to the Secretary and part D eligible individuals of whether the coverage meets the requirement of paragraph (5) or whether such coverage is changed so it no longer meets such requirement.
Disclosure of non-creditable coverage
In the case of such coverage that does not meet such requirement, the disclosure to part D eligible individuals under this subparagraph shall include information regarding the fact that because such coverage does not meet such requirement there are limitations on the periods in a year in which the individuals may enroll under a prescription drug plan or an MA–PD plan and that any such enrollment is subject to a late enrollment penalty under this subsection.
Waiver of requirement
In the case of a part D eligible individual who was enrolled in prescription drug coverage of the type described in subparagraphs (B) through (H) of paragraph (4) which is not creditable prescription drug coverage because it does not meet the requirement of paragraph (5), the individual may apply to the Secretary to have such coverage treated as creditable prescription drug coverage if the individual establishes that the individual was not adequately informed that such coverage did not meet such requirement.
Continuous period of eligibility
In general
Subject to subparagraph (B), for purposes of this subsection, the term “continuous period of eligibility” means, with respect to a part D eligible individual, the period that begins with the first day on which the individual is eligible to enroll in a prescription drug plan under this part and ends with the individual’s death.
Separate period
Waiver of penalty for subsidy-eligible individuals
section 1395w–114(a)(3) of this titleIn no case shall a part D eligible individual who is determined to be a subsidy eligible individual (as defined in ) be subject to an increase in the monthly beneficiary premium established under subsection (a).
Collection of monthly beneficiary premiums
In general
section 1395w–24(d) of this titleSubject to paragraphs (2), (3), and (4), the provisions of shall apply to PDP sponsors and premiums (and any late enrollment penalty) under this part in the same manner as they apply to MA organizations and beneficiary premiums under part C, except that any reference to a Trust Fund is deemed for this purpose a reference to the Medicare Prescription Drug Account.
Crediting of late enrollment penalty
Portion attributable to increased actuarial costs
section 1395w–115(c)(1) of this titlesection 1395w–115(b) of this titleWith respect to late enrollment penalties imposed under subsection (b), the Secretary shall specify the portion of such a penalty that the Secretary estimates is attributable to increased actuarial costs assumed by the PDP sponsor or MA organization (and not taken into account through risk adjustment provided under or through reinsurance payments under ) as a result of such late enrollment.
Collection through withholding
section 1395w–24(d)(2)(A) of this titleIn the case of a late enrollment penalty that is collected from a part D eligible individual in the manner described in , the Secretary shall provide that only the portion of such penalty estimated under subparagraph (A) shall be paid to the PDP sponsor or MA organization offering the part D plan in which the individual is enrolled.
Collection by plan
section 1395w–24(d)(2)(A) of this titleIn the case of a late enrollment penalty that is collected from a part D eligible individual in a manner other than the manner described in , the Secretary shall establish procedures for reducing payments otherwise made to the PDP sponsor or MA organization by an amount equal to the amount of such penalty less the portion of such penalty estimated under subparagraph (A).
Fallback plans
section 1395w–24(d)(2)(A) of this titlesection 1395s of this titlesection 1395r of this titleIn applying this subsection in the case of a fallback prescription drug plan, paragraph (2) shall not apply and the monthly beneficiary premium shall be collected in the manner specified in (or such other manner as may be provided under in the case of monthly premiums under ).
Collection of monthly adjustment amount
In general
section 1395w–24(d)(2) of this titlesection 1395s of this titleNotwithstanding any provision of this subsection or , subject to subparagraph (B), the amount of the income-related increase in the base beneficiary premium for an individual for a month (as determined under subsection (a)(7)) shall be paid through withholding from benefit payments in the manner provided under .
Agreements
In the case where the monthly benefit payments of an individual that are withheld under subparagraph (A) are insufficient to pay the amount described in such subparagraph, the Commissioner of Social Security shall enter into agreements with the Secretary, the Director of the Office of Personnel Management, and the Railroad Retirement Board as necessary in order to allow other agencies to collect the amount described in subparagraph (A) that was not withheld under such subparagraph.
Aug. 14, 1935, ch. 531 Pub. L. 108–173, title I, § 101(a)(2)117 Stat. 2102 Pub. L. 110–275, title I, § 114(a)(1)122 Stat. 2506 Pub. L. 111–148, title III, § 3308(a)124 Stat. 472 Pub. L. 117–169, title I, § 11201(d)(1)136 Stat. 1888 (, title XVIII, § 1860D–13, as added , , ; amended , , ; , (b)(1), , , 474; , (2), (3)(C), , , 1890.)
Editorial Notes
Amendments
Pub. L. 117–169, § 11201(d)(1)(A)(i)2022—Subsec. (a)(1)(A). , inserted “or (8) (as applicable)” after “paragraph (2)”.
Pub. L. 117–169, § 11201(d)(1)(A)(ii)Subsec. (a)(2). , substituted “Subject to paragraph (8), the base” for “The base” in introductory provisions.
Pub. L. 117–169, § 11201(d)(2)(A)Subsec. (a)(3)(A). , inserted “(or, for 2030 and each subsequent year, the percent specified under paragraph (9))” after “25.5 percent”.
Pub. L. 117–169, § 11201(d)(3)(C)Subsec. (a)(7)(B)(i). , inserted “(or, for 2030 and each subsequent year, the percent specified under paragraph (9))” after “25.5 percent” in subcls. (I) and (II).
Pub. L. 117–169, § 11201(d)(1)(A)(iii)(I)Subsec. (a)(7)(B)(ii). , inserted “or (8) (as applicable)” after “paragraph (2)”.
Pub. L. 117–169, § 11201(d)(1)(A)(iii)(II)Subsec. (a)(7)(E)(i). , inserted “or (8) (as applicable)” after “paragraph (2)”.
Pub. L. 117–169, § 11201(d)(1)(A)(iv)Subsec. (a)(8). , added par. (8).
Pub. L. 117–169, § 11201(d)(2)(B)Subsec. (a)(9). , added par. (9).
Pub. L. 117–169, § 11201(d)(1)(B)Subsec. (b)(3)(A)(ii). , substituted “paragraph (2) or (8) of subsection (a) (as applicable)” for “subsection (a)(2)”.
Pub. L. 111–148, § 3308(b)(1)2010—Subsec. (a)(1)(F), (G). , added subpar. (F), redesignated former subpar. (F) as (G), and substituted “(D), (E), and (F)” for “(D) and (E)” in subpar. (G).
Pub. L. 111–148, § 3308(a)(1)Subsec. (a)(7). , added par. (7).
Pub. L. 111–148, § 3308(a)(2)(A)Subsec. (c)(1). , substituted “(2), (3), and (4)” for “(2) and (3)”.
Pub. L. 111–148, § 3308(a)(2)(B)Subsec. (c)(4). , added par. (4).
Pub. L. 110–2752008—Subsec. (b)(8). added par. (8).
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
Pub. L. 110–275, title I, § 114(b)122 Stat. 2507