View all text of Subpart 2 [§ 1395w-111 - § 1395w-116]
§ 1395w–113. Premiums; late enrollment penalty
(a) Monthly beneficiary premium
(1) Computation
(A) In general
(B) Adjustment to reflect difference between bid and national average bid
(i) Above average bid
(ii) Below average bid
(iii) Adjusted national average monthly bid amount defined
(C) Increase for supplemental prescription drug benefits
(D) Increase for late enrollment penalty
(E) Decrease for low-income assistance
(F) Increase based on income
(G) Uniform premium
(2) Base beneficiary premiumSubject to paragraph (8), the base beneficiary premium under this paragraph for a prescription drug plan for a month is equal to the product 1
1 So in original. The word “of” probably should appear after “product”.
—(A) the beneficiary premium percentage (as specified in paragraph (3)); and
(B) the national average monthly bid amount (computed under paragraph (4)) for the month.
(3) Beneficiary premium percentageFor purposes of this subsection, the beneficiary premium percentage for any year is the percentage equal to a fraction—
(A) the numerator of which is 25.5 percent (or, for 2030 and each subsequent year, the percent specified under paragraph (9)); and
(B) the denominator of which is 100 percent minus a percentage equal to—
(i) the total reinsurance payments which the Secretary estimates are payable under section 1395w–115(b) of this title with respect to the coverage year; divided by
(ii) the sum of—(I) the amount estimated under clause (i) for the year; and(II) the total payments which the Secretary estimates will be paid to prescription drug plans and MA–PD plans that are attributable to the standardized bid amount during the year, taking into account amounts paid by the Secretary and enrollees.
(4) Computation of national average monthly bid amount
(A) In general
(B) Weighted average
(i) In general
(ii) Special rule for 2006
(5) Standardized bid amount definedFor purposes of this subsection, the term “standardized bid amount” means the following:
(A) Prescription drug plans
(i) Basic coverage
(ii) Supplemental coverage
(B) MA–PD plans
(6) PDP approved bid defined
(7) Increase in base beneficiary premium based on income
(A) In general
(B) Monthly adjustment amountThe monthly adjustment amount specified in this subparagraph for an individual for a month in a year is equal to the product of—
(i) the quotient obtained by dividing—(I) the applicable percentage determined under paragraph (3)(C) of section 1395r(i) of this title (including application of paragraph (5) of such section) for the individual for the calendar year reduced by 25.5 percent (or, for 2030 and each subsequent year, the percent specified under paragraph (9)); by(II) 25.5 percent (or, for 2030 and each subsequent year, the percent specified under paragraph (9)); and
(ii) the base beneficiary premium (as computed under paragraph (2) or (8) (as applicable)).
(C) Modified adjusted gross income
(D) Determination by Commissioner of Social Security
(E) Procedures to assure correct income-related increase in base beneficiary premium
(i) Disclosure of base beneficiary premium
(ii) Additional disclosureNot later than October 15 of each year beginning with 2010, the Secretary shall disclose to the Commissioner of Social Security the following information for the purpose of carrying out the income-related increase in the base beneficiary premium under this paragraph with respect to the following year:(I) The modified adjusted gross income threshold applicable under paragraph (2) of section 1395r(i) of this title (including application of paragraph (5) of such section).(II) The applicable percentage determined under paragraph (3)(C) of section 1395r(i) of this title (including application of paragraph (5) of such section).(III) The monthly adjustment amount specified in subparagraph (B).(IV) Any other information the Commissioner of Social Security determines necessary to carry out the income-related increase in the base beneficiary premium under this paragraph.
(F) Rule of construction
(8) Premium stabilization
(A) In generalThe base beneficiary premium under this paragraph for a prescription drug plan for a month in 2024 through 2029 shall be computed as follows:
(i) 2024The base beneficiary premium for a month in 2024 shall be equal to the lesser of—(I) the base beneficiary premium computed under paragraph (2) for a month in 2023 increased by 6 percent; or(II) the base beneficiary premium computed under paragraph (2) for a month in 2024 that would have applied if this paragraph had not been enacted.
(ii) 2025The base beneficiary premium for a month in 2025 shall be equal to the lesser of—(I) the base beneficiary premium computed under clause (i) for a month in 2024 increased by 6 percent; or(II) the base beneficiary premium computed under paragraph (2) for a month in 2025 that would have applied if this paragraph had not been enacted.
(iii) 2026The base beneficiary premium for a month in 2026 shall be equal to the lesser of—(I) the base beneficiary premium computed under clause (ii) for a month in 2025 increased by 6 percent; or(II) the base beneficiary premium computed under paragraph (2) for a month in 2026 that would have applied if this paragraph had not been enacted.
(iv) 2027The base beneficiary premium for a month in 2027 shall be equal to the lesser of—(I) the base beneficiary premium computed under clause (iii) for a month in 2026 increased by 6 percent; or(II) the base beneficiary premium computed under paragraph (2) for a month in 2027 that would have applied if this paragraph had not been enacted.
(v) 2028The base beneficiary premium for a month in 2028 shall be equal to the lesser of—(I) the base beneficiary premium computed under clause (iv) for a month in 2027 increased by 6 percent; or(II) the base beneficiary premium computed under paragraph (2) for a month in 2028 that would have applied if this paragraph had not been enacted.
(vi) 2029The base beneficiary premium for a month in 2029 shall be equal to the lesser of—(I) the base beneficiary premium computed under clause (v) for a month in 2028 increased by 6 percent; or(II) the base beneficiary premium computed under paragraph (2) for a month in 2029 that would have applied if this paragraph had not been enacted.
(B) Clarification regarding 2030 and subsequent years
(9) Percent specified
(A) In generalSubject to subparagraph (B), for purposes of paragraph (3)(A), the percent specified under this paragraph for 2030 and each subsequent year is the percent that the Secretary determines is necessary to ensure that the base beneficiary premium computed under paragraph (2) for a month in 2030 is equal to the lesser of—
(i) the base beneficiary premium computed under paragraph (8)(A)(vi) for a month in 2029 increased by 6 percent; or
(ii) the base beneficiary premium computed under paragraph (2) for a month in 2030 that would have applied if this paragraph had not been enacted.
(B) Floor
(b) Late enrollment penalty
(1) In general
(2) Individuals subject to penalty
(3) Amount of penalty
(A) In generalThe amount determined under this paragraph for a part D eligible individual for a continuous period of eligibility is the greater of—
(i) an amount that the Secretary determines is actuarially sound for each uncovered month (as defined in subparagraph (B)) in the same continuous period of eligibility; or
(ii) 1 percent of the base beneficiary premium (computed under paragraph (2) or (8) of subsection (a) (as applicable)) for each such uncovered month in such period.
(B) Uncovered month defined
(4) Creditable prescription drug coverage definedFor purposes of this part, the term “creditable prescription drug coverage” means any of the following coverage, but only if the coverage meets the requirement of paragraph (5):
(A) Coverage under prescription drug plan or MA–PD plan
(B) Medicaid
(C) Group health plan
(D) State pharmaceutical assistance program
(E) Veterans’ coverage of prescription drugs
(F) Prescription drug coverage under medigap policies
(G) Military coverage (including TRICARE)
(H) Other coverage
(5) Actuarial equivalence requirement
(6) Procedures to document creditable prescription drug coverage
(A) In general
(B) Disclosure by entities offering creditable prescription drug coverage
(i) In general
(ii) Disclosure of non-creditable coverage
(C) Waiver of requirement
(7) Continuous period of eligibility
(A) In general
(B) Separate periodAny period during all of which 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 which the individual attained age 65; or
(ii) for which the basis for eligibility for such entitlement changed between section 426(b) of this title and section 426(a) of this title, between 426(b) 2
2 So in original. Probably should be “section 426(b)”.
of this title and section 426–1 of this title, or between section 426–1 of this title and section 426(a) of this title,shall be a separate continuous period of eligibility with respect to the individual (and each such period which terminates shall be deemed not to have existed for purposes of subsequently applying this paragraph).
(8) Waiver of penalty for subsidy-eligible individuals
(c) Collection of monthly beneficiary premiums
(1) In general
(2) Crediting of late enrollment penalty
(A) Portion attributable to increased actuarial costs
(B) Collection through withholding
(C) Collection by plan
(3) Fallback plans
(4) Collection of monthly adjustment amount
(A) In general
(B) Agreements
(Aug. 14, 1935, ch. 531, title XVIII, § 1860D–13, as added Pub. L. 108–173, title I, § 101(a)(2), Dec. 8, 2003, 117 Stat. 2102; amended Pub. L. 110–275, title I, § 114(a)(1), July 15, 2008, 122 Stat. 2506; Pub. L. 111–148, title III, § 3308(a), (b)(1), Mar. 23, 2010, 124 Stat. 472, 474; Pub. L. 117–169, title I, § 11201(d)(1), (2), (3)(C), Aug. 16, 2022, 136 Stat. 1888, 1890.)