Implementation Status
CMS captured this change in section 30.2.5 of Chapter 6 of the Medicare Prescription Drug Benefit Manual. It was codified by the final MA/Part D rule issued on April 15, 2011 (see pp. 21453-58).
2016
On July 29, Medicare announced that the average premium for a Medicare Part D plan in 2017 is projected to remain stable at an est. $34 per month, representing an increase of approximately $1.50 over the average 2016 premium of $32.56. In the announcement Acting Administrator Slavitt noted that he was “increasingly concerned about the rising cost of drugs, especially high-cost specialty drugs, and the impact of these costs on the Medicare program.”
Statutory Text
SEC. 3308. REDUCING PART D PREMIUM SUBSIDY FOR HIGH-INCOME BENEFICIARIES. (a) INCOME-RELATED INCREASE IN PART D PREMIUM.— (1) IN GENERAL.—Section 1860D–13(a) of the Social Security Act (42 U.S.C. 1395w–113(a)) is amended by adding at the end the following new paragraph: ‘‘(7) INCREASE IN BASE BENEFICIARY PREMIUM BASED ON IN- COME.— ‘‘(A) IN GENERAL.—In the case of an individual whose modified adjusted gross income exceeds the threshold amount applicable under paragraph (2) of section 1839(i) (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). ‘‘(B) MONTHLY ADJUSTMENT AMOUNT.—The 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 1839(i) (including application of paragraph (5) of such section) for the individual for the calendar year reduced by 25.5 percent; by ‘‘(II) 25.5 percent; and ‘‘(ii) the base beneficiary premium (as computed under paragraph (2)). ‘‘(C) MODIFIED ADJUSTED GROSS INCOME.—For purposes of this paragraph, the term ‘modified adjusted gross income’ has the meaning given such term in subparagraph (A) of section 1839(i)(4), determined for the taxable year applicable under subparagraphs (B) and (C) of such section. ‘‘(D) 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. ‘‘(E) PROCEDURES TO ASSURE CORRECT 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 shall disclose to the Commissioner of Social Security the amount of the base beneficiary premium (as computed under paragraph (2)) for the purpose of carrying out the income-related increase in the base beneficiary premium under this paragraph with respect to the following year. ‘‘(ii) ADDITIONAL DISCLOSURE.—Not 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 1839(i) (including application of paragraph (5) of such section). ‘‘(II) The applicable percentage determined under paragraph (3)(C) of section 1839(i) (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.—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.’’. (2) COLLECTION OF MONTHLY ADJUSTMENT AMOUNT.—Section 1860D–13(c) of the Social Security Act (42 U.S.C. 1395w– 113(c)) is amended— (A) in paragraph (1), by striking ‘‘(2) and (3)’’ and inserting ‘‘(2), (3), and (4)’’; and (B) by adding at the end the following new paragraph: ‘‘(4) COLLECTION OF MONTHLY ADJUSTMENT AMOUNT.— ‘‘(A) IN GENERAL.—Notwithstanding any provision of this subsection or section 1854(d)(2), 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 section 1840. ‘‘(B) 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.’’. (b) CONFORMING AMENDMENTS.— (1) MEDICARE.—Section 1860D–13(a)(1) of the Social Security Act (42 U.S.C. 1395w–113(a)(1)) is amended— (A) by redesignating subparagraph (F) as subparagraph (G); (B) in subparagraph (G), as redesignated by subparagraph (A), by striking ‘‘(D) and (E)’’ and inserting ‘‘(D), (E), and (F)’’; and (C) by inserting after subparagraph (E) the following new subparagraph: ‘‘(F) INCREASE BASED ON INCOME.—The monthly beneficiary premium shall be increased pursuant to paragraph (7).’’. (2) INTERNAL REVENUE CODE.—Section 6103(l)(20) of the Internal Revenue Code of 1986 (relating to disclosure of return information to carry out Medicare part B premium subsidy adjustment) is amended— (A) in the heading, by inserting ‘‘AND PART D BASE BENEFICIARY PREMIUM INCREASE’’ after ‘‘PART B PREMIUM SUBSIDY ADJUSTMENT’’; (B) in subparagraph (A)— (i) in the matter preceding clause (i), by inserting ‘‘or increase under section 1860D–13(a)(7)’’ after ‘‘1839(i)’’; and (ii) in clause (vii), by inserting after ‘‘subsection (i) of such section’’ the following: ‘‘or increase under section 1860D–13(a)(7) of such Act’’; and (C) in subparagraph (B)— (i) by striking ‘‘Return information’’ and inserting the following: ‘‘(i) IN GENERAL.—Return information’’; (ii) by inserting ‘‘or increase under such section 1860D–13(a)(7)’’ before the period at the end; (iii) as amended by clause (i), by inserting ‘‘or for the purpose of resolving taxpayer appeals with respect to any such premium adjustment or increase’’ before the period at the end; and (iv) by adding at the end the following new clause: ‘‘(ii) DISCLOSURE TO OTHER AGENCIES.—Officers, employees, and contractors of the Social Security Administration may disclose— ‘‘(I) the taxpayer identity information and the amount of the premium subsidy adjustment or premium increase with respect to a taxpayer described in subparagraph (A) to officers, employees, and contractors of the Centers for Medicare and Medicaid Services, to the extent that such disclosure is necessary for the collection of the premium subsidy amount or the increased premium amount, ‘‘(II) the taxpayer identity information and the amount of the premium subsidy adjustment or the increased premium amount with respect to a taxpayer described in subparagraph (A) to officers and employees of the Office of Personnel Management and the Railroad Retirement Board, to the extent that such disclosure is necessary for the collection of the premium subsidy amount or the increased premium amount, ‘‘(III) return information with respect to a taxpayer described in subparagraph (A) to officers and employees of the Department of Health and Human Services to the extent necessary to resolve administrative appeals of such premium subsidy adjustment or increased premium, and ‘‘(IV) return information with respect to a taxpayer described in subparagraph (A) to officers and employees of the Department of Justice for use in judicial proceedings to the extent necessary to carry out the purposes described in clause (i).’’.