§1854. Premiums362

Social Security Act

Title XVIII — Health Insurance for the Aged and Disabled

Part C — Medicare + Choice Program²⁸⁰

(42 U.S.C. 1395w-24)

(a) Submission of proposed premiums and related information.-

(a)(1) In general.- Not later than the second Monday in September of 2002, 2003, and 2004 (or July 1 of each other year)³⁶³, each Medicare+Choice organization shall submit to the Secretary, in a form and manner specified by the Secretary and for each Medicare+Choice plan for the service area (or segment of such an area if permitted under subsection (h)) in which it intends to be offered in the following year-

(a)(1)(A) the information described in paragraph (2), (3), or (4) for the type of plan involved; and

(a)(1)(B) the enrollment capacity (if any) in relation to the plan and area.

(a)(2) Information required for coordinated care plans.- For a Medicare+Choice plan described in section 1851(a)(2)(A), the information described in this paragraph is as follows:

(a)(2)(A) Basic (and additional) benefits.-For benefits described in section 1852(a)(1)(A)-

(a)(2)(A)(i) the adjusted community rate (as defined in subsection (f)(3));

(a)(2)(A)(ii) the Medicare+Choice monthly basic beneficiary premium (as defined in subsection (b)(2)(A));

(a)(2)(A)(iii) a description of deductibles, coinsurance, and copayments applicable under the plan and the actuarial value of such deductibles, coinsurance, and copayments, described in subsection (e)(1)(A); and

(a)(2)(A)(iv) if required under subsection (f)(1), a description of the additional benefits to be provided pursuant to such subsection and the value determined for such proposed benefits under such subsection.

(a)(2)(B) Supplemental benefits.- For benefits described in section 1852(a)(3)-

(a)(2)(B)(i) the adjusted community rate (as defined in subsection (f)(3));

(a)(2)(B)(ii) the Medicare+Choice monthly supplemental beneficiary premium (as defined in subsection (b)(2)(B)); and

(a)(2)(B)(iii) a description of deductibles, coinsurance, and copayments applicable under the plan and the actuarial value of such deductibles, coinsurance, and copayments, described in subsection (e)(2).

(a)(3) Requirements for MSA plans.- For an MSA plan described, the information described in this paragraph is as follows:

(a)(3)(A) Basic (and additional) benefits.- For benefits described in section 1852(a)(1)(A), the amount of the Medicare+Choice monthly MSA premium.

(a)(3)(B) Supplemental benefits.- For benefits described in section 1852(a)(3), the amount of the Medicare+Choice monthly supplementary beneficiary premium.

(a)(4) Requirements for private fee-for-service plans.- For a Medicare+Choice plan described in section 1851(a)(2)(C) for benefits described in section 1852(a)(1)(A), the information described in this paragraph is as follows:

(a)(4)(A) Basic (and additional) benefits.- For benefits described in section 1852(a)(1)(A)-

(a)(4)(A)(i) the adjusted community rate (as defined in subsection (f)(3));

(a)(4)(A)(ii) the amount of the Medicare+Choice monthly basic beneficiary premium;

(a)(4)(A)(iii) a description of the deductibles, coinsurance, and copayments applicable under the plan, and the actuarial value of such deductibles, coinsurance, and copayments, as described in subsection (e)(4)(A); and

(a)(4)(A)(iv) if required under subsection (f)(1), a description of the additional benefits to be provided pursuant to such subsection and the value determined for such proposed benefits under such subsection.

(a)(4)(B) Supplemental benefits.- For benefits described in section 1852(a)(3), the amount of the Medicare+Choice monthly supplemental beneficiary premium (as defined in subsection (b)(2)(B)).

(a)(5) Review.-

(a)(5)(A) In general.- Subject to subparagraph (B), the Secretary shall review the adjusted community rates, the amounts of the basic and supplemental premiums, and values filed under this subsection and shall approve or disapprove such rates, amounts, and values so submitted. The Chief Actuary of the Centers for Medicare and Medicaid Services³⁶⁴ shall review the actuarial assumptions and data used by the Medicare+Choice organization with respect to such rates, amounts, and values so submitted to determine the appropriateness of such assumptions and data.

(a)(5)(B) Exception.- The Secretary shall not review, approve, or disapprove the amounts submitted under paragraph (3) or subparagraphs (A)(ii) and (B) of paragraph (4).

(b) Monthly premium charged.-

(b)(1) In general.-

(b)(1)(A) Rule for other than MSA plans.- The monthly amount of the premium charged to an individual enrolled in a Medicare+Choice plan (other than an MSA plan) offered by a Medicare+Choice organization shall be equal to the sum of the Medicare+Choice monthly basic beneficiary premium and the Medicare+Choice monthly supplementary beneficiary premium (if any).

(b)(1)(B) MSA plans.-The monthly amount of the premium charged to an individual enrolled in an MSA plan offered by a Medicare+Choice organization shall be equal to the Medicare+Choice monthly supplemental beneficiary premium (if any).

(b)(2) Premium terminology defined.- For purposes of this part:

(b)(2)(A) The Medicare+Choice monthly basic beneficiary premium.-

The term "Medicare+Choice monthly basic beneficiary premium" means, with respect to a Medicare+Choice plan, the amount authorized to be charged under subsection (e)(1) of this section for the plan, or, in the case of a Medicare+Choice private fee-for-service plan, the amount filed under subsection (a)(4)(A)(ii).

(b)(2)(B) Medicare+Choice monthly supplemental beneficiary premium.-The term Medicare+Choice monthly supplemental beneficiary premium means, with respect to a Medicare+Choice plan, the amount authorized to be charged under subsection (e)(2) for the plan or, in the case of a MSA plan or Medicare+Choice private fee-for-service plan, the amount filed under paragraph (3)(B) or (4)(B) of subsection (a).

(b)(2)(C) Medicare+Choice monthly MSA premium.- The term Medicare+Choice monthly MSA premium means, with respect to a Medicare+Choice plan, the amount of such premium filed under subsection (a)(3)(A) for the plan.

(c) Uniform premium.- The Medicare+Choice monthly basic and supplemental beneficiary premium, the Medicare+Choice monthly MSA premium charged under subsection (b) of a Medicare+Choice organization under this part may not vary among individuals enrolled in the plan.

(d) Terms and conditions of imposing premiums.- Each Medicare+Choice organization shall permit the payment of Medicare+Choice monthly basic and supplemental beneficiary premiums on a monthly basis, may terminate election of individuals for a Medicare+Choice plan for failure to make premium payments only in accordance with section 1851(g)(3)(B)(i), and may not provide for cash or other monetary rebates as an inducement for enrollment or otherwise.

(e) Limitation on enrollee liability.-

(e)(1) For basic and additional benefits.- In no event may-

(e)(1)(A) the Medicare+Choice monthly basic beneficiary premium (multiplied by 12) and the actuarial value of the deductibles, coinsurance, and copayments applicable on average to individuals enrolled under this part with a Medicare+Choice plan described in section 1851(a)(2)(A) of an organization with respect to required benefits described in section 1852(a)(1)(A) and additional benefits (if any) required under subsection (f)(1)(A) for a year, exceed

(e)(1)(B) the actuarial value of the deductibles, coinsurance, and copayments that would be applicable on average to individuals entitled to benefits under part A and enrolled under part B if they were not members of a Medicare+Choice organization for the year.

(e)(2) For supplemental benefits.- If the Medicare+Choice organization provides to its members enrolled under this part in a Medicare+Choice plan described in section 1851(a)(2)(A) with respect to supplemental benefits described in section 1852(a)(3), the sum of the Medicare+Choice monthly supplemental beneficiary premium (multiplied by 12) charged and the actuarial value of its deductibles, coinsurance, and copayments charged with respect to such benefits may not exceed the adjusted community rate for such benefits (as defined in subsection (f)(3)).

(e)(3) Determination on other basis.- If the Secretary determines that adequate data are not available to determine the actuarial value under paragraph (1)(A) or (2), the Secretary may determine such amount with respect to all individuals in same geographic area, the State, or in the United States, eligible to enroll in the Medicare+Choice plan involved under this part or on the basis of other appropriate data.

(e)(4) Special rule for private fee-for-service plans.- With respect to a Medicare+Choice private fee-for-service plan (other than a plan that is an MSA plan), in no event may-

(e)(4)(A) the actuarial value of the deductibles, coinsurance, and copayments applicable on average to individuals enrolled under this part with such a plan of an organization with respect to required benefits described in section 1852(a)(1), exceed

(e)(4)(B) the actuarial value of the deductibles, coinsurance, and copayments that would be applicable on average to individuals entitled to benefits under part A and enrolled under part B if they were not members of a Medicare+Choice organization for the year.

(f) Requirement for additional benefits.-

(f)(1) Requirement.-

(f)(1)(A) In general.- Each Medicare+Choice organization (in relation to a Medicare+Choice plan, other than an MSA plan, it offers) shall provide that if there is an excess amount (as defined in subparagraph (B)) for the plan for a contract year, subject to the succeeding provisions of this subsection, the organization shall provide to individuals such additional benefits (as the organization may specify) in a value which the Secretary determines is at least equal to the adjusted excess amount (as defined in subparagraph (C)).

(f)(1)(B) Excess amount.- For purposes of this paragraph, the excess amount, for an organization for a plan, is the amount (if any) by which-

(f)(1)(B)(i) the average of the capitation payments made to the organization under section 1853 for the plan at the beginning of contract year, exceeds

(f)(1)(B)(ii) the actuarial value of the required benefits described in section 1852(a)(1)(A) under the plan for individuals under this part, as determined based upon an adjusted community rate described in paragraph (3) (as reduced for the actuarial value of the coinsurance, copayments, and deductibles under parts A and B).

(f)(1)(C) Adjusted excess amount.- For purposes of this paragraph, the adjusted excess amount, for an organization for a plan, is the excess amount reduced to reflect any amount withheld and reserved for the organization for the year under paragraph (2).

(f)(1)(D) Uniform application.- This paragraph shall be applied uniformly for all enrollees for a plan.

(f)(1)(E) Premium reductions.-

(f)(1)(E)(i) In general.- Subject to clause (ii), as part of providing any additional benefits required under subparagraph (A), a Medicare+Choice organization may elect a reduction in its payments under section 1853(a)(1)(A) with respect to a Medicare+Choice plan and the Secretary shall apply such reduction to reduce the premium under section 1839 of each enrollee in such plan as provided in section 1840(i).

(f)(1)(E)(ii) Amount of reduction.- The amount of the reduction under clause (i) with respect to any enrollee in a Medicare+Choice plan-

(f)(1)(E)(ii)(I) may not exceed 125 percent of the premium described under section 1839(a)(3); and

(f)(1)(E)(ii)(II) shall apply uniformly to each enrollee of the Medicare+Choice plan to which such reduction applies.³⁶⁵

(f)(1)(F) Construction.- Nothing in this subsection shall be construed as preventing a Medicare+Choice organization from providing supplemental benefits (described in section 1852(a)(3)) that are in addition to the health care benefits otherwise required to be provided under this paragraph and from imposing a premium for such supplemental benefits.

(f)(2) Stabilization fund.- A Medicare+Choice organization may provide that a part of the value of an excess amount described in paragraph (1) be withheld and reserved in the Federal Hospital Insurance Trust Fund and in the Federal Supplementary Medical Insurance Trust Fund (in such proportions as the Secretary determines to be appropriate) by the Secretary for subsequent annual contract periods, to the extent required to stabilize and prevent undue fluctuations in the additional benefits offered in those subsequent periods by the organization in accordance with such paragraph. Any of such value of the amount reserved which is not provided as additional benefits described in paragraph (1)(A) to individuals electing the Medicare+Choice plan of the organization in accordance with such paragraph prior to the end of such periods, shall revert for the use of such trust funds.

(f)(3) Adjusted community rate.- For purposes of this subsection, subject to paragraph (4), the term adjusted community rate for a service or services means, at the election of a Medicare+Choice organization, either-

(f)(3)(A) the rate of payment for that service or services which the Secretary annually determines would apply to an individual electing a Medicare+Choice plan under this part if the rate of payment were determined under a community rating system (as defined in section 1302(8) of the Public Health Service Act, other than subparagraph (C)), or

(f)(3)(B) such portion of the weighted aggregate premium, which the Secretary annually estimates would apply to such an individual, as the Secretary annually estimates is attributable to that service or services,

but adjusted for differences between the utilization characteristics of the individuals electing coverage under this part and the utilization characteristics of the other enrollees with the plan (or, if the Secretary finds that adequate data are not available to adjust for those differences, the differences between the utilization characteristics of individuals selecting other Medicare+Choice coverage, or Medicare+Choice eligible individuals in the area, in the State, or in the United States, eligible to elect Medicare+Choice coverage under this part and the utilization characteristics of the rest of the population in the area, in the State, or in the United States, respectively).

(f)(4) Determination based on insufficient data.- For purposes of this subsection, if the Secretary finds that there is insufficient enrollment experience to determine an average of the capitation payments to be made under this part at the beginning of a contract period or to determine (in the case of a newly operated provider-sponsored organization or other new organization) the adjusted community rate for the organization, the Secretary may determine such an average based on the enrollment experience of other contracts entered into under this part and may determine such a rate using data in the general commercial marketplace.

(g) Prohibition of state imposition of premium taxes.- No State may impose a premium tax or similar tax with respect to payments to Medicare+Choice organizations under section 1853.

(h) Permitting use of segments of service areas.- The Secretary shall permit a Medicare+Choice organization to elect to apply the provisions of this section uniformly to separate segments of a service area (rather than uniformly to an entire service area) as long as such segments are composed of one or more Medicare+Choice payment areas.

³⁶² P.L. 108-173, §222, amends §1854 in several places; however, P.L. 108-173, §223(a) provides that these amendments shall apply with respect to plan years beginning on or after January 1, 2006.

P.L. 108-173, §223(b), provides that the Secretary shall revise the regulations previously promulgated to carry out the provisions of P.L. 108-173.

³⁶³ P.L. 107-188, §532(b)(1), struck out "Not later than July 1 of each year" and substituted "Not later than the second Monday in September of 2002, 2003, and 2004 (or July 1 of each other year)", applicable to information submitted for years beginning with 2003.

³⁶⁴ P.L. 108-173, §900(e)(1)(H), struck out "Health Care Financing Administration" and substituted "Centers for Medicare and Medicaid Services".

³⁶⁵ P.L. 106-554, §1(a)(6) (606(a)(1)(B)), added this subparagraph (E), applicable to years beginning with 2003.