Sec. 4. Medicare direct supplemental insurance option
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Title XVIII of the Social Security Act is amended by inserting after section 1882 ( 42 U.S.C. 1395ss ) the following new section: The Secretary shall provide for the offering under this section of a voluntary program to supplement the benefits provided to individuals under parts A and B of this title. The Secretary shall provide procedures for the enrollment under the program under this section of individuals who are entitled to benefits under part A and enrolled under part B, but who are not enrolled in a Medicare Advantage plan (or in a plan under section 1876).
Such procedures shall be consistent with the following: There shall be an initial enrollment period during the last calendar quarter of 2020 that permits all individuals who are eligible to enroll at that time under this subsection to enroll and obtain benefits effective on January 1, 2021. For individuals who are not eligible to enroll at such time but who subsequently become eligible, there shall be an individual enrollment period which is the 6-month period described in section 1882(s)(2)(A).
The Secretary shall permit eligible individuals to enroll at other times (and not less frequently than annually) in a uniform manner, but such enrollment shall be subject to a late enrollment penalty under subsection (d)(2)(B). The benefits provided under the program under this section shall consist of payment of the cost of deductibles, copayments, and other cost-sharing amounts (including amounts attributable to and permitted as balance billing) otherwise imposed or permitted under this title, subject to an annual deductible of $100.
The Secretary shall coordinate payment of benefits under this part with those under parts A and B and may, for such purpose, enter into appropriate arrangements with qualified entities (which may include fiscal intermediaries and carriers). The benefits under this section shall not be subject to any pre-existing condition or similar underwriting limitation. The Secretary shall, during September of each year beginning with 2020, determine a monthly actuarial rate for all enrollees under this section, which rate shall be applicable for months in the succeeding calendar year.
Such actuarial rate shall be the amount the Secretary estimates to be necessary so that the aggregate amount for such calendar year with respect to those enrollees will equal the total amount which the Secretary estimates will be payable under this section for benefits accrued (including services performed and related administrative costs incurred) in such calendar year under the program under this section. In calculating the monthly actuarial rate, the Secretary shall make adjustments to take into account errors in estimations under this paragraph for previous years and shall include an appropriate amount for a contingency margin.
The monthly premium of each individual enrolled under this section for a month in a year shall be the monthly actuarial rate determined under paragraph
(1)for months in such year. Such premium shall be community-rated and shall not vary among enrollees based upon the age, place of residence, or any other factors, except as provided under subparagraph (B). In the case of an individual who does not enroll under this section in a period provided under paragraph
(1)or
(2)of subsection (b), the Secretary shall increase the monthly premium (in a manner similar to that applied under part B pursuant to section 1839(b)) of 10 percent for each full 12 months in which the individual could have been but was not so enrolled. In applying such an increase— the aggregate percentage increase may not exceed 100 percent; and periods of time in which an individual is enrolled under an employee welfare benefit plan described in section 1882(s)(3)(B)(i), under a Medicare Advantage plan, with an organization described in section 1882(s)(3)(B)(iii), or under a PACE program under section 1894 shall not be taken into account. The Secretary shall provide for the collection of premiums for enrollees under this part in the same manner as premiums under part B are collected under section 1840, except that any reference in such section to the Federal Supplementary Medical Insurance Trust Fund shall be deemed a reference to an account (to be known as the Direct Medicare Supplemental Insurance Account ) to be established in the Treasury by the Secretary to carry out the program under this section. Amounts in such account may be invested and draw interest in the same manner as such Trust Fund under section 1840(c). Premium amounts deposited into the account established under paragraph
(3)shall be available without regard to appropriations to the Secretary to make payment for benefits and administrative costs incurred in carrying out this section. For purposes of applying section 1882(d)(3)(A), coverage under this section shall be treated as coverage under a Medicare supplemental policy. . The amendment made by subsection
(a)shall take effect on the date of the enactment of this Act and shall apply to benefits for months beginning with January 2020.
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Sec. 4
Medicare direct supplemental insurance option
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