42 U.S.C. § 1395w–116: Medicare Prescription…

Summary

Creates a Medicare Prescription Drug Account inside the Federal Supplementary Medical Insurance Trust Fund. The account gets money from gifts and bequests, interest on its balances, and deposits or appropriations made for the drug program. Money put into this account is kept separate from other trust fund money but is invested the same way. It also receives low‑income transfers, withheld premiums, and any remaining balance from the Transitional Assistance Account. The trustee must pay out money the Secretary says is needed to run the drug program. That includes payments for low‑income subsidies, other subsidy and fallback payments, payments to qualified retiree drug plans, administrative costs, and certain drug subsidy payments. The trustee must also send to the Medicaid grants account amounts the Secretary says are due because of higher payments under a related rule, and must forward premiums (and part of late penalties) withheld to plan sponsors and MA organizations. Money from this account is not counted when figuring Part B premiums. Congress may appropriate funds to cover government contributions, including an initial reserve not to exceed 10 percent of estimated 2006 expenditures.

Title 42, §1395w–116

The Public Health and Welfare, Source: USLM XML via OLRC

(a)Establishment and operation of Account

(1)Establishment

There is created within the Federal Supplementary Medical Insurance Trust Fund established by section 1395t of this title an account to be known as the “Medicare Prescription Drug Account” (in this section referred to as the “Account”).

(2)Funding

The Account shall consist of such gifts and bequests as may be made as provided in section 401(i)(1) of this title, accrued interest on balances in the Account, and such amounts as may be deposited in, or appropriated to, such Account as provided in this part.

(3)Separate from rest of Trust Fund

Funds provided under this part to the Account shall be kept separate from all other funds within the Federal Supplementary Medical Insurance Trust Fund, but shall be invested, and such investments redeemed, in the same manner as all other funds and investments within such Trust Fund.

(b)Payments from Account

(1)In general

The Managing Trustee shall pay from time to time from the Account such amounts as the Secretary certifies are necessary to make payments to operate the program under this part, including—

(A)payments under section 1395w–114 of this title (relating to low-income subsidy payments);

(B)payments under section 1395w–115 of this title (relating to subsidy payments and payments for fallback plans);

(C)payments to sponsors of qualified retiree prescription drug plans under section 1395w–132(a) of this title;

(D)payments with respect to administrative expenses under this part in accordance with section 401(g) of this title; and

(E)payments under section 1395w–114d of this title (relating to selected drug subsidy payments).

(2)Transfers to Medicaid account for increased administrative costs

The Managing Trustee shall transfer from time to time from the Account to the Grants to States for Medicaid account amounts the Secretary certifies are attributable to increases in payment resulting from the application of section 1396u–5(b) of this title.

(3)Payments of premiums withheld

The Managing Trustee shall make payment to the PDP sponsor or MA organization involved of the premiums (and the portion of late enrollment penalties) that are collected in the manner described in section 1395w–24(d)(2)(A) of this title and that are payable under a prescription drug plan or MA–PD plan offered by such sponsor or organization.

(4)Treatment in relation to part B premium

Amounts payable from the Account shall not be taken into account in computing actuarial rates or premium amounts under section 1395r of this title.

(c)Deposits into Account

(1)Low-income transfer

Amounts paid under section 1396u–5(c) of this title (and any amounts collected or offset under paragraph (1)(C) of such section) are deposited into the Account.

(2)Amounts withheld

Pursuant to section 1395w–113(c) and 1395w–24(d) of this title (as applied under this part), amounts that are withheld (and allocated) to the Account are deposited into the Account.

(3)Appropriations to cover Government contributions

There are authorized to be appropriated from time to time, out of any moneys in the Treasury not otherwise appropriated, to the Account, an amount equivalent to the amount of payments made from the Account under subsection (b) plus such amounts as the Managing Trustee certifies is necessary to maintain an appropriate contingency margin, reduced by the amounts deposited under paragraph (1) or subsection (a)(2).

(4)Initial funding and reserve

In order to assure prompt payment of benefits provided under this part and the administrative expenses thereunder during the early months of the program established by this part and to provide an initial contingency reserve, there are authorized to be appropriated to the Account, out of any moneys in the Treasury not otherwise appropriated, such amount as the Secretary certifies are required, but not to exceed 10 percent of the estimated total expenditures from such Account in 2006.

(5)Transfer of any remaining balance from Transitional Assistance Account

Any balance in the Transitional Assistance Account that is transferred under section 1395w–141(k)(5) of this title shall be deposited into the Account.

Editorial Notes

Amendments

2022—Subsec. (b)(1)(E). Pub. L. 117–169 added subpar. (E).

§1395w–116 Medicare Prescription Drug Account in the Federal Supplementary Medical Insurance Trust Fund

Summary

Title 42, §1395w–116

Notes & Related Subsidiaries

Editorial Notes

Amendments

Citations & Metadata