II 111th CONGRESS 1st Session S. 677 IN THE SENATE OF THE UNITED STATES March 24, 2009 Mr. Ensign (for himself, Mrs. Feinstein, Mr. Grassley, Mr. Gregg, Mr. Graham, and Mr. Coburn) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend title XVIII of the Social Security Act to require wealthy beneficiaries to pay a greater share of their premiums under the Medicare prescription drug program.

1.

Short title

This Act may be cited as the Reforming an Entitlement through Premium Adjustments based on Income Resources (REPAIR) Act of 2009.

2.

Income-related reduction in part D premium subsidy

(a)

Income-related reduction in part D premium subsidy

(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)

Reduction in premium subsidy based on income

(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 premium subsidy applicable to the premium under this section for a month after December 2009 shall be reduced (and the monthly beneficiary premium 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 reduction in premium subsidy under this paragraph. (E)

Procedures to assure correct income-related reduction in premium subsidy

(i)

Disclosure of base beneficiary premium

Not later than September 15 of each year beginning with 2009, 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 reduction in premium subsidy under this paragraph with respect to the following year. (ii)

Additional disclosure

Not later than October 15 of each year beginning with 2009, the Secretary shall disclose to the Commissioner of Social Security the following information for the purpose of carrying out the income-related reduction in premium subsidy 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 reduction in premium subsidy 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 reduction in premium subsidy 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

Part D of title XVIII of the Social Security Act (42 U.S.C. 1395w–101 et seq.) is amended— (A)in section 1860D–13(a)(1)— (i)by redesignating subparagraph (F) as subparagraph (G); (ii)in subparagraph (G), as redesignated by subparagraph (A), by striking (D) and (E) and inserting (D), (E), and (F); and (iii)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). ; and (B)in section 1860D–15(a)(1)(B), by striking paragraph (1)(B) and inserting paragraphs (1)(B) and (1)(F). (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 striking part B premium subsidy adjustment and inserting parts B and D premium subsidy adjustments; (B)in subparagraph (A)— (i)in the matter preceding clause (i), by inserting or 1860D–13(a)(7) after 1839(i); and (ii)in clause (vii), by inserting after subsection (i) of such section the following: or under section 1860D–13(a)(7) of such Act; (C)in subparagraph (B)— (i)by inserting or such section 1860D–13(a)(7) before the period at the end; (ii)as amended by clause (i), by inserting or for the purpose of resolving tax payer appeals with respect to any such premium adjustment before the period at the end; and (iii)by adding at the end the following new sentence: Officers, employees, and contractors of the Social Security Administration may disclose such return information to officers, employees, and contractors of the Department of Health and Human Services, the Office of Personnel Management, the Railroad Retirement Board, the Department of Justice, and the courts of the United States to the extent necessary to carry out the purposes described in the preceding sentence.; and (D)by adding at the end the following new subparagraph: (C)

Timing of disclosure

Return information shall be disclosed to officers, employees, and contractors of the Social Security Administration under subparagraph (A) not later than the date that is 90 days prior to the date on which the taxpayer first becomes entitled to benefits under part A of title XVIII of the Social Security Act or eligible to enroll for benefits under part B of such title. .