H.R. 3665 — Medicare Economic Security Solutions Act

This section revises the late enrollment penalty for Medicare Part B (i.e., Supplementary Medical Insurance covering physician and outpatient services) by increasing the monthly premium surcharge to 15% (from 10%) for each full 12-month period of non-enrollment but limiting its application to premiums paid during a period equal to twice the number of months in that period (previously indefinite). (1) It makes conforming amendments to the low-income Part B premium subsidy program under section 1818 of the Social Security Act by removing obsolete cross-references to the prior penalty structure. (2) The changes apply to premiums for months beginning after the 90-day period following enactment, with prior months of eligibility without enrollment or increased premiums counting toward the penalty period.

This section expands the exception to the Medicare Part B late enrollment premium penalty (i.e., a permanent 10% premium increase for each full 12-month period of delayed enrollment without creditable coverage) by eliminating the requirement that delayed enrollment be due to an individual's (or spouse's) current employment—thus including COBRA continuation coverage and retiree coverage—and by adding months with demonstrated coverage under VA health care programs (chapter 17 of title 38, U.S. Code). The changes apply to premiums paid for months beginning after the 90-day period following enactment.

This section expands the Medicare Part B special enrollment period (SEP)—which previously allowed penalty-free delayed enrollment only for individuals (or spouses) with group health plan coverage based on current employment status—to also cover terminations of COBRA continuation coverage or retiree coverage by striking the "current employment status" requirement from three specified provisions. (Thus, affected individuals may enroll in Part B during the eight-month SEP beginning the month of coverage termination or the prior two months, without late enrollment penalties.) The changes apply to coverage terminations occurring after the 90-day period beginning on the date of enactment.