Charge the Part D income-related premium only to Part D enrollees

changelog.d/medicare-part-d-enrollment.fixed.md

@@ -0,0 +1 @@
+Charge the Medicare Part D income-related monthly adjustment amount only to Part D enrollees, through a new takes_up_medicare_part_d_if_eligible input that defaults to true.

policyengine_us/tests/policy/baseline/gov/hhs/medicare/eligibility/income_adjusted_part_d_premium_surcharge.yaml

@@ -47,6 +47,44 @@
   output:
     income_adjusted_part_d_premium_surcharge: 0
 
+- name: unit test 4a - 2026 Medicare enrollee above the IRMAA threshold without Part D.
+  period: 2026
+  input:
+    age: 66
+    filing_status: SINGLE
+    adjusted_gross_income:
+      2024: 109_001
+    tax_exempt_interest_income:
+      2024: 0
+    takes_up_medicare_part_d_if_eligible: false
+  output:
+    income_adjusted_part_d_premium_surcharge: 0
+
+- name: unit test 4b - 2026 joint couple in the third tier where only one spouse has Part D.
+  period: 2026
+  input:
+    people:
+      head:
+        age: 67
+      spouse:
+        age: 67
+        takes_up_medicare_part_d_if_eligible: false
+    tax_units:
+      tax_unit:
+        members: [head, spouse]
+        filing_status: JOINT
+        adjusted_gross_income:
+          2024: 342_001
+    households:
+      household:
+        members: [head, spouse]
+  output:
+    medicare_part_d_enrolled: [true, false]
+    # $60.40 a month for the enrolled spouse; none for the other.
+    income_adjusted_part_d_premium_surcharge: [724.8, 0]
+    # Part B premium and IRMAA ($202.90 + $324.60 a month) are unaffected.
+    gross_medicare_part_b_premium: [6_330, 6_330]
+
 - name: Case 5, 2026 single filer at the IRMAA threshold.
   period: 2026
   input:

policyengine_us/tests/policy/baseline/gov/hhs/medicare/eligibility/medicare_part_d_enrolled.yaml

@@ -0,0 +1,38 @@
+- name: Case 1, a Medicare enrollee takes up Part D by default.
+  period: 2026
+  input:
+    age: 70
+  output:
+    medicare_part_d_enrolled: true
+
+- name: Case 2, a Medicare enrollee without Part D.
+  period: 2026
+  input:
+    age: 70
+    takes_up_medicare_part_d_if_eligible: false
+  output:
+    medicare_part_d_enrolled: false
+
+- name: Case 3, no Part D without Part A or Part B.
+  period: 2026
+  input:
+    age: 70
+    takes_up_medicare_if_eligible: false
+  output:
+    medicare_part_d_enrolled: false
+
+- name: Case 4, no Part D below Medicare age without disability entitlement.
+  period: 2026
+  input:
+    age: 50
+  output:
+    medicare_part_d_enrolled: false
+
+- name: Case 5, disability entitlement under 65 opens Part D.
+  period: 2026
+  input:
+    age: 50
+    social_security_disability: 20_000
+    months_receiving_social_security_disability: 24
+  output:
+    medicare_part_d_enrolled: true

policyengine_us/tests/policy/baseline/gov/hhs/medicare/test_part_d_enrollment.py

@@ -0,0 +1,94 @@
+"""The Part D income-related premium applies only to Part D enrollees.
+
+42 U.S.C. 1395w-113(a)(7) raises the Part D beneficiary premium, which only
+Part D enrollees pay. Invariants checked for every drawn set of people:
+- the surcharge is never negative and is zero for anyone not in Part D;
+- for Part D enrollees it equals the surcharge when every Medicare enrollee
+  takes up Part D, so the enrollment gate removes charges and changes none;
+- Part D enrollment implies Medicare enrollment, which implies eligibility;
+- Part D take-up leaves the Part B premium unchanged.
+
+Each example builds two small simulations on the shared model system; no
+extra tax-benefit system stays resident.
+"""
+
+import numpy as np
+from hypothesis import HealthCheck, given, settings
+from hypothesis import strategies as st
+
+from policyengine_us import Simulation
+
+FILING_STATUSES = [
+    "SINGLE",
+    "JOINT",
+    "HEAD_OF_HOUSEHOLD",
+    "SURVIVING_SPOUSE",
+    "SEPARATE",
+]
+# Years with brackets of their own.
+YEARS = [2024, 2025, 2026]
+
+PERSON = st.fixed_dictionaries(
+    {
+        "age": st.integers(min_value=55, max_value=95),
+        "takes_up_medicare": st.booleans(),
+        "takes_up_part_d": st.booleans(),
+        # MAGI is stored as float32; draw values it can hold.
+        "magi": st.floats(min_value=0, max_value=1_500_000, width=32),
+        "filing_status": st.sampled_from(FILING_STATUSES),
+    }
+)
+
+
+def simulate(people, year, everyone_takes_up_part_d):
+    situation = {"people": {}, "tax_units": {}, "households": {}}
+    for i, person in enumerate(people):
+        name = f"person_{i}"
+        situation["people"][name] = {
+            "age": {year: person["age"]},
+            "takes_up_medicare_if_eligible": {year: person["takes_up_medicare"]},
+            "takes_up_medicare_part_d_if_eligible": {
+                year: everyone_takes_up_part_d or person["takes_up_part_d"]
+            },
+        }
+        situation["tax_units"][f"tax_unit_{i}"] = {
+            "members": [name],
+            "filing_status": {year: person["filing_status"]},
+            "medicare_irmaa_magi_two_years_prior": {year: person["magi"]},
+        }
+        situation["households"][f"household_{i}"] = {"members": [name]}
+    return Simulation(situation=situation)
+
+
+@settings(
+    max_examples=25,
+    deadline=None,
+    suppress_health_check=[HealthCheck.too_slow],
+)
+@given(
+    people=st.lists(PERSON, min_size=1, max_size=8),
+    year=st.sampled_from(YEARS),
+)
+def test_part_d_surcharge_applies_only_to_part_d_enrollees(people, year):
+    sim = simulate(people, year, everyone_takes_up_part_d=False)
+    everyone = simulate(people, year, everyone_takes_up_part_d=True)
+
+    surcharge = sim.calculate("income_adjusted_part_d_premium_surcharge", year)
+    surcharge_if_all_enroll = everyone.calculate(
+        "income_adjusted_part_d_premium_surcharge", year
+    )
+    part_d = sim.calculate("medicare_part_d_enrolled", year)
+    enrolled = sim.calculate("medicare_enrolled", year)
+    eligible = sim.calculate("is_medicare_eligible", year)
+    takes_up_part_d = np.array([person["takes_up_part_d"] for person in people])
+
+    assert (surcharge >= 0).all()
+    assert (surcharge[~part_d] == 0).all()
+    np.testing.assert_array_equal(surcharge[part_d], surcharge_if_all_enroll[part_d])
+    np.testing.assert_array_equal(part_d, enrolled & takes_up_part_d)
+    assert (~part_d | enrolled).all()
+    assert (~enrolled | eligible).all()
+    np.testing.assert_array_equal(
+        sim.calculate("gross_medicare_part_b_premium", year),
+        everyone.calculate("gross_medicare_part_b_premium", year),
+    )

policyengine_us/variables/gov/hhs/medicare/eligibility/part_d/income_adjusted_part_d_premium_surcharge.py

@@ -7,7 +7,7 @@ class income_adjusted_part_d_premium_surcharge(Variable):
     label = "Medicare Part D premium surcharge (income-adjusted)"
     unit = USD
     definition_period = YEAR
-    defined_for = "medicare_enrolled"
+    defined_for = "medicare_part_d_enrolled"
     reference = "https://www.law.cornell.edu/cfr/text/42/423.286"
     documentation = "Annualized Medicare Part D IRMAA surcharge under 42 U.S.C. 1395w-113(a)(7). This is the federally set income-related premium adjustment amount, paid in addition to the beneficiary's underlying Part D plan premium. Annual bracket values come from CMS fact sheets."
 

policyengine_us/variables/gov/hhs/medicare/eligibility/part_d/medicare_part_d_enrolled.py

@@ -0,0 +1,16 @@
+from policyengine_us.model_api import *
+
+
+class medicare_part_d_enrolled(Variable):
+    value_type = bool
+    entity = Person
+    label = "Enrolled in Medicare Part D"
+    documentation = (
+        "Whether the person is enrolled in Medicare Part D. Only a Part D "
+        "eligible individual, one entitled to Part A or enrolled in Part B "
+        "(medicare_enrolled), can enroll."
+    )
+    definition_period = YEAR
+    reference = "https://www.law.cornell.edu/uscode/text/42/1395w-101#a_3_A"
+    defined_for = "medicare_enrolled"
+    adds = ["takes_up_medicare_part_d_if_eligible"]

policyengine_us/variables/gov/hhs/medicare/takes_up_medicare_part_d_if_eligible.py

@@ -0,0 +1,18 @@
+from policyengine_us.model_api import *
+
+
+class takes_up_medicare_part_d_if_eligible(Variable):
+    value_type = bool
+    entity = Person
+    label = "Whether a Medicare enrollee takes up Medicare Part D"
+    documentation = (
+        "Whether a person enrolled in Medicare also enrolls in Part D drug "
+        "coverage: a stand-alone prescription drug plan, a Medicare "
+        "Advantage plan with drug coverage, or an employer group waiver plan. "
+        "People whose drug coverage comes instead from a retiree drug subsidy "
+        "plan, the Federal Employees Health Benefits Program, TRICARE for "
+        "Life or the VA are not enrolled in Part D. Microdata assign this "
+        "input; it defaults to true."
+    )
+    definition_period = YEAR
+    default_value = True