A bill to make permanent the increase in the tax on cigarettes and to provide cost-of-living adjustments in the amount of such tax, and to allocate a portion of the tax receipts to the Medicare Trust Fund.

Amends the Tax Equity and Fiscal Responsibility Act of 1982 to make permanent the increase in the excise tax on cigarettes.

Amends the Internal Revenue Code to provide for cost-of-living adjustments in the rate of such tax.

Amends title XVIII (Medicare) of the Social Security Act to appropriate to the Federal Hospital Insurance Trust Fund the funds raised by such excise tax.