Home > 106th Congressional Bills > H.R. 4680 (rh) To amend title XVIII of the Social Security Act to provide for a voluntary program for prescription drug coverage under the Medicare Program, to modernize the Medicare Program, and for other purposes. [Reported in House] ...H.R. 4680 (rh) To amend title XVIII of the Social Security Act to provide for a voluntary program for prescription drug coverage under the Medicare Program, to modernize the Medicare Program, and for other purposes. [Reported in House] ...
annual comparative information, maintenance of a toll-free
hotline, and the use of non-Federal entities.
``(3) Coordination of elections through filing with a
Medicare+Choice organization or a PDP sponsor, in the manner
described in (and in coordination with) section 1851(c)(2).
``(c) Medicare+Choice Enrollee In Plan Offering Prescription Drug
Coverage May Only Obtain Benefits Through the Plan.--An individual who
is enrolled under a Medicare+Choice plan that offers qualified
prescription drug coverage may only elect to receive qualified
prescription drug coverage under this part through such plan.
``(d) Assuring Access to a Choice of Qualified Prescription Drug
Coverage.--
``(1) Choice of at least two plans in each area.--
``(A) In general.--The Medicare Benefits
Administrator shall assure that each individual who is
enrolled under part B and who is residing in an area
has available, consistent with subparagraph (B), a
choice of enrollment in at least two qualifying plans
(as defined in paragraph (5)) in the area in which the
individual resides, at least one of which is a
prescription drug plan.
``(B) Requirement for different plan sponsors.--The
requirement in subparagraph (A) is not satisfied with
respect to an area if only one PDP sponsor or
Medicare+Choice organization offers all the qualifying
plans in the area.
``(2) Guaranteeing access to coverage.--In order to assure
access under paragraph (1) and consistent with paragraph (3),
the Medicare Benefits Administrator may provide financial
incentives (including partial underwriting of risk) for a PDP
sponsor to expand the service area under an existing
prescription drug plan to adjoining or additional areas or to
establish such a plan (including offering such a plan on a
regional or nationwide basis), but only so long as (and to the
extent) necessary to assure the access guaranteed under
paragraph (1).
``(3) Limitation on authority.--In exercising authority
under this subsection, the Medicare Benefits Administrator--
``(A) shall not provide for the full underwriting
of financial risk for any PDP sponsor;
``(B) shall not provide for any underwriting of
financial risk for a public PDP sponsor with respect to
the offering of a nationwide prescription drug plan;
and
``(C) shall seek to maximize the assumption of
financial risk by PDP sponsors or Medicare+Choice
organizations.
``(4) Reports.--The Medicare Benefits Administrator shall,
in each annual report to Congress under section 1807(f),
include information on the exercise of authority under this
subsection. The Administrator also shall include such
recommendations as may be appropriate to minimize the exercise
of such authority, including minimizing the assumption of
financial risk.
``(5) Qualifying plan defined.--For purposes of this
subsection, the term `qualifying plan' means a prescription
drug plan or a Medicare+Choice plan that includes qualified
prescription drug coverage.
``SEC. 1860F. PREMIUMS.
``(a) Submission of Premiums and Related Information.--
``(1) In general.--Each PDP sponsor shall submit to the
Medicare Benefits Administrator information of the type
described in paragraph (2) in the same manner as information is
submitted by a Medicare+Choice organization under section
1854(a)(1).
``(2) Type of information.--The information described in
this paragraph is the following:
``(A) Information on the qualified prescription
drug coverage to be provided.
``(B) Information on the actuarial value of the
coverage.
``(C) Information on the monthly premium to be
charged for the coverage, including an actuarial
certification of--
``(i) the actuarial basis for such premium;
``(ii) the portion of such premium
attributable to benefits in excess of standard
coverage; and
``(iii) the reduction in such premium
resulting from the reinsurance subsidy payments
provided under section 1860H.
``(D) Such other information as the Medicare
Benefits Administrator may require to carry out this
part.
``(3) Review.--The Medicare Benefits Administrator shall
review the information filed under paragraph (2) for the
purpose of conducting negotiations under section 1860D(b)(2).
``(b) Uniform Premium.--The premium for a prescription drug plan
charged under this section may not vary among individuals enrolled in
the plan in the same service area, except as is permitted under section
1860A(c)(2)(B) (relating to late enrollment penalties).
``(c) Terms and Conditions for Imposing Premiums.--The provisions
of section 1854(d) shall apply under this part in the same manner as
they apply under part C, and, for this purpose, the reference in such
section to section 1851(g)(3)(B)(i) is deemed a reference to section
1860A(d)(3)(B) (relating to failure to pay premiums required under this
part).
``(d) Acceptance of Reference Premium as Full Premium if No
Standard (or Equivalent) Coverage in an Area.--
``(1) In general.--If there is no standard prescription
drug coverage (as defined in paragraph (2)) offered in an area,
in the case of an individual who is eligible for a premium
subsidy under section 1860G and resides in the area, the PDP
sponsor of any prescription drug plan offered in the area (and
any Medicare+Choice organization that offers qualified
prescription drug coverage in the area) shall accept the
reference premium under section 1860G(b)(2) as payment in full
for the premium charge for qualified prescription drug
coverage.
``(2) Standard prescription drug coverage defined.--For
purposes of this subsection, the term `standard prescription
drug coverage' means qualified prescription drug coverage that
is standard coverage or that has an actuarial value equivalent
to the actuarial value for standard coverage.
``SEC. 1860G. PREMIUM AND COST-SHARING SUBSIDIES FOR LOW-INCOME
INDIVIDUALS.
``(a) In General.--
``(1) Full premium subsidy and reduction of cost-sharing
for individuals with income below 135 percent of federal
poverty level.--In the case of a subsidy eligible individual
(as defined in paragraph (3)) who is determined to have income
that does not exceed 135 percent of the Federal poverty level,
the individual is entitled under this section--
``(A) to a premium subsidy equal to 100 percent of
the amount described in subsection (b)(1); and
``(B) subject to subsection (c), to the
substitution for the beneficiary cost-sharing described
in paragraphs (1) and (2) of section 1860B(b) (up to
the initial coverage limit specified in paragraph (3)
of such section) of amounts that are nominal.
``(2) Sliding scale premium subsidy for individuals with
income above 135, but below 150 percent, of federal poverty
level.--In the case of a subsidy eligible individual who is
determined to have income that exceeds 135 percent, but does
not exceed 150 percent, of the Federal poverty level, the
individual is entitled under this section to a premium subsidy
determined on a linear sliding scale ranging from 100 percent
of the amount described in subsection (b)(1) for individuals
with incomes at 135 percent of such level to 0 percent of such
amount for individuals with incomes at 150 percent of such
level.
``(3) Determination of eligibility.--
``(A) Subsidy eligible individual defined.--For
purposes of this section, subject to subparagraph (D),
the term `subsidy eligible individual' means an
individual who--
``(i) is eligible to elect, and has
elected, to obtain qualified prescription drug
coverage under this part;
``(ii) has income below 150 percent of the
Federal poverty line; and
``(iii) meets the resources requirement
described in section 1905(p)(1)(C).
``(B) Determinations.--The determination of whether
an individual residing in a State is a subsidy eligible
individual and the amount of such individual's income
shall be determined under the State medicaid plan for
the State under section 1935(a). In the case of a State
that does not operate such a medicaid plan (either
under title XIX or under a statewide waiver granted
under section 1115), such determination shall be made
under arrangements made by the Medicare Benefits
Administrator.
``(C) Income determinations.--For purposes of
applying this section--
``(i) income shall be determined in the
manner described in section 1905(p)(1)(B); and
``(ii) the term `Federal poverty line'
means the official poverty line (as defined by
the Office of Management and Budget, and
revised annually in accordance with section
673(2) of the Omnibus Budget Reconciliation Act
of 1981) applicable to a family of the size
involved.
``(D) Treatment of territorial residents.--In the
case of an individual who is not a resident of the 50
States or the District of Columbia, the individual is
not eligible to be a subsidy eligible individual but
may be eligible for financial assistance with
prescription drug expenses under section 1935(e).
``(b) Premium Subsidy Amount.--
``(1) In general.--The premium subsidy amount described in
this subsection for an individual residing in an area is the
reference premium (as defined in paragraph (2)) for qualified
prescription drug coverage offered by the prescription drug
plan or the Medicare+Choice plan in which the individual is
enrolled.
``(2) Reference premium defined.--For purposes of this
subsection, the term `reference premium' means, with respect to
qualified prescription drug coverage offered under--
``(A) a prescription drug plan that--
``(i) provides standard coverage (or
alternative prescription drug coverage the
actuarial value is equivalent to that of
standard coverage), the premium imposed for
enrollment under the plan under this part
(determined without regard to any subsidy under
this section or any late enrollment penalty
under section 1860A(c)(2)(B)); or
``(ii) provides alternative prescription
drug coverage the actuarial value of which is
greater than that of standard coverage, the
premium described in clause (i) multiplied by
the ratio of (I) the actuarial value of
standard coverage, to (II) the actuarial value
of the alternative coverage; or
``(B) a Medicare+Choice plan, the standard premium
computed under section 1851(j)(5)(A)(iii), determined
without regard to any reduction effected under section
1851(j)(5)(B).
``(c) Rules in Applying Cost-Sharing Subsidies.--
``(1) In general.--In applying subsection (a)(1)(B)--
``(A) the maximum amount of subsidy that may be
provided with respect to an enrollee for a year may not
exceed 95 percent of the maximum cost-sharing described
in such subsection that may be incurred for standard
coverage;
``(B) the Medicare Benefits Administrator shall
determine what is `nominal' taking into account the
rules applied under section 1916(a)(3); and
``(C) nothing in this part shall be construed as
preventing a plan or provider from waiving or reducing
the amount of cost-sharing otherwise applicable.
``(2) Limitation on charges.--In the case of an individual
receiving cost-sharing subsidies under subsection (a)(1)(B),
the PDP sponsor may not charge more than a nominal amount in
cases in which the cost-sharing subsidy is provided under such
subsection.
``(d) Administration of Subsidy Program.--The Medicare Benefits
Administrator shall provide a process whereby, in the case of an
individual who is determined to be a subsidy eligible individual and
who is enrolled in prescription drug plan or is enrolled in a
Medicare+Choice plan under which qualified prescription drug coverage
is provided--
``(1) the Administrator provides for a notification of the
PDP sponsor or Medicare+Choice organization involved that the
individual is eligible for a subsidy and the amount of the
subsidy under subsection (a);
``(2) the sponsor or organization involved reduces the
premiums or cost-sharing otherwise imposed by the amount of the
applicable subsidy and submits to the Administrator information
on the amount of such reduction; and
``(3) the Administrator periodically and on a timely basis
reimburses the sponsor or organization for the amount of such
reductions.
The reimbursement under paragraph (3) with respect to cost-sharing
subsidies may be computed on a capitated basis, taking into account the
actuarial value of the subsidies and with appropriate adjustments to
reflect differences in the risks actually involved.
``(e) Relation to Medicaid Program.--
``(1) In general.--For provisions providing for eligibility
determinations, and additional financing, under the medicaid
program, see section 1935.
``(2) Medicaid providing wrap around benefits.--The
coverage provided under this part is primary payor to benefits
for prescribed drugs provided under the medicaid program under
title XIX.
``SEC. 1860H. SUBSIDIES FOR ALL MEDICARE BENEFICIARIES THROUGH
REINSURANCE FOR QUALIFIED PRESCRIPTION DRUG COVERAGE.
``(a) Reinsurance Subsidy Payment.--In order to reduce premium
levels applicable to qualified prescription drug coverage for all
medicare beneficiaries, to reduce adverse selection among prescription
drug plans and Medicare+Choice plans that provide qualified
prescription drug coverage, and to promote the participation of PDP
sponsors under this part, the Medicare Benefits Administrator shall
provide in accordance with this section for payment to a qualifying
entity (as defined in subsection (b)) of the reinsurance payment amount
(as defined in subsection (c)) for excess costs incurred in providing
qualified prescription drug coverage--
``(1) for individuals enrolled with a prescription drug
plan under this part;
``(2) for individuals enrolled with a Medicare+Choice plan
that provides qualified prescription drug coverage under part
C; and
``(3) for medicare primary individuals (described in
subsection (f)(3)(D)) who are enrolled in a qualified retiree
prescription drug plan.
This section constitutes budget authority in advance of appropriations
Acts and represents the obligation of the Administrator to provide for
the payment of amounts provided under this section.
``(b) Qualifying Entity Defined.--For purposes of this section, the
term `qualifying entity' means any of the following that has entered
into an agreement with the Administrator to provide the Administrator
with such information as may be required to carry out this section:
``(1) A PDP sponsor offering a prescription drug plan under
this part.
``(2) A Medicare+Choice organization that provides
qualified prescription drug coverage under a Medicare+Choice
plan under part C.
``(3) The sponsor of a qualified retiree prescription drug
plan (as defined in subsection (f)).
``(c) Reinsurance Payment Amount.--
``(1) In general.--Subject to subsection (d)(2) and
paragraph (4), the reinsurance payment amount under this
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