This bill alters and establishes several programs relating to health insurance and prescription drugs.

Specifically, the bill requires the Department of Health and Human Services (HHS) to establish a public health insurance option through health insurance exchanges. The bill sets forth corresponding implementing provisions, including criteria for payment rates and provider participation. (For example, initial payment rates for providers and services must be set at the same rates as under Medicare; HHS may subsequently alter payment rates in accordance with a specified administrative process.)

The bill also expands eligibility for (1) the health insurance premium tax credit, and (2) repayment limitations for excess advance payments of the premium tax credit.

Additionally, the bill requires drug manufacturers, as a condition of participation in the Medicare prescription drug benefit, to issue rebates to the Centers for Medicare & Medicaid Services (CMS) for drugs dispensed to certain low-income enrollees.

The bill also requires the CMS to (1) negotiate with pharmaceutical companies regarding prices for drugs covered under the Medicare prescription drug benefit, and (2) serve as a prescription drug plan sponsor for a nationwide prescription drug plan under Medicare.