[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2925 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 2925

  To amend the Public Health Service Act to finance the provision of 
     outpatient prescription drug coverage for low-income medicare 
   beneficiaries and to provide stop-loss protection for outpatient 
 prescription drug expenses under qualified medicare prescription drug 
                               coverage.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 23, 1999

    Mr. Bilirakis (for himself, Mr. Peterson of Minnesota, and Mr. 
  Fletcher) introduced the following bill; which was referred to the 
  Committee on Commerce, and in addition to the Committee on Ways and 
 Means, for a period to be subsequently determined by the Speaker, in 
   each case for consideration of such provisions as fall within the 
                jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
  To amend the Public Health Service Act to finance the provision of 
     outpatient prescription drug coverage for low-income medicare 
   beneficiaries and to provide stop-loss protection for outpatient 
 prescription drug expenses under qualified medicare prescription drug 
                               coverage.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Medicare 
Beneficiary Prescription Drug Assistance and Stop-Loss Protection Act 
of 1999''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Promoting prescription drug coverage for medicare 
                            beneficiaries.
   ``TITLE XXVIII--PROMOTING PRESCRIPTION DRUG COVERAGE FOR MEDICARE 
                             BENEFICIARIES

``Part A--Prescription Drug Coverage Assistance for Low-income Medicare 
                             Beneficiaries

``Sec. 2801. Purpose; methods of providing assistance.
``Sec. 2802. Beneficiary eligibility.
``Sec. 2803. Coverage requirements for prescription drug coverage.
``Sec. 2804. Payments to States.
``Sec. 2805. State plan, data collection, records, audits, and reports.
``Sec. 2806. Definition of prescription drug assistance and other 
                            terms.
  ``Part B--Medicare Outpatient Prescription Drug Stop-Loss Protection

``Sec. 2811. Medicare outpatient prescription drug stop-loss 
                            protection.
 ``Part C--Access to Prescription Drug Coverage Under Medigap Policies

``Sec. 2821. Permitting medicare beneficiaries to adjust medigap 
                            coverage.

SEC. 2. PROMOTING PRESCRIPTION DRUG COVERAGE FOR MEDICARE 
              BENEFICIARIES.

    The Public Health Service Act is amended by adding at the end the 
following new title:

   ``TITLE XXVIII--PROMOTING PRESCRIPTION DRUG COVERAGE FOR MEDICARE 
                             BENEFICIARIES

``Part A--Prescription Drug Coverage Assistance for Low-income Medicare 
                             Beneficiaries

``SEC. 2801. PURPOSE; METHODS OF PROVIDING ASSISTANCE.

    ``(a) In General.--The purpose of this part is to provide funds to 
States to enable them, at their option, to establish programs, separate 
from their medicaid plans, that provide assistance to low-income 
medicare beneficiaries in obtaining qualified prescription drug 
coverage using the following methods in a manner consistent with the 
provisions of this part:
            ``(1) Premium subsidy for individuals obtaining coverage 
        through enrollment in a medicare+choice plan or a group health 
        plan.--In the case of a low-income medicare beneficiary 
        enrolled in Medicare+Choice plan or a group health plan that 
        provides qualified prescription drug coverage, payment of the 
        portion of the beneficiary premium (if any) of such plan that 
        is attributable to the cost of furnishing such coverage to such 
        beneficiary.
            ``(2) Other methods.--Any other method for the provision 
        of, or payment for, qualified prescription drug coverage that 
        meets the requirements of this part and that is separate from 
        its medicaid plan.
The Secretary shall provide guidance to States in establishing 
reasonable procedures to determine the portion of the premium described 
in paragraph (1).
     ``(b) Requiring Provision of Assistance Through Medicare+Choice 
Plans or Group Health Plans in Case of Individuals Enrolled in such 
Plans.--If a low-income medicare beneficiary is enrolled in a 
Medicare+Choice plan or in a group health plan that provides qualified 
prescription drug coverage--
            ``(1) a State drug assistance program shall provide for 
        assistance under this part to be provided in the form of a 
        premium subsidy described in subsection (a)(1); and
            ``(2) the beneficiary is deemed to have assigned the right 
        to such subsidy to the organization or sponsor offering such 
        plan.
Nothing in this part shall be construed as providing for any premium 
subsidy described in subsection (a)(1) to the extent such subsidy 
exceeds the amount of the beneficiary premium applicable to qualified 
prescription drug coverage.
    ``(c) State Entitlement.--This part constitutes budget authority in 
advance of appropriations Acts and represents the obligation of the 
Federal Government to provide for the payment to States of amounts 
provided under section 2804.

``SEC. 2802. BENEFICIARY ELIGIBILITY.

    ``(a) In General.--In order for a State to receive payments under 
section 2804 with respect to a State drug assistance program, the 
program must provide prescription drug assistance to each individual 
residing in the State who applies for such assistance and establishes 
that the individual is a low-income medicare beneficiary (as defined in 
subsection (b)). In applying the previous sentence, residency rules 
similar to the residency rules applicable under medicaid plans shall 
apply.
    ``(b) Low-Income Medicare Beneficiary Defined.--
            ``(1) In general.--For purposes of this part with respect 
        to a State drug assistance program, the term `low-income 
        medicare beneficiary' means an individual who--
                    ``(A) is entitled to benefits under part A of title 
                XVIII of the Social Security Act or enrolled under part 
                B of such title, or both, including an individual 
                enrolled in a Medicare+Choice plan under part C of such 
                title;
                    ``(B) is not entitled to medical assistance with 
                respect to prescribed drugs under a medicaid plan;
                    ``(C) is determined by the State under the program 
                to have family income (as determined under section 
                2806(6)) which does not exceed a percentage of the 
                applicable poverty line (as defined in section 673(2) 
                of the Community Services Block Grant Act, including 
                any revision required by such section), for a family of 
                the size involved, specified by the State, which 
                percentage may not be less 120 percent nor more than 
                200 percent; and
                    ``(D) at the option of the State, is determined by 
                the State under the program to have resources (as 
                determined under section 1613 of the Social Security 
                Act for purposes of the supplemental security income 
                program) that do not exceed a level specified under the 
                program, which level shall not be less than the level 
                used by the State under section 1905(p)(1)(C) of such 
                Act.
            ``(2) Exclusion.--Such term does not include an individual 
        who is--
                    ``(A) an inmate of a public institution or a 
                patient in an institution for mental diseases; or
                    ``(B) a member of a family that is eligible for 
                health benefits coverage under a State health benefits 
                plan on the basis of a family member's employment with 
                a public agency in the State if such coverage includes 
                outpatient prescription drug coverage.

``SEC. 2803. COVERAGE REQUIREMENTS FOR PRESCRIPTION DRUG COVERAGE.

    ``(a) Qualified Prescription Drug Coverage Defined.--For purposes 
of this part, the term `qualified prescription drug coverage' means 
prescription drug coverage that--
            ``(1) provides for a scope and quality of coverage that is 
        not less than the scope and quality of coverage described in 
        subsection (b);
            ``(2) imposes any cost-sharing (including enrollment fees, 
        premiums, deductibles, copayments, coinsurance, and similar 
        costs) only consistent with subsection (c); and
            ``(3) meets the requirements of subsection (d) (relating to 
        miscellaneous provisions).
    ``(b) Minimum Scope and Quality of Coverage Required.--
            ``(1) In general.--The scope and quality of coverage 
        described in this subsection is the scope and quality of 
        coverage for outpatient prescription drugs and biologicals 
        equivalent to any of the following:
                    ``(A) Medicaid coverage.--Coverage of outpatient 
                prescribed drugs under the State medicaid plan.
                    ``(B) Comprehensive benchmark coverage.--
                Comprehensive outpatient prescription drug coverage if 
                included in a benchmark benefit package described in 
                paragraph (2).
                    ``(C) Other comprehensive coverage.--Outpatient 
                prescription drug coverage that the Secretary 
                determines, upon application by a State, provides 
                comprehensive outpatient prescription drug coverage, 
                which may be such coverage typically available in large 
                group health plans or in the large group market (as 
                such term is defined in section 2791(e)(3)).
        Nothing in subparagraph (C) shall be construed as authorizing 
        the Secretary to require any particular type of formulary or 
        pricing structure.
            ``(2) Benchmark benefit packages.--The benchmark benefit 
        packages are as follows:
                    ``(A) FEHBP-equivalent health insurance coverage.--
                The standard Blue Cross/Blue Shield preferred provider 
                option service benefit plan, described in and offered 
                under section 8903(1) of title 5, United States Code.
                    ``(B) State employee coverage.--A health benefits 
                coverage plan that is offered and generally available 
                to State employees in the State involved.
                    ``(C) Coverage offered through hmo.--The health 
                insurance coverage plan that--
                            ``(i) is offered by a health maintenance 
                        organization (as defined in section 
                        2791(b)(3)), and
                            ``(ii) has the largest insured commercial, 
                        non-medicaid enrollment of covered lives of 
                        such coverage plans offered by such a health 
maintenance organization in the State involved.
            ``(3) Scope and quality of coverage defined.--In this 
        subsection, the term `scope and quality of coverage' means the 
        extent of prescription drugs covered (including any exclusions 
        or limitations and the application of any formulary, including 
        exceptions to the application of such a formulary) and 
        provisions that assure access to, and the quality of, covered 
        prescription drugs, but not including terms and conditions 
        relating to cost-sharing or other matters described in 
        subsection (c) or (d).
            ``(4) Construction.--Nothing in this subsection shall be 
        construed as requiring qualified prescription drug coverage--
                    ``(A) to provide for the same cost-sharing as that 
                provided under the State medicaid plan or under a 
                benchmark benefit package, respectively; or
                    ``(B) to provide coverage for items or services for 
                which payment is prohibited under this part, 
                notwithstanding that any benchmark benefit or other 
                package includes coverage for such an item or service.
    ``(c) Limitations on Cost-Sharing.--
            ``(1) No premium and no deductible.--
                    ``(A) In general.--There shall be no premium or 
                enrollment fee and no deductible imposed under the 
                program.
                    ``(B) Construction.--Nothing in subparagraph (A) 
                shall be construed as preventing the imposition of a 
                premium, enrollment fee, or similar charge or the 
                application of a deductible for coverage of benefits 
                other than outpatient prescription drugs under a 
                Medicare+Choice plan or group health plan to the extent 
                otherwise permitted under law.
            ``(2) Limitations on copayments and coinsurance.--
                    ``(A) No copayments and coinsurance for lowest 
                income beneficiaries.--There shall be no copayments or 
                coinsurance in the case of a low-income medicare 
                beneficiary whose family income does not exceed 120 
                percent of the applicable poverty line described in 
                section 2802(b)(1)(C).
                    ``(B) Other beneficiaries.--
                            ``(i) In general.--In the case of a low-
                        income medicare beneficiary whose family income 
                        exceeds 120 percent of such poverty line, any 
                        cost-sharing in the form of a copayment or 
                        coinsurance imposed with respect to coverage 
                        under the program does not exceed--
                                    ``(I) a copayment of $5 per 
                                prescription unit (such a unit being 
                                determined consistent with reasonable 
                                rules established under the program 
                                that reflect common industry practice), 
                                or
                                    ``(II) coinsurance of 20 percent,
                        whichever is greater. Any such cost-sharing may 
                        not exceed, in the aggregate in any year, 
                        $1,500 with respect to a low-income medicare 
                        beneficiary.
                            ``(ii) Sliding scale permitted.--In the 
                        case of such beneficiaries, a program may vary 
                        the cost-sharing based on family income, but 
                        only in a manner, consistent with clause (i), 
                        so that the cost sharing increases as family 
                        income increases.
                            ``(iii) Publication.--Any cost-sharing 
                        imposed under this subparagraph shall be 
                        imposed pursuant to a public schedule.
                            ``(iv) Indexing limitation on cost-
                        sharing.--For a year after 2000, the dollar 
                        amount specified in the last sentence of clause 
                        (i) shall be increased by the same percentage 
                        as the percentage increase (if any) in per 
                        capita expenditures for prescription drugs (as 
                        estimated by the Secretary based on the best 
                        data available from the Bureau of Labor 
                        Statistics) between July 1999 and July of the 
                        previous year, except that any such increase 
                        which is not a multiple of $10 shall be rounded 
                        to the nearest multiple of $10.
            ``(3) No balance billing.--The coverage does not permit the 
        imposition of any cost-sharing or balance billing except as 
        permitted under paragraph (2).
    ``(d) Additional Conditions.--The conditions specified in this 
subsection with respect to outpatient prescription drug coverage are as 
follows:
            ``(1) No durational limitation on benefit.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                coverage does not impose any maximum annual, lifetime, 
                or other durational limit on benefits that may be paid 
                with respect to covered prescription drugs.
                    ``(B) Construction.--Subparagraph (A) shall not be 
                construed from preventing the imposition of limits so 
                long as such limits are no lower than the limits 
                imposed under the State's medicaid plan.
            ``(2) Restriction on application of preexisting condition 
        exclusions.--The coverage shall not impose any preexisting 
        condition exclusion (as defined in section 2701(b)(1)(A)) for 
        covered benefits.
    ``(e) No Application of Medicaid or Other Federal Prescription Drug 
Rebate System.--Federal rebate systems (including that under section 
1927 of the Social Security Act) applicable to the purchase of 
prescription drugs shall not apply to the prescription drugs furnished 
under this part.

``SEC. 2804. PAYMENTS TO STATES.

    ``(a) In General.--Subject to the succeeding provisions of this 
section, the Secretary shall pay to each State which has submitted a 
plan pursuant to section 2805(a) an amount for each quarter (beginning 
on or after October 1, 1999) equal to the sum of--
            ``(1) the enhanced FMAP (as defined in section 2105(b) of 
        the Social Security Act) of expenditures in the quarter for 
        prescription drug assistance under the program for low-income 
        medicare beneficiaries whose family income is below 150 percent 
        of the poverty line;
            ``(2) the Federal medical assistance percentage (as defined 
        in section 1905(b) of the Social Security Act) of expenditures 
        in the quarter for prescription drug assistance under the 
        program for low-income medicare beneficiaries not described in 
        paragraph (1); plus
            ``(3) only to the extent permitted consistent with 
        subsection (b)(1), the enhanced FMAP (as defined in section 
        2105(b) of the Social Security Act) of expenditures--
                    ``(A) for outreach activities described in section 
                2805(a)(2) under the program; and
                    ``(B) for other reasonable costs incurred by the 
                State to administer the program.
    ``(b) Limitation on Certain Payments for Certain Expenditures.--
            ``(1) Limitation on administrative expenditures.--Payment 
        shall not be made under subsection (a) for expenditures for 
        items described in subsection (a)(3) for a fiscal year to the 
        extent the payment for expenditures under subsection (a)(3) 
        exceeds 10 percent of the total of all payments made to the 
        State under subsection (a) for such fiscal year (or 20 percent 
        of such total for the first such fiscal year).
            ``(2) Use of non-federal funds for state matching 
        requirement.--Amounts provided by the Federal Government, or 
        services assisted or subsidized to any significant extent by 
        the Federal Government, may not be included in determining the 
        amount of non-Federal contributions required under subsection 
        (a).
            ``(3) Offset of receipts attributable to cost-sharing.--For 
        purposes of subsection (a), the amount of the expenditures 
        under the program shall be reduced by the amount of any cost-
        sharing received by the State.
            ``(4) Prevention of duplicative payments and limitation on 
        payment for abortions.--The provisions of paragraphs (6) and 
        (7) of section 2105(c) of the Social Security Act apply to 
        payments under this section for low-income medicare 
        beneficiaries and prescription drug assistance in the same 
        manner as they apply to payments under section 2105 of such Act 
        for targeted low-income children and child health assistance, 
        and any reference in such paragraph (6) to a private insurer is 
        deemed a reference to the issuer of a medicare supplemental 
        policy (as defined in section 1882(g) of the Social Security 
        Act) or an organization offering a Medicare+Choice plan.
            ``(5) Application of rules relating to provider taxes and 
        donations.--Section 1902(w) of the Social Security Act shall 
        apply to States under this part in the same manner as it 
        applies to a State under title XIX of such Act.
    ``(c) Advance Payment; Retrospective Adjustment.--The Secretary may 
make payments under this section for each quarter on the basis of 
advance estimates of expenditures submitted by the State and such other 
investigation as the Secretary may find necessary, and may reduce or 
increase the payments as necessary to adjust for any overpayment or 
underpayment for prior quarters.

``SEC. 2805. STATE PLAN, DATA COLLECTION, RECORDS, AUDITS, AND REPORTS.

    ``(a) Submission of Plan.--
            ``(1) In general.--A State is eligible for payment under 
        this part if--
                    ``(A) the State has submitted to the Secretary a 
                plan that includes--
                            ``(i) a written document that outlines--
                                    ``(I) how the State intends to use 
                                the funds provided under this part to 
                                provide prescription drug assistance 
                                consistent with the provisions of this 
                                part; and
                                    ``(II) the procedures to be used by 
                                the State to provide for outreach to 
                                low-income medicare beneficiaries; and
                            ``(ii) a certification by the chief 
                        executive officer of the States that the State 
                        drug assistance program operated under such 
                        plan is operated consistent with the specific 
                        requirements of this part; and
                    ``(B) the State is not otherwise ineligible to 
                receive such payment under a specific provision of this 
                part.
            ``(2) Limitation on secretarial authority.--The Secretary 
        may not impose conditions, in addition to those specified in 
        this part, for State plans or State drugs assistance programs 
        under this part.
    ``(b) Data Collection, Records, Audits, and Reports.--As a 
condition for the receipt of funds under this part, a State, in its 
plan under subsection (a), shall provide assurances satisfactory to the 
Secretary that--
            ``(1) the State will collect the data, maintain the 
        records, and furnish the reports to the Secretary, at the times 
        and in the standardized format the Secretary may require, in 
        order to enable the Secretary to monitor State program 
        administration and compliance and to evaluate and compare the 
        effectiveness of State programs under this part;
            ``(2) the State will afford the Secretary access to any 
        records or information relating to the State program under this 
        part for the purposes of review or audit; and
            ``(3) the State will--
                    ``(A) assess the operation of the State program in 
                each fiscal year, including the progress made in 
                covering low-income medicare beneficiaries; and
                    ``(B) report to the Secretary, by January 1 
                following the end of the fiscal year, on the result of 
                the assessment.

``SEC. 2806. DEFINITION OF PRESCRIPTION DRUG ASSISTANCE AND OTHER 
              TERMS.

    ``For purposes of this part:
            ``(1) Prescription drug assistance.--
                    ``(A) In general.--The term `prescription drug 
                assistance' means, subject to subparagraph (B), payment 
                for part or all of the cost of coverage of self-
                administered outpatient prescription drugs and 
                biologicals (including insulin and insulin supplies) 
                for low-income medicare beneficiaries.
                    ``(B) Exclusions.--Such term does not include 
                payment or coverage with respect to--
                            ``(i) items covered under title XVIII of 
                        the Social Security Act;
                            ``(ii) items for which coverage is not 
                        available under a State medicaid plan; or
                            ``(iii) drugs and biologicals furnished for 
                        the purpose of causing, or assisting in 
                        causing, the death, suicide, euthanasia, or 
                        mercy killing of a person.
            ``(2) State drug assistance program; program.--The terms 
        `State drug assistance program' and `program' mean a State drug 
        assistance program receiving funds under this part.
            ``(3) Group health plan.--The term `group health plan' has 
        the meaning given such term in section 2791(a)(1).
            ``(4) Medicaid plan.--The term `medicaid plan' means a plan 
        of a State under title XIX of the Social Security Act and 
        includes such a plan operating under a waiver under such Act.
            ``(5) Medicare+choice plan.--The term `Medicare+Choice 
        plan' means such a plan offered under part C of title XVIII of 
        the Social Security Act.
            ``(6) Family income.--Family income shall be determined in 
        the same manner as it is determined for purposes of section 
        1905(p) of the Social Security Act, except that such 
        determinations shall be made only on an annual basis.

  ``Part B--Medicare Outpatient Prescription Drug Stop-Loss Protection

``SEC. 2811. MEDICARE OUTPATIENT PRESCRIPTION DRUG STOP-LOSS 
              PROTECTION.

    ``(a) In General.--This section establishes a program under which, 
in the case of medicare beneficiaries who are covered under qualified 
medicare prescription drug coverage (as defined in subsection (b)(1)), 
the program provides for payment through carriers or other qualified 
entities to the organization, issuer, or sponsor offering the coverage 
of the cost of providing benefits (provided on or after January 1, 
2000) under the coverage in a year after the beneficiary has incurred 
out-of-pocket costs for outpatient prescription drugs covered under 
such coverage equal to $1,500. For purposes of this section, the term 
`medicare beneficiary' means an individual entitled to benefits under 
part A, B, or C of title XVIII of the Social Security Act.
    ``(b) Qualified Medicare Prescription Drug Coverage Defined.--
            ``(1) In general.--For purposes of this section, the term 
        `qualified medicare prescription drug coverage' means 
        outpatient prescription drug coverage under a plan or policy 
        described in paragraph (2) with respect to a medicare 
        beneficiary if the following requirements are met:
                    ``(A) The amount of any deductible imposed with 
                respect to such coverage for such a beneficiary does 
                not exceed $500 in any year.
                    ``(B) The cost-sharing (in the form of copayment or 
                coinsurance or both) imposed (after the imposition of 
                any such deductible) with respect to such coverage for 
                such a beneficiary does not exceed 50 percent of the 
                payment amount to purchase the covered outpatient 
                prescription drug involved.
                    ``(C) There is a annual limit of not more than 
                $1,500 on the out-of-pocket expenses for covered 
                outpatient prescription drugs under the coverage of 
                such a beneficiary.
                    ``(D) The organization, issuer, or sponsor offering 
                the coverage has entered into an agreement with the 
                carrier or other qualified entity operating the program 
                under subsection (c) under which it agrees to provide 
                for the exchange of such information, in such 
                electronic or other form as the agreement specifies, as 
                the carrier or entity may require in order to verify 
                the eligibility for payment described in subsection 
                (a).
            ``(2) Plans and policies covered.--A plan or policy 
        described in this paragraph is any of the following:
                    ``(A) Medicare+choice plan.--A Medicare+Choice plan 
                under part C of title XVIII of the Social Security Act.
                    ``(B) Medigap policy.--A medicare supplemental 
                policy, as defined in section 1882(g) of the Social 
Security Act (42 U.S.C. 1395ss(g)).
                    ``(C) Group health plan.--A group health plan, as 
                defined in section 607(1) of Employee Retirement Income 
                Security Act of 1974 (29 U.S.C. 1167(1)), but only with 
                respect to a participant or beneficiary who is a 
                medicare beneficiary.
    ``(c) Operation of Program Through Private Entities.--
            ``(1) In general.--The Secretary shall enter into contracts 
        with one or more carriers or other qualified entities to 
        operate the stop-loss program provided under this section.
            ``(2) Limitation on authority.--Nothing in this section 
        shall be construed as authorizing the Secretary, a carrier, or 
        other qualified entity acting under paragraph (1) to deny or 
        limit payment to an entity that is offering qualified medicare 
        prescription drug coverage and has made payments for the cost 
        of providing benefits under such coverage based on the drugs so 
        covered or the amount so paid. The previous sentence shall not 
        be construed as preventing the Secretary, a carrier, or entity 
        from computing costs taking into account discounts or other 
        rebates related to the provision of qualified prescription drug 
        coverage.
    ``(d) Entitlement.--This section constitutes budget authority in 
advance of appropriations Acts and represents the obligation of the 
Federal Government to provide for the payment under this section of 
stop-loss benefits described in subsection (a).
    ``(e) Indexing Dollar Amounts.--For a year after 2000, each of the 
dollar amounts specified in this section shall be increased by the same 
percentage as the percentage increase (if any) in per capita 
expenditures for prescription drugs (as estimated by the Secretary 
based on the best data available from the Bureau of Labor Statistics) 
between July 1999 and July of the previous year, except that any such 
increase which is not a multiple of $10 shall be rounded to the nearest 
multiple of $10.

 ``Part C--Access to Prescription Drug Coverage Under Medigap Policies

``SEC. 2821. PERMITTING MEDICARE BENEFICIARIES TO ADJUST MEDIGAP 
              COVERAGE.

    ``(a) Allowing Medicare Beneficiaries Provided Low-Income 
Assistance To Drop Prescription Drug Medigap Coverage.--
            ``(1) In general.--The issuer of a medicare supplemental 
        policy--
                    ``(A) may not deny or condition the issuance or 
                effectiveness of a medicare supplemental policy that 
                has a benefit package classified as `A', `B', `C', `D', 
                `E', `F', or `G' (under the standards established under 
                subsection (p)(2) of section 1882 of the Social 
                Security Act) and that is offered and is available for 
                issuance to new enrollees by such issuer;
                    ``(B) may not discriminate in the pricing of such 
                policy, because of health status, claims experience, 
                receipt of health care, or medical condition; and
                    ``(C) may not impose an exclusion of benefits based 
                on a pre-existing condition under such policy,
        in the case of an individual described in paragraph (2) who 
        seeks to enroll under the policy not later than 63 days after 
        the date of the termination of enrollment described in such 
        paragraph and who submits evidence of the date of termination 
        or disenrollment along with the application for such medicare 
        supplemental policy.
            ``(2) Individual covered.--An individual described in this 
        paragraph is an individual who--
                    ``(A) is a low-income medicare beneficiary (as 
                defined in section 2802(b)) who is being provided 
                prescription drug assistance under part A; and
                    ``(B) at the time the individual is first provided 
                such assistance, was enrolled and terminates enrollment 
                in a medicare supplemental policy which has a benefit 
                package classified as--
                    ``(I) `H',
                    ``(II) `I', or
                    ``(III) `J',
        under the standards referred to in paragraph (1)(A).
    ``(b) Allowing Medicare Beneficiaries Who Lose Low-Income 
Prescription Drug Assistance To Restore Medigap Coverage That Included 
Prescription Drug Coverage.--
            ``(1) In general.--The issuer of a medicare supplemental 
        policy--
                    ``(A) may not deny or condition the issuance or 
                effectiveness of a medicare supplemental policy 
                described in paragraph (3) that is offered and is 
                available for issuance to new enrollees by such issuer;
                    ``(B) may not discriminate in the pricing of such 
                policy, because of health status, claims experience, 
                receipt of health care, or medical condition; and
                    ``(C) may not impose an exclusion of benefits based 
                on a pre-existing condition under such policy,
        in the case of an individual described in paragraph (2) who 
        seeks to enroll under the policy not later than 63 days after 
        the date of the termination of prescription drug assistance 
        described in such paragraph and who submits evidence of the 
        date of termination along with the application for such 
        medicare supplemental policy.
            ``(2) Individual covered.--An individual described in this 
        paragraph is an individual--
                    ``(A) who was described in paragraph (4)(B) of 
                section 1882(s) of the Social Security Act and changed 
                enrollment under paragraph (4)(A); and
                    ``(B) whose prescription drug assistance under part 
                A of this title is terminated.
            ``(3) Policy described.--A medicare supplemental policy 
        described in this paragraph is the medicare supplemental policy 
        described in paragraph (4)(B) of section 1882(s) of the Social 
        Security Act from which the individual discontinued enrollment 
        under paragraph (4)(A) of such section.
    ``(c) Guaranteed Issue in Another Case.--
            ``(1) In general.--The issuer of a medicare supplemental 
        policy--
                    ``(A) may not deny or condition the issuance or 
                effectiveness of a medicare supplemental policy which 
                has a benefit package classified as--
                            ``(i) `H',
                            ``(ii) `I', or
                            ``(iii) `J',
                under the standards referred to in subsection (a)(1)(A) 
                that is offered and is available for issuance to new 
                enrollees by such issuer;
                    ``(B) may not discriminate in the pricing of such 
                policy, because of health status, claims experience, 
                receipt of health care, or medical condition; and
                    ``(C) subject to paragraph (2), may not impose an 
                exclusion of benefits based on a pre-existing condition 
                under such policy;
        in the case of an individual who is 65 years of age or older 
        and who seeks to enroll under the policy during a 6-month open 
        enrollment period specified by the Secretary.
            ``(2) The provisions of subparagraphs (B) and (C) of 
        paragraph (1) of section 1882(s) of the Social Security Act 
        shall apply with respect to paragraph (1) in the same manner as 
        they apply with respect to paragraph (1)(A) of such section.
    ``(d) Enforcement.--The provisions of subsections (a) through (c) 
shall be enforced as though they were included in section 1882(s) of 
the Social Security Act.
    ``(e) Definitions.--For purposes of this section, the term 
`medicare supplemental policy' has the meaning given such term in 
section 1882(g) of the Social Security Act.''.
                                 <all>