[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1905 Introduced in House (IH)]
107th CONGRESS
1st Session
H. R. 1905
To amend title XVIII of the Social Security Act to assure access of
Medicare beneficiaries to prescription drug coverage through the NICE
drug benefit program.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 17, 2001
Mr. Maloney of Connecticut introduced the following bill; which was
referred to the Committee on Ways and Means, and in addition to the
Committee on Energy and Commerce, 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 title XVIII of the Social Security Act to assure access of
Medicare beneficiaries to prescription drug coverage through the NICE
drug benefit program.
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 ``New Insurance
Coverage Equity (NICE) Act of 2001''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. NICE drug benefit program.
``Part D--NICE Drug Benefit Program
``Sec. 1860A. Establishment of NICE drug benefit program.
``Sec. 1860B. Requirements for offering NICE drug benefit
coverage.
``Sec. 1860C. Enrollment process for NICE drug benefit
coverage.
``Sec. 1860D. Financial assistance to obtain NICE prescription
drug coverage
``Sec. 1860E. NICE Board.
``Sec. 1860F. NICE Trust Fund.
Sec. 3. Conforming changes to medigap.
Sec. 4. Provision of information on NICE drug benefit program under
health insurance information, counseling,
and assistance grants.
SEC. 2. NICE DRUG BENEFIT PROGRAM.
Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) is
amended by redesignating part D as part E and by inserting after part C
the following new part:
``Part D--NICE Drug Benefit Program
``establishment of nice drug benefit program
``Sec. 1860A. (a) In General.--Under this part, the NICE Board
(established under section 1860E) shall provide for a NICE drug benefit
program under which--
``(1) all eligible medicare beneficiaries shall be provided
access to NICE prescription drug coverage (meeting the
conditions of section 1860B) through either enrollment in a
Medicare+Choice plan, enrollment in a NICE medicare
supplemental policy, or coverage under a group health plan; and
``(2) there is financial assistance provided under section
1860D for beneficiaries who voluntarily obtain such coverage,
with such assistance varying depending upon the income of such
beneficiaries.
``(b) Voluntary Nature of Program for Entities and Beneficiaries.--
Nothing in this part shall be construed as requiring--
``(1) an eligible medicare beneficiary to obtain coverage
under a plan or policy that provides NICE prescription drug
coverage;
``(2) a Medicare+Choice organization to offer a
Medicare+Choice plan that provides NICE prescription drug
coverage; or
``(3) an issuer of a medicare supplemental policy to issue
a NICE medicare supplemental policy.
``(c) Providing Information to Beneficiaries.--
``(1) In general.--The NICE Board shall broadly disseminate
information to eligible medicare beneficiaries on the NICE drug
benefit program under this part, including information on the
sanctions for delayed enrollment under section 1860D(e).
``(2) Similar to medicare+choice activities.--Such
activities shall be similar to the activities performed under
section 1851(d) (including the approval of policy marketing
materials).
``(3) Arrangements.--The NICE Board shall, in cooperation
with the Secretary, enter into such arrangements as may be
appropriate to disseminate widely to eligible medicare
beneficiaries information about the NICE drug benefit program
in connection with materials distributed by the Secretary to
medicare beneficiaries, including in the medicare handbook
under section 1804 and in materials distributed under section
1851(d).
``(d) Eligible Medicare Beneficiary Defined.--For purposes of this
part, the term `eligible medicare beneficiary' means an individual who
is entitled to benefits under part A and enrolled under part B.
``requirements for offering nice drug benefit coverage
``Sec. 1860B. (a) Requirement for Approval of NAIC Model
Revisions.--
``(1) In general.--
``(A) Condition for offering nice medicare
supplemental policy.--On or after the effective date of
this provision, it is unlawful to issue or sell a
medicare supplemental policy (as defined in section
1882(g)) that provides coverage of outpatient
prescription drugs in a State unless--
``(i) the State has adopted the National
Association of Insurance Commissioners
revisions under section 1882(v)(1)(A) that have
been approved by the NICE Board under this
section; and
``(ii) the coverage is offered consistent
with section 1860C.
The penalties described in clause (ii) of section
1882(d)(3)(A) shall apply to whoever violates this
subparagraph in the same manner as they apply to
whoever violates such section.
``(B) Condition for receipt of nice financial
assistance.--No payment of financial assistance with
respect to coverage of an eligible medicare beneficiary
under NICE prescription drug coverage which is offered
either as a NICE medicare supplemental policy, as part
of the benefits under a Medicare+Choice plan, or as
part of the benefits under a group health plan, shall
be made unless--
``(i) an application with respect to such
coverage has been approved by the NICE Board
under this section; and
``(ii) in the case of a NICE medicare
supplemental policy or a Medicare+Choice plan,
the coverage is offered consistent with section
1860C.
``(2) Establishment of application process.--
``(A) In general.--The NICE Board shall establish--
``(i) procedures regarding the information
to be included in applications under this
section and for the time and manner in which
such applications should be submitted;
``(ii) conditions (consistent with this
part) for the approval of such applications;
and
``(iii) the period (in no case less than 1
year) for which approval of such an application
is valid.
``(B) Disapproval.--The NICE Board may disapprove
(or revoke the approval) of such an application if the
Board finds that, in the case of a NICE medicare
supplemental policy or Medicare+Choice plan, that the
entity offering the NICE prescription drug coverage is
purposefully engaged in activities intended to result
in favorable selection of those eligible medicare
beneficiaries obtaining coverage through the policy or
plan.
``(b) NICE Prescription Drug Coverage Defined.--For purposes of
this title, the term `NICE prescription drug coverage' means coverage
of outpatient prescription drugs that the NICE Board determines meets
the following requirements:
``(1) Benefit level.--The benefits provided--
``(A) are limited to outpatient prescription drugs;
``(B) include at least the threshold benefits
specified under subsection (c); and
``(C) do not include benefits for prescription
drugs for which benefits are otherwise available
(directly or when furnished as part of, or as an
incident to, another item or service) under part A or
B.
``(2) Accessibility.--The benefits are accessible and
convenient to all eligible medicare beneficiaries who have such
coverage and provide for access on a timely basis to new
outpatient prescription drugs and they become available.
``(3) No pre-existing condition exclusions.--There are no
pre-existing condition exclusions or similar exclusions applied
with respect to the coverage.
``(4) Limits on formularies.--If the coverage uses a
formulary, the formulary meets the requirements of subsection
(d).
``(c) Threshold Benefit Level.--
``(1) In general.--The NICE Board shall request the
National Association of Insurance Commissioners to revise the
model standards for medicare supplemental policies pursuant to
section 1882(v) for the purpose of--
``(A) defining the term `outpatient prescription
drugs'; and
``(B) specifying a threshold level of benefits for
NICE prescription drug coverage.
``(2) Considerations.--
``(A) Definition.--In establishing a definition
under paragraph (1)(A), the Board shall request that
the National Association of Insurance Commissioners
take into account the definition of covered outpatient
drugs under section 1927(k)(2) (which includes
biological products and insulin).
``(B) Threshold.--In specifying the threshold level
under paragraph (1)(B), the Board shall request that
the National Association of Insurance Commissioners--
``(i) take into account the level of such
coverage (including deductibles and other cost-
sharing) applied under health plans offered
under the Federal Employees Health Benefits
Program (under chapter 89 of title 5, United
States Code) and under other large group health
plans; and
``(ii) permit (if determined appropriate)
optional coverage of drugs (except for agents
used to promote smoking cessation) for which
coverage may be excluded or restricted under
section 1927(d)(2).
``(3) Construction.--Nothing in this part shall be
construed as preventing NICE prescription drug coverage from
providing benefits for outpatient prescription drugs in excess
of the threshold specified under this subsection.
``(d) Formulary Requirements.--
``(1) In general.--A formulary meets the requirements of
this subsection only if--
``(A) such formulary is based on the medical needs
of eligible medicare beneficiaries;
``(B) the entity offering the coverage has in place
an appeals process for any eligible medicare
beneficiary to receive any medically necessary
outpatient prescription drug that is not on the
formulary;
``(C) such procedures do not impose a significant
financial burden on an eligible medicare beneficiary or
delay the provision of medically necessary outpatient
prescription drugs to such a beneficiary; and
``(D) the entity offering the coverage provides
notification to enrollees of any change in the
formulary and such notification is provided at least 60
days prior to such change.
``(2) Appeal process.--The appeals process established
under paragraph (1)(B) shall provide for at least a level of
protection that is similar to or better than the level of
protection provided with respect to benefits under
Medicare+Choice plans under
part C.
``(e) Use of Cost Containment Mechanisms.--Nothing in this part
shall be construed as preventing an entity offering NICE prescription
drug coverage from using reasonable cost containment methods, such as
formularies, mail order services, and generic drug substitution,
consistent with the specific requirements of this part and applicable
law.
``enrollment process for nice drug benefit coverage
``Sec. 1860C. (a) Enrollment Process.--The NICE Board shall
establish procedures, consistent with this section, through which an
eligible medicare beneficiary may voluntarily elect whether or not to
enroll, disenroll, and change enrollment in a NICE medicare
supplemental policy or in a Medicare+Choice plan that includes NICE
prescription drug coverage.
``(b) Considerations.--In establishing such procedures, the NICE
Board shall--
``(1) use rules similar to the rules for enrollment,
disenrollment, and changes in enrollment in a Medicare+Choice
plan under section 1851 (including annual open enrollment
periods and guaranteed issue during any enrollment period);
``(2) permit special enrollment periods in cases in which
an eligible medicare beneficiary, who is enrolled under a
Medicare+Choice plan or group health plan that provides NICE
prescription drug coverage--
``(A) loses such coverage under such a plan; or
``(B) experiences a significant adverse income
level change (as defined by the NICE Board) which
changes the level of financial assistance available
under section 1860D; and
``(3) provide for coordination with the Secretary with
respect to such enrollment, disenrollment, and changes in
enrollment under part C.
``financial assistance to obtain nice prescription drug coverage
``Sec. 1860D. (a) In General.--The NICE Board shall provide
financial assistance, in accordance with this section, with respect to
eligible medicare beneficiaries who have NICE prescription drug
coverage through enrollment in a NICE medicare supplemental policy, in
a Medicare+Choice plan that includes such coverage, or in a group
health plan that includes such coverage.
``(b) Amount of Assistance.--
``(1) In general.--Subject to subsections (e) and (f) and
paragraph (2), the amount of financial assistance with respect
to an eligible medicare beneficiary is equal to the following
percentage of the applicable cost (as defined in subsection
(g)(1)) of the NICE prescription drug coverage:
``(A) 100 percent if income below 150 percent of
poverty.--In the case of an eligible medicare
beneficiary who applies for enhanced financial
assistance under subsection (c) and whose income (as
verified under such subsection) does not exceed 150
percent of the poverty line, the percentage is 100
percent.
``(B) Other percent if income between 150 and 175
percent of poverty.--In the case of an eligible
medicare beneficiary who applies for enhanced financial
assistance under subsection (c) and whose income (as
verified under such subsection) is greater than 150
percent, but does not exceed 175 percent, of the
poverty line, the NICE Board shall specify the
percentage consistent with the following rules:
``(i) Range.--The percentage may not exceed
100 percent nor be less than the percentage
specified under subparagraph (C).
``(ii) Sliding scale.--The percentage may
not be higher for eligible medicare
beneficiaries whose income is higher.
``(iii) Within available funds.--The
percentage is established in a manner that is
consistent with the amount of funds available
for financial assistance under this section.
``(C) 25 percent for other beneficiaries.--In the
case of any other eligible medicare beneficiary, the
percentage is 25 percent.
``(2) Limitation in case of coverage provided through a
medicare+choice plan.--In the case of financial assistance
provided under this section with respect to NICE prescription
drug coverage provided through a Medicare+Choice plan, the
amount of the financial assistance may not exceed the amount of
the portion of the premium charged for enrollment in the plan
that is related to outpatient prescription drugs.
``(c) Application for Enhanced Financial Assistance.--
``(1) In general.--The NICE Board shall establish
procedures under which an individual who desires enhanced
financial assistance under this section may voluntarily apply
for an income determination.
``(2) Income verification.--
``(A) In general.--Under the procedures established
under paragraph (1), if an individual voluntarily
applies for an income determination under this
subsection, the individual is deemed to have consented
to the NICE Board seeking and using income-related
information from other Government agencies in order to
verify the individual's income.
``(B) Restriction on use of information.--
Information obtained under subparagraph (A) may be used
by officers and employees of the NICE Board only for
the purposes of, and to the extent necessary in,
carrying out their responsibilities under this part.
``(3) Periodic redeterminations.--Such income
determinations shall be valid for a period (of not less than 1
year) specified by the NICE Board.
``(d) Form of Assistance.--
``(1) In general.--Financial assistance under this section
shall be provided in the form of a payment to the issuer of the
NICE medicare supplemental policy involved, the Medicare+Choice
organization offering the Medicare+Choice plan involved, or the
sponsor of the group health plan involved, of the amount of the
subsidy. Such payment shall be in a manner and time provided
for by the NICE Board.
``(2) Additional requirement.--No financial assistance
shall be made available with respect to NICE prescription drug
coverage provided by an entity to an eligible medicare
beneficiary unless the entity provides assurances satisfactory
to the NICE Board that the entity shall reduce the amount
otherwise charged the beneficiary for such coverage by an
amount equal to the amount of such assistance.
``(3) Special rule where no or low premium charged.--The
NICE Board shall establish appropriate procedures to assure
that eligible medicare beneficiaries who obtain NICE
prescription drug coverage through enrollment in a group health
plan which does not impose a premium or imposes a premium that
is less than the amount of the financial assistance otherwise
provided, are provided the benefit of some of such financial
assistance.
``(e) Late Enrollment Penalty.--
``(1) In general.--Subject to paragraph (2), the NICE Board
shall establish procedures for reducing the amount of financial
assistance provided under this section on behalf of an eligible
medicare beneficiary if the beneficiary fails to obtain and
maintain NICE prescription drug coverage during periods in
which the beneficiary is eligible to obtain such coverage. Such
procedures may be similar to the part B late enrollment penalty
provisions under section 1839(b) and shall not take into
account periods before the first period in which financial
assistance is made available under this section.
``(2) Exception.--The late enrollment procedures
established pursuant to paragraph (1) shall not apply to an
eligible medicare beneficiary who is enrolled under
Medicare+Choice plan or a group health plan that provides
outpatient prescription drug coverage and the plan terminates
or ceases to provide such coverage to the beneficiary, but only
if--
``(A) the beneficiary seeks to enroll under a plan
or policy that offers NICE prescription drug coverage
at the next opportunity that is available to the
beneficiary after the effective date of the termination
of such coverage; and
``(B) submits evidence of the effective date of the
termination of such coverage.
``(f) Adjustment of Financial Assistance if Insufficient Funding.--
``(1) Limitation of assistance to funds available.--In no
case shall the amount of financial assistance provided under
this section exceed the amount of funds available for such
assistance under the NICE Trust Fund.
``(2) Required adjustment.--If the NICE Board determines
under section 1860E(b)(3)(C) that the amount in the NICE Trust
Fund in the next year will be insufficient to cover the costs
of providing financial assistance under this section in such
year--
``(A) the NICE Board shall first reduce the
percentage specified in subsection (b)(3) to such lower
percentage (but not below 10 percent) as may be
required, and to adjust the percentage specified under
subsection (b)(2) to reflect such reduction;
``(B) if such percentage reductions are not
sufficient to reduce the costs to comply with paragraph
(1), the NICE Board shall next reduce the income
thresholds (as a percentage of the poverty line) under
subsection (b) as may be further required; and
``(C) if such previous reductions are still not
sufficient to reduce the costs to comply with paragraph
(1), the NICE Board shall immediately report to
Congress and suspend the provision of financial
assistance under this section during such year.
``(g) Definitions.--For purposes of this section:
``(1) Applicable cost.--The term `applicable cost' means,
with respect to NICE prescription drug coverage provided
under--
``(A) a NICE medicare supplemental policy, is the
premium charged for the policy;
``(B) a Medicare+Choice plan, is the actuarial
value of the portion of the adjusted community rate for
the plan that is related to providing such coverage, as
determined by the NICE Board in consultation with the
Secretary; or
``(C) a group health plan, is the actuarial value
of the portion of the applicable premium for the plan
that is related to providing such coverage, as
determined by the NICE Board taking into account the
applicable premium for such plan (as defined in section
604(1) of the Employee Retirement Income Security Act
of 1974).
``(2) Poverty line.--The term `poverty line' means the
income 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.
``nice board
``Sec. 1860E. (a) Establishment.--There is established within the
Department of Health and Human Services a New Insurance Coverage Equity
Office, which shall be--
``(1) outside of the Health Care Financing Administration;
and
``(2) run by a board to be known as the NICE Board.
``(b) Duties.--
``(1) In general.--The NICE Board shall administer the NICE
drug benefit program under this part.
``(2) Ongoing studies.--The NICE Board shall conduct
ongoing studies of the following issues:
``(A) The administration of this part.
``(B) The provision of information about the
program under the health insurance information,
counseling, and assistance grants under section 4360 of
the Omnibus Budget Reconciliation Act of 1990.
``(C) Ways in which drug utilization can be used to
provide better overall care for eligible medicare
beneficiaries.
``(D) Savings and potential savings in Federal
health care programs which may occur, or can be
attributed to, eligible medicare beneficiary access to,
and utilization of, outpatient prescription drugs.
``(E) Trends in premium increases and factors that
contribute to changes in premiums.
``(F) Integration of the NICE drug benefit program
into a reformed medicare program.
``(G) The ability of eligible medicare
beneficiaries to afford NICE prescription drug
coverage.
``(H) The impact of the program on the prescription
drug benefits offered under Medicare+Choice plans and
group health plans.
``(I) The appropriateness of the levels of
financial assistance provided in the case of eligible
medicare beneficiaries who obtain assistance through
NICE prescription drug coverage provided under
Medicare+Choice plans or group health plans.
``(3) Annual report.--
``(A) In general.--Not later than June 1 of each
year (beginning with 2003), the NICE Board shall submit
an annual report to Congress on the program under this
part.
``(B) Information on studies.--Such report shall
include a detailed statement on the issues studied
under paragraph (2).
``(C) Detailed financial projections and required
adjustments in financial assistance.--Such report shall
include--
``(i) the report on the financial status of
the NICE Trust Fund under section 1860F; and
``(ii) a statement if, based on such
status, a reduction in financial assistance for
the subsequent year is required under section
1860D(f) and, if so, the manner in which such
reductions will be made.
Such report may include recommendations regarding
increases in financial assistance that should be made
in a subsequent year, to the extent they may be made
consistent with section 1860D(f)(1).
``(D) Recommendations.--Such report shall include
such other recommendations for legislation and
administrative actions as the NICE Board considers
appropriate.
``(4) Study and report regarding expansion.--
``(A) Study.--The NICE Board, in consultation with
the National Association of Insurance Commissioners,
shall conduct a study on--
``(i) permitting a benefit package under
section 1882 of the Social Security Act (other
than the outpatient prescription drug only
package established under subsection (v)(1)(A)
of such section) to offer outpatient
prescription drugs; and
``(ii) providing financial assistance under
this part on behalf of eligible medicare
beneficiaries receiving coverage under such a
benefit package.
``(B) Report.--Not later than 1 year after all of
the members of the NICE Board are appointed under
subsection (c), the NICE Board shall submit a detailed
report to Congress on the study conducted pursuant to subparagraph (A),
together with any recommendations as determined appropriate by the NICE
Board.
``(5) Recommendations regarding grant program.--The NICE
Board shall provide recommendations and necessary information
regarding the NICE drug benefit program to the Secretary in
order for the Secretary to provide health insurance
information, counseling, and assistance grants under section
4360 of the Omnibus Budget Reconciliation Act of 1990.
``(c) Membership of NICE Board.--
``(1) Number and appointment.--
``(A) In general.--The NICE Board shall be composed
of 7 members appointed by the President, by and with
the advice and consent of the Senate.
``(B) Specific representatives.--In making
appointments under subparagraph (A), the President
shall ensure that the following groups are represented
on the NICE Board:
``(i) Consumers.
``(ii) Private health plan insurers
(including insurers that offer fee-for-service
and managed care plans) with expertise in the
quality, scope, and marketing of health care
services.
``(iii) The Health Care Financing
Administration.
``(iv) State insurance commissioners.
``(C) Secretary of hhs.--The Secretary shall be a
nonvoting, ex officio member of the NICE Board.
``(2) Deadline for initial appointment.--The initial
members of the NICE Board shall be appointed by not later than
6 months after the date of enactment of this section.
``(3) Terms.--
``(A) In general.--The terms of the members of the
NICE Board shall be for 6 years, except that of the
members first appointed--
``(i) three shall be appointed for terms of
6 years;
``(ii) two shall be appointed for terms of
4 years; and
``(iii) two shall be appointed for terms of
2 years.
``(B) Vacancies.--Any member appointed to fill a
vacancy occurring before the expiration of the term for
which the member's predecessor was appointed shall be
appointed only for the remainder of that term. A member
may serve after the expiration of that member's term
until a successor has taken office.
``(4) Chairperson.--The President shall designate the
chairperson of the NICE Board, except that the representative
from the Health Care Financing Administration may not be
designated as chairperson.
``(d) Operation of the Board.--
``(1) Meetings.--The NICE Board shall meet at the call of
the chairperson or upon written request of a majority of its
members.
``(2) Quorum.--A majority of the members of the NICE Board
shall constitute a quorum, but a lesser number of members may
hold hearings.
``(e) Powers of the NICE Board.--
``(1) Hearings.--The NICE Board may hold such hearings, sit
and act at such times and places, take such testimony, and
receive such evidence as the NICE Board considers advisable to
carry out the purposes of this part.
``(2) Information from federal agencies.--Upon request of
the chairperson of the NICE Board, the head of any Federal
department or agency shall furnish such information to the NICE
Board as is necessary to carry out the functions of the NICE
Board under this part.
``(3) Postal services.--The NICE Board may use the United
States mails in the same manner and under the same conditions
as other departments and agencies of the Federal Government.
``(4) Gifts.--The NICE Board may accept, use, and dispose
of gifts or donations of services or property.
``(f) Board Personnel Matters.--
``(1) Members.--
``(A) Compensation.--Each member of the NICE Board
who is not an officer or employee of the Federal
Government shall be compensated at a rate equal to the
daily equivalent of the annual rate of basic pay
prescribed for level IV of the Executive Schedule under
section 5315 of title 5, United States Code, for each
day (including travel time) during which such member is
engaged in the performance of the duties of the NICE Board. All members
of the NICE Board who are officers or employees of the United States
shall serve without compensation in addition to that received for their
services as officers or employees of the United States.
``(B) Travel expenses.--The members of the NICE
Board shall be allowed travel expenses, including per
diem in lieu of subsistence, at rates authorized for
employees of agencies under subchapter I of chapter 57
of title 5, United States Code, while away from their
homes or regular places of business in the performance
of services for the NICE Board.
``(C) Removal.--The President may remove a member
of the NICE Board only for neglect of duty or
malfeasance in office.
``(2) Staff.--
``(A) In general.--The chairperson of the NICE
Board may, without regard to the civil service laws and
regulations, appoint and terminate an executive
director and such other additional personnel as may be
necessary to enable the NICE Board to perform its
duties. The employment of an executive director shall
be subject to confirmation by the NICE Board.
``(B) Compensation.--The chairperson of the NICE
Board may fix the compensation of the executive
director and other personnel without regard to the
provisions of chapter 51 and subchapter III of chapter
53 of title 5, United States Code, relating to
classification of positions and General Schedule pay
rates, except that the rate of pay for the executive
director and other personnel may not exceed the rate
payable for level V of the Executive Schedule under
section 5316 of such title.
``(C) Detail of government employees.--Any Federal
Government employee may be detailed to the NICE Board
without further reimbursement, and such detail shall be
without interruption or loss of civil service status or
privilege.
``(D) Procurement of temporary and intermittent
services.--The chairperson of the NICE Board may
procure temporary and intermittent services under
section 3109(b) of title 5, United States Code, at
rates for individuals which do not exceed the daily
equivalent of the annual rate of basic pay prescribed
for level V of the Executive Schedule under section
5316 of such title.
``nice trust fund
``Sec. 1860F. (a) Creation of Trust Fund.--There is established in
the Treasury of the United States a trust fund to be known as the `NICE
Trust Fund', consisting of such amounts as may be appropriated or
credited to the NICE Trust Fund as provided in this section.
``(b) Amounts in NICE Trust Fund.--
``(1) In general.--The NICE Trust Fund shall consist of the
following amounts:
``(A) Amounts deposited in, or appropriated to, the
NICE Trust Fund as provided in this section.
``(B) Any gifts and bequests made to such Trust
Fund.
``(2) Appropriation.--There are hereby authorized to be
appropriated to the NICE Trust Fund amounts from the on-budget
surplus.
``(3) Transfer.--The amounts appropriated pursuant to
paragraph (2) shall be transferred by the Secretary of the
Treasury from time to time from the general fund in the
Treasury to the NICE Trust Fund.
``(c) Expenditures From Trust Fund.--Amounts in the NICE Trust Fund
shall only be available for making expenditures to carry out this part,
including administrative expenses of the NICE Board.
``(d) Application of HI Trust Fund Provisions.--The provisions of
subsections (b) through (e) of section 1817 shall apply to the NICE
Board, this part, and the NICE Trust Fund in the same manner as they
apply to the Board of Trustees (and the Secretary and the Health Care
Financing Administration), part A, and the Federal Hospital Insurance
Trust Fund, respectively, except that--
``(1) the Board of Trustees shall be composed of the NICE
Board and the Secretary of the Treasury; and
``(2) the annual report shall be submitted as part of the
annual report provided under section 1860E(b)(3).''.
SEC. 3. CONFORMING CHANGES TO MEDIGAP.
Section 1882 of the Social Security Act (42 U.S.C. 1395ss) is
amended by adding at the end the following:
``(v)(1) Notwithstanding subsection (p), the benefit packages
established under such subsection shall be revised (in the manner
described in subsection (p)(1)(E)) so that--
``(A) there is established a benefit package consisting of
only outpatient prescription drug benefits that are consistent
with NICE prescription drug coverage (as defined in section
1860B(b)) and that are offered only through the NICE Board and
in accordance with part D;
``(B) such package shall permit coverage of outpatient
prescription drugs that exceeds the thresholds established
under such section;
``(C) no package (except the package established under
subparagraph (A)) includes coverage of outpatient prescription
drugs provided under part D; and
``(D) other benefit packages that do not include
prescription drug coverage may be substituted for the packages
eliminated under subparagraph (C).
In this title, a medicare supplemental policy which has the benefit
package described in subparagraph (A) is referred to as a `NICE
medicare supplemental policy'. The revisions of benefit packages under
this paragraph shall not effect the renewal of medicare supplemental
policies under this section that are in existence on the effective date
of such revisions, and shall be designed to avoid adverse selection and
to be affordable.
``(2) Notwithstanding subsection (d), nothing in this section shall
be construed as prohibiting or making unlawful--
``(A) the sale or issuance of a NICE medicare supplemental
policy to an individual who has a medicare supplemental policy
that does not provide coverage of outpatient prescription
drugs;
``(B) the sale or issuance of a medicare supplemental
policy that does not provide coverage of outpatient
prescription drugs to an individual who has a NICE medicare
supplemental policy; or
``(C) the sale or issuance of such a NICE medicare
supplemental policy to an individual who is enrolled in a
Medicare+Choice plan that does not provide coverage of
outpatient prescription drugs (not including coverage required
to be provided under part A or B).
The sale or issuance of policies under the circumstances described in
this paragraph shall be treated as not `duplicative' under this
section.
``(3)(A) No medicare supplemental policy of the insurer that is in
effect on the effective date of the revision under paragraph (1) and
that has a benefit package classified as `H', `I', or `J' under the
standards established by subsection (p)(2) shall be deemed to meet the
standards in subsection (c) unless the insurer--
``(i) provides written notice, within a 60-day period
specified by the revisions, to the policyholder or certificate
holder (at the most recent available address) of the offer
described in clause (ii) and of the fact that, so long as they
retain coverage under such policy, they are unable to purchase
a NICE medicare supplemental policy; and
``(ii) offers the individual under the terms described in
subparagraph (B), during a period of at least 180 days
beginning on the date specified in subparagraph (C),
institution of coverage effective as of a date specified by the
revisions, a non-NICE medicare supplemental policy that the
Secretary determines is most comparable to the policy in which
the individual is enrolled (but for coverage of prescription
drugs).
``(B) The terms described under this subparagraph are terms which
do not--
``(i) deny or condition the issuance or effectiveness of a
medicare supplemental policy described in subparagraph (A)(ii)
that is offered and is available for issuance to new enrollees
by such issuer;
``(ii) discriminate in the pricing of such policy because
of health status, claims experience, receipt of health care, or
medical condition; or
``(iii) impose an exclusion of benefits based on a pre-
existing condition under such policy.
``(C) The date specified in this subparagraph for a policy issued
in a State is such date as specified by the revisions (taking into
account the method used under subsection (n)(4) for establishing a date
under that subsection).
``(4) In applying this section with respect to NICE medicare
supplemental policies, any reference to the `Secretary' is deemed a
reference to the NICE Board.''.
SEC. 4. PROVISION OF INFORMATION ON NICE DRUG BENEFIT PROGRAM UNDER
HEALTH INSURANCE INFORMATION, COUNSELING, AND ASSISTANCE
GRANTS.
Section 4360(b)(2)(A)(ii) of the Omnibus Budget Reconciliation Act
of 1990 (42 U.S.C. 1395b-4(b)(2)(A)(ii)) is amended by striking ``and
information'' and inserting ``, information regarding the NICE drug
benefit program under part D of title XVIII of the Social Security Act,
and information''.
<all>