[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 18 Introduced in Senate (IS)]







109th CONGRESS
  1st Session
                                 S. 18

To amend title XVIII of the Social Security Act to make improvements to 
                the medicare program for beneficiaries.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 24, 2005

 Mr. Dayton (for himself, Mr. Reid, Ms. Stabenow, Mrs. Feinstein, Mr. 
   Kennedy, Mr. Corzine, Mr. Schumer, Mrs. Murray, Ms. Mikulski, Mr. 
Lautenberg, Mr. Akaka, Mr. Inouye, Mrs. Clinton, Mr. Levin, Mr. Kerry, 
  Mr. Leahy, Mr. Rockefeller, Mr. Dodd, Mr. Sarbanes, and Mr. Durbin) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend title XVIII of the Social Security Act to make improvements to 
                the medicare program for beneficiaries.

    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 ``Meeting Our 
Responsibility to Medicare Beneficiaries Act of 2005''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
           TITLE I--ELIMINATING SPECIAL INTEREST PREFERENCES

Sec. 101. Negotiating fair prices for medicare prescription drugs.
Sec. 102. Elimination of MA Regional Plan Stabilization Fund (Slush 
                            Fund).
Sec. 103. Application of risk adjustment reflecting characteristics for 
                            the entire medicare population in payments 
                            to Medicare Advantage organizations.
       TITLE II--IMPROVING THE MEDICARE PROGRAM FOR BENEFICIARIES

Sec. 201. Eliminating coverage gap.
Sec. 202. Requiring two prescription drug plans to avoid Federal 
                            fallback.
Sec. 203. Waiver of part D late enrollment penalty for transition 
                            period.
Sec. 204. Improving the transition of full-benefit dual eligible 
                            individuals to coverage under the medicare 
                            drug benefit.
Sec. 205. Part B premium reduction.
Sec. 206. Study and report on providing incentives to preserve retiree 
                            coverage.
Sec. 207. Promoting transparency in employer subsidy payments.

           TITLE I--ELIMINATING SPECIAL INTEREST PREFERENCES

SEC. 101. NEGOTIATING FAIR PRICES FOR MEDICARE PRESCRIPTION DRUGS.

    (a) In General.--Section 1860D-11 of the Social Security Act (42 
U.S.C. 1395w-111) is amended by striking subsection (i) (relating to 
noninterference) and by inserting the following new subsection:
    ``(i) Authority To Negotiate Prices With Manufacturers.--
            ``(1) In general.--The Secretary shall have authority 
        similar to that of other Federal entities that purchase 
        prescription drugs in bulk to negotiate contracts with 
        manufacturers of covered part D drugs, consistent with the 
        requirements and in furtherance of the goals of providing 
        quality care and containing costs under this part.
            ``(2) Required use of authority.--
                    ``(A) Fallback plans.--The Secretary shall exercise 
                the authority described in paragraph (1) with respect 
                to covered part D drugs offered under each fallback 
                prescription drug plan under subsection (g).
                    ``(B) PDPs and ma-pd plans.--In order to ensure 
                that beneficiaries enrolled under prescription drug 
                plans and MA-PD plans and taxpayers are getting fair 
                and affordable prices for covered part D drugs that 
                reflect the bulk purchasing power of such enrollees, 
                the Secretary shall exercise the authority described in 
                paragraph (1) with respect to such drugs offered under 
                all such plans if the Secretary determines that the 
                negotiated prices available under such plans for such 
                drugs are not fair and affordable prices compared to 
                the prices obtained by other Federal government 
                programs for such drugs.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect as if included in the enactment of section 101(a) of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(Public Law 108-173; 117 Stat. 2071).

SEC. 102. ELIMINATION OF MA REGIONAL PLAN STABILIZATION FUND (SLUSH 
              FUND).

    (a) In General.--Subsection (e) of section 1858 of the Social 
Security Act (42 U.S.C. 1395w-27a) is repealed.
    (b) Conforming Amendment.--Section 1858(f)(1) of the Social 
Security Act (42 U.S.C. 1395w-27a(f)(1)) is amended by striking 
``subject to subsection (e),''.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in the enactment of section 221(c) of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(Public Law 108-173; 117 Stat. 2181).

SEC. 103. APPLICATION OF RISK ADJUSTMENT REFLECTING CHARACTERISTICS FOR 
              THE ENTIRE MEDICARE POPULATION IN PAYMENTS TO MEDICARE 
              ADVANTAGE ORGANIZATIONS.

    Effective January 1, 2006, in applying risk adjustment factors to 
payments to organizations under section 1853 of the Social Security Act 
(42 U.S.C. 1395w-23), the Secretary of Health and Human Services shall 
ensure that payments to such organizations are adjusted based on such 
factors to ensure that the health status of the enrollee is reflected 
in such adjusted payments, including adjusting for the difference 
between the health status of the enrollee and individuals enrolled 
under the original medicare fee-for-service program under parts A and B 
of title XVIII of such Act. Payments to such organizations must, in 
aggregate, reflect such differences.

       TITLE II--IMPROVING THE MEDICARE PROGRAM FOR BENEFICIARIES

SEC. 201. ELIMINATING COVERAGE GAP.

    (a) In General.--Section 1860D-2(b)(4)(B) of the Social Security 
Act (42 U.S.C. 1395w-102(b)(4)(B)) is amended to read as follows:
                    ``(B) Annual out-of-pocket threshold.--For purposes 
                of this part, the `annual out-of-pocket threshold' 
                specified in this subparagraph for a year is equal to 
                the greater of--
                            ``(i) $3,600; or
                            ``(ii) the initial coverage limit for the 
                        year specified in paragraph (3).''.
    (b) Conforming Amendment.--Section 1860D-22(a)(3)(B)(ii) of the 
Social Security Act (42 U.S.C. 1395w-132(b)(4)(B)(ii)) is amended by 
striking ``and the annual out-of-pocket threshold, respectively, are 
annually adjusted under paragraphs (1) and (4)(B) of section 1860D-
2(b)'' and inserting ``is annually adjusted under paragraph (1) of 
section 1860D-2(b) (using the percentage increase specified in 
paragraph (6) of such section)''.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in the enactment of section 101(a) of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(Public Law 108-173; 117 Stat. 2071).

SEC. 202. REQUIRING TWO PRESCRIPTION DRUG PLANS TO AVOID FEDERAL 
              FALLBACK.

    (a) In General.--Section 1860D-3(a) of the Social Security Act (42 
U.S.C. 1395w-103(a)) is amended--
            (1) in paragraph (1)--
                    (A) by striking ``qualifying plans (as defined in 
                paragraph (3))'' and inserting ``prescription drug 
                plans''; and
                    (B) by striking ``, at least one of which is a 
                prescription drug plan'';
            (2) in paragraph (2), by striking ``qualifying plans'' and 
        inserting ``prescription drug plans''; and
            (3) by striking paragraph (3).
    (b) Effective Date.--The amendments made by this section shall take 
effect as if included in the enactment of section 101(a) of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(Public Law 108-173; 117 Stat. 2071).

SEC. 203. WAIVER OF PART D LATE ENROLLMENT PENALTY FOR TRANSITION 
              PERIOD.

    (a) In General.--Section 1860D-13(b) of the Social Security Act (42 
U.S.C. 1895w-113(b)) is amended by adding at the end the following new 
paragraph:
            ``(8) Waiver of penalty for months prior to 2008.--A part D 
        eligible individual who enrolls for the first time in a 
        prescription drug plan or an MA-PD plan under this part prior 
        to January 1, 2008, shall not be subject an increase in the 
        monthly beneficiary premium established under subsection (a) 
        with respect to months occurring prior to such date.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect as if included in the enactment of section 101(a) of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(117 Stat. 2071).

SEC. 204. IMPROVING THE TRANSITION OF FULL-BENEFIT DUAL ELIGIBLE 
              INDIVIDUALS TO COVERAGE UNDER THE MEDICARE DRUG BENEFIT.

    (a) In General.--Notwithstanding subsection (d)(1) of section 1935 
of the Social Security Act (42 U.S.C. 1396u-5), beginning on January 1, 
2006, the Secretary of Health and Human Services shall administer a 12-
month period during which full-benefit dual eligible individuals (as 
defined in section 1935(c)(6) of the Social Security Act) shall 
gradually transition from receiving medical assistance for prescribed 
drugs under the medicaid program under title XIX of such Act to 
obtaining coverage of covered part D drugs (as defined in section 
1860D-2(e) (42 U.S.C. 1395w-102(e)) under title XVIII of such Act in 
order to assure that such individuals continue to receive the 
outpatient prescription drugs they need.
    (b) Adjustments to Phased-Down State Contribution.--The Secretary 
of Health and Human Services shall make appropriate adjustments to the 
amount of payments required to be made by a State or the District of 
Columbia under section 1935(c) of the Social Security Act (42 U.S.C. 
1396u-5(c)) for months occurring during the period described in 
subsection (a) in order to account for increased costs for the 
provision of medical assistance incurred by the State or the District 
of Columbia by reason of the application of the transition period 
required under this section.

SEC. 205. PART B PREMIUM REDUCTION.

    Section 1839(a) of the Social Security Act (42 U.S.C. 1395r(a)) is 
amended--
            (1) in paragraph (3), in the first sentence, by striking 
        ``The Secretary'' and inserting ``Subject to paragraph (5), the 
        Secretary''; and
            (2) by adding at the end the following new paragraph:
    ``(5) For each year (beginning with 2006), the Secretary shall 
reduce the monthly premium rate determined under paragraph (3) for each 
month in the year for each individual enrolled under this part 
(including such an individual subject to an increased premium under 
subsection (b) or (i)) so that the aggregate amount of such reductions 
in the year is equal to the aggregate amount of reduced expenditures 
from the Federal Supplementary Medicare Insurance Trust Fund in the 
year that the Secretary estimates will result from the provisions of 
section 103 of the Meeting Our Responsibility to Medicare Beneficiaries 
Act of 2005.''.

SEC. 206. STUDY AND REPORT ON PROVIDING INCENTIVES TO PRESERVE RETIREE 
              COVERAGE.

    (a) Study.--The Secretary of Health and Human Services shall 
conduct a study to determine what additional incentives should be 
provided to employers in order for such employers to continue to 
provide retirees with prescription drug coverage. Such study shall 
include an assessment of permitting costs incurred by an employer for 
covered part D drugs on behalf of a retiree to be treated as incurred 
costs for purposes of reaching the annual out-of-pocket threshold under 
section 1860D-2(b)(4) of the Social Security Act (42 U.S.C. 1395w-
102(b)(4)).
    (b) Report.--Not later than January 1, 2006, the Secretary of 
Health and Human Services shall submit to Congress a report on the 
study under subsection (a) together with such recommendations for 
legislation as the Secretary deems appropriate.

SEC. 207. PROMOTING TRANSPARENCY IN EMPLOYER SUBSIDY PAYMENTS.

    (a) In General.--Section 1860D-22(a) of the Social Security Act (42 
U.S.C. 1895w-132(a)) is amended by adding at the end the following new 
paragraph:
            ``(7) Disclosure of certain information.--The Secretary 
        shall make the following information regarding the sponsor of a 
        qualified prescription drug plan receiving a subsidy under this 
        section available to the public through the Internet website of 
        the Centers for Medicare & Medicaid Services and other 
        appropriate means:
                    ``(A) The information used by the Secretary to 
                ensure that the prescription drug coverage offered 
                under the plan meets the requirements for subsidy 
                payments under this section.
                    ``(B) The total amount of the subsidy payments made 
                to the sponsor under this section.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect as if included in the enactment of section 101(a) of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(Public Law 108-173; 117 Stat. 2071).
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