A bill to amend the Social Security Act to protect social security cost-of-living adjustments (COLA).

Summary: Social Security COLA Protection Act of 2004 - Amends title XVIII (Medicare) of the Social Security Act to limit increases in the monthly Medicare premium, including the Medicare Advantage prescription drug program premium, to 25 percent of any Social Security cost of living increase.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Social Security COLA Protection Act 
of 2004''.

SEC. 2. PROTECTION OF SOCIAL SECURITY COLA INCREASES AGAINST EXCESSIVE 
              MEDICARE PREMIUM INCREASES.

    (a) Application to Part B Premiums.--Section 1839(f) of the Social 
Security Act (42 U.S.C. 1395r(f)) is amended--
            (1) by striking ``(f) For any calendar year after 1988'' 
        and inserting ``(f)(1) For any calendar year after 1988 and 
        before 2005''; and
            (2) by adding at the end the following new paragraph:
    ``(2) For any calendar year (beginning with 2005), if an individual 
is entitled to monthly benefits under section 202 or 223 or to a 
monthly annuity under section 3(a), 4(a), or 4(f) of the Railroad 
Retirement Act of 1974 for November and December of the preceding year, 
if the monthly premium of the individual under this section for 
December of the preceding year and for January of the year involved is 
deducted from those benefits under section 1840(a)(1) or section 
1840(b)(1), and if the amount of the individual's premium is not 
adjusted for January of the year involved under subsection (i), the 
monthly premium otherwise determined under this section for the 
individual for that year shall not be increased pursuant to subsection 
(a)(3) to an amount that exceeds 25 percent of the amount of the 
increase in such monthly benefits for that individual attributable to 
section 215(i).''.
    (b) Application to Part D Premiums.--
            (1) In general.--Section 1860D-13(a)(1) of such Act (42 
        U.S.C. 1395ww-113(a)(1)) is amended--
                    (A) in subparagraph (F), by striking ``(D) and 
                (E),'' and inserting ``(D), (E), and (F),'';
                    (B) by redesignating subparagraph (F) as 
                subparagraph (G); and
                    (C) by inserting after subparagraph (E) the 
                following new subparagraph:
                    ``(F) Protection of social security cola 
                increase.--For any calendar year, if an individual is 
                entitled to monthly benefits under section 202 or 223 
                or to a monthly annuity under section 3(a), 4(a), or 
                4(f) of the Railroad Retirement Act of 1974 for 
                November and December of the preceding year and was 
                enrolled under a PDP plan or MA-PD plan for such 
                months, the base beneficiary premium otherwise applied 
                under this paragraph for the individual for months in 
                that year shall be decreased by the amount (if any) by 
                which the sum of the amounts described in the following 
                clauses (i) and (ii) exceeds 25 percent of the amount 
                of the increase in such monthly benefits for that 
                individual attributable to section 215(i):
                            ``(i) Part d premium increase factor.--
                                    ``(I) In general.--Except as 
                                provided in this clause, the amount of 
                                the increase (if any) in the adjusted 
                                national average monthly bid amount (as 
                                determined under subparagraph (B)(iii)) 
                                for a month in the year over such 
                                amount for a month in the preceding 
                                year.
                                    ``(II) No application to full 
                                premium subsidy individuals.--In the 
                                case of an individual enrolled for a 
                                premium subsidy under section 1860D-
                                14(a)(1), zero.
                                    ``(III) Special rule for partial 
                                premium subsidy individuals.--In the 
                                case of an individual enrolled for a 
                                premium subsidy under section 1860D-
                                14(a)(2), a percent of the increase 
                                described in subclause (I) equal to 100 
                                percent minus the percent applied based 
                                on the linear scale under such section.
                            ``(ii) Part b premium increase factor.--If 
                        the individual is enrolled for such months 
                        under part B--
                                    ``(I) In general.--Except as 
                                provided in subclause (II), the amount 
                                of the annual increase in premium 
                                effective for such year resulting from 
                                the application of section 1839(a)(3), 
                                as reduced (if any) under section 
                                1839(f)(2).
                                    ``(II) No application to 
                                individuals participating in medicare 
                                savings program.--In the case of an 
                                individual who is enrolled for medical 
                                assistance under title XIX for medicare 
                                cost-sharing described in section 
                                1905(p)(3)(A)(ii), zero.''.
            (2) Application under medicare advantage program.--Section 
        1854(b)(2)(B) of such Act (42 U.S.C. 1395w-24(b)(2)(B)), as in 
        effect as of January 1, 2006, relating to MA monthly 
        prescription drug beneficiary premium, is amended by inserting 
        after ``as adjusted under section 1860D-13(a)(1)(B)'' the 
        following: ``and section 1860D-13(a)(1)(F)''.
            (3) Payment from medicare prescription drug account.--
        Section 1860D-16(b) of such Act (42 U.S.C. 1395w-116(b)) is 
        amended--
                    (A) in paragraph (1)--
                            (i) by striking ``and'' at the end of 
                        subparagraph (C);
                            (ii) by striking the period at the end of 
                        subparagraph (D) and inserting ``; and''; and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(E) payment under paragraph (5) of premium 
                reductions effected under section 1860D-13(a)(1)(F).''; 
                and
                    (B) by adding at the end the following new 
                paragraph:
            ``(5) Payment for cola protection premium reductions.--
                    ``(A) In general.--In addition to payments provided 
                under section 1860D-15 to a PDP sponsor or an MA 
                organization, in the case of each part D eligible 
                individual who is enrolled in a prescription drug plan 
                offered by such sponsor or an MA-PD plan offered by 
                such organization and who has a premium reduced under 
                section 1860D-13(a)(1)(F), the Secretary shall provide 
                for payment to such sponsor or organization of an 
                amount equivalent to the amount of such premium 
                reduction.
                    ``(B) Application of provisions.--The provisions of 
                subsections (d) and (f) of section 1860D-15 (relating 
                to payment methods and disclosure of information) shall 
                apply to payment under subparagraph (A) in the same 
                manner as they apply to payments under such section.''.
    (c) Disregard of Premium Reductions in Determining Dedicated 
Revenues Under MMA Cost Containment.--Section 801(c)(3)(D) of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(Public Law 108-173) is amended by adding at the end the following: 
``Such premiums shall also be determined without regard to any 
reductions effected under section 1839(f)(2) or 1860D-13(a)(1)(F) of 
such title.''.
    (d) Effective Dates.--
            (1) Part b premium.--The amendments made by subsection (a) 
        apply to premiums for months beginning with January 2005.
            (2) Part d premium.--The amendments made by subsection (b) 
        apply to premiums for months beginning with January 2007.
            (3) MMA provision.--The amendment made by subsection (c) 
        shall take effect on the date of the enactment of this Act.