I 

108TH CONGRESS 

1ST SESSION H. R. 2199

To amend title XVIII of the Social Security Act to provide for a voluntary 

program for limiting maximum out-of-pocket expenditures for beneficiaries under the Medicare Program. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 21, 2003

Mr. STARK introduced the following bill; which was referred to the Committee 

on Energy and 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 title XVIII of the Social Security Act to provide 

for a voluntary program for limiting maximum out-ofpocket expenditures for beneficiaries under the Medicare 

Program.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Medicare Out-of-Pocket Spending Limit Act of 2003’’. 

6 (b) TABLE OF CONTENTS.—The table of contents of 

7 this Act is as follows:
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Sec. 1. Short title; table of contents. 

Sec. 2. Establishment of medicare voluntary catastrophic coverage program.

‘‘PART D—VOLUNTARY CATASTROPHIC BENEFIT PROGRAM

‘‘Sec. 1860. Establishment of program. 

‘‘Sec. 1860A. Scope of benefits. 

‘‘Sec. 1860B. Eligibility and enrollment. 

‘‘Sec. 1860C. Monthly premium; collection of premiums. 

‘‘Sec. 1860E. Federal Catastrophic Insurance Account. 

‘‘Sec. 1860F. Appropriations to cover Government contributions. 

Sec. 3. Medicaid buy-in of medicare catastrophic coverage for certain low-income individuals. 

‘‘Sec. 1860D. Special eligibility, enrollment, and copayment rules for low-income individuals.

1 SEC. 2. ESTABLISHMENT OF MEDICARE VOLUNTARY CATA2 STROPHIC COVERAGE PROGRAM. 

3 (a) IN GENERAL.—Title XVIII of the Social Security 

4 Act is amended—

5 (1) by redesignating part D as part E; and 

6 (2) by inserting after part C the following new 

7 part: 

8 ‘‘PART D—VOLUNTARY CATASTROPHIC BENEFIT

9 PROGRAM

10 ‘‘ESTABLISHMENT OF PROGRAM

11 ‘‘SEC. 1860. There is established as a part of the 

12 medicare program under this title a voluntary program to 

13 cover catastrophic out-of-pocket costs incurred under 

14 parts A and B. 

15 ‘‘SCOPE OF BENEFITS

16 ‘‘SEC. 1860A. (a) IN GENERAL.—The benefits pro17 vided to an individual enrolled in the insurance program 

18 under this part shall consist of elimination of further cost-
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1 sharing (described in subsection (b)) for expenses incurred 

2 during a year after the individual has incurred cost-shar3 ing totaling the catastrophic limit specified in subsection 

4 (c). 

5 ‘‘(b) COST-SHARING COVERED.—

6 ‘‘(1) IN GENERAL.—For purposes of this part, 

7 the term ‘cost-sharing’ means costs incurred by an 

8 individual that are attributable to the following: 

9 ‘‘(A) INPATIENT HOSPITAL DEDUCTIBLE

10 AND HOSPITAL COINSURANCE.—Costs incurred 

11 for the deductible and coinsurance described in 

12 section 1813(a)(1). 

13 ‘‘(2) BLOOD DEDUCTIBLE.—The deduction 

14 described in section 1813(a)(2). 

15 ‘‘(C) SNF COINSURANCE.—Coinsurance 

16 described in section 1813(a)(3). 

17 ‘‘(D) HOSPICE COINSURANCE.—Hospice 

18 coinsurance under section 1813(a)(4). 

19 ‘‘(E) PART B DEDUCTIBLE AND COINSUR20 ANCE.—Amounts charged as the deductible or 

21 coinsurance or copayments under part B, but 

22 not including any amounts owed in excess of 

23 the full payment rate recognized under this title 

24 with respect to the items or services involved. 
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1 ‘‘(2) TREATMENT OF INCURRED COSTS.—For 

2 purposes of this part, costs shall be treated as in3 curred only if they were incurred during an individ4 ual’s coverage period under this part and only if 

5 they were billed and owed, regardless of whether 

6 payment was or was not made by the individual or 

7 by another party (including by a group health plan, 

8 by a medicare supplemental health insurance policy, 

9 under title XIX, or otherwise). 

10 ‘‘(c) CATASTROPHIC LIMIT.—

11 ‘‘(1) IN GENERAL.—The catastrophic limit 

12 under this subsection is equal to—

13 ‘‘(A) for 2006, $2000; or 

14 ‘‘(B) for a subsequent year, is equal to 

15 $2,000 increased the percentage by which the 

16 average expenditures per full-year enrollee 

17 under this part for that subsequent year will ex18 ceed such average for 2006. 

19 ‘‘(2) ROUNDING.—Any amount computed under 

20 paragraph (1)(B) shall be rounded to the nearest 

21 $50.

22 ‘‘(3) PROMULGATION.—Not later than Sep23 tember 1 of each year (beginning with 2006) the 

24 Secretary shall determine the catastrophic limit 

25 under this subsection for the following year. 
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1 ‘‘(d) ADMINISTRATION OF BENEFITS.—The Sec2 retary shall establish a method for the administration of 

3 this part through fiscal intermediaries and carriers under 

4 parts A and B in coordination with the payment of bene5 fits under those parts. In carrying out this part—

6 ‘‘(1) to the maximum extent feasible, the Sec7 retary shall provide for timely determination of eligi8 bility and benefits so as to permit the adjustment of 

9 the amount of payments made to providers under 

10 such parts to take into account the catastrophic ben11 efits provided under this part and to avoid the need 

12 for payment of covered cost-sharing by beneficiaries; 

13 ‘‘(2) the Secretary shall develop a method for 

14 the reimbursement of individuals (or other parties) 

15 in cases in which they make payment for costs for 

16 which benefits are available under this part; and 

17 ‘‘(3) the Secretary may enter into contracts 

18 with other parties to administer and facilitate ad19 ministration of this part. 

20 ‘‘(e) SOURCE OF PAYMENT.—Payment of benefits 

21 under this part shall be made from the Federal Cata22 strophic Insurance Account within the Federal Supple23 mentary Medical Insurance Trust Fund and shall be 

24 transferred (in a manner specified by the Secretary) to 

25 the Federal Hospital Insurance Trust Fund. 
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1 ‘‘ELIGIBILITY AND ENROLLMENT

2 ‘‘SEC. 1860B. (a) ELIGIBILITY.—Every individual 

3 who, in or after 2006, is entitled to hospital insurance ben4 efits under part A and is enrolled in the medical insurance 

5 program under part B is eligible to enroll in the insurance 

6 program under this part, during an enrollment period pre7 scribed in or under this section, in such manner and form 

8 as may be prescribed by regulations. 

9 ‘‘(b) ENROLLMENT.—

10 ‘‘(1) IN GENERAL.—Each individual who satis11 fies subsection (a) shall be enrolled (or eligible to en12 roll) in the program under this part in accordance 

13 with the provisions of section 1837 (other than sub14 section (f)), as if that section applied to this part, 

15 except as otherwise explicitly provided in this part. 

16 ‘‘(2) PENALTY FOR LATE ENROLLMENT.—Ex17 cept as provided in subsection (d), section 1860D(b) 

18 (relating to loss of coverage under the medicaid pro19 gram) or as otherwise explicitly provided, no indi20 vidual shall be entitled to enroll in the program 

21 under this part at any time after the initial enroll22 ment period without penalty, and in the case of all 

23 other late enrollments, the Secretary shall develop 

24 and apply a late enrollment penalty for the indi-
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1 vidual that is similar to the late enrollment penalty 

2 described in section 1839(b). 

3 ‘‘(3) SPECIAL ENROLLMENT PERIOD IN 2005.—

4 ‘‘(A) IN GENERAL.—In the case of an indi5 vidual who first satisfies subsection (a) on or 

6 before October 1, 2005, there shall be an initial 

7 general enrollment period beginning on such 

8 date and ending on March 31, 2006, during 

9 which the individual may enroll under this part. 

10 ‘‘(B) EFFECTIVE DATE OF COVERAGE.—

11 An individual who enrolls under the program 

12 under this part pursuant to subparagraph (A) 

13 shall be entitled to benefits under this part be14 ginning on the first day of the month following 

15 the month in which such enrollment occurs, but 

16 in no case earlier than January 1, 2006. 

17 ‘‘(c) PERIOD OF COVERAGE.—

18 ‘‘(1) IN GENERAL.—Except as otherwise pro19 vided in this part, an individual’s coverage under the 

20 program under this part shall be effective for the pe21 riod provided in section 1838, as if that section ap22 plied to the program under this part. 

23 ‘‘(2) PART D COVERAGE TERMINATED BY TER24 MINATION OF COVERAGE UNDER PART A OR PART

25 B.—In addition to the causes of termination speci-
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1 fied in section 1838, an individual’s coverage under 

2 this part shall be terminated when the individual 

3 terminates coverage under either part A or part B, 

4 effective on the effective date of the earlier termi5 nation of coverage under either such part. 

6 ‘‘(d) ENROLLMENT FOR INDIVIDUALS WHOSE GROUP

7 HEALTH PLAN COVERAGE ENDS.—The provisions of sec8 tion 1837(i) shall apply with respect to enrollment under 

9 this part in the same manner as such section applies with 

10 respect to enrollment under part B. 

11 ‘‘MONTHLY PREMIUM; COLLECTION OF PREMIUMS

12 ‘‘SEC. 1860C. (a) MONTHLY PREMIUM BASED ON

13 PART B METHODOLOGY.—

14 ‘‘(1) DETERMINATION OF MONTHLY ACTUARIAL

15 RATE AND MONTHLY PREMIUM.—The Secretary 

16 shall compute, with respect to this part and the Fed17 eral Catastrophic Insurance Account, a monthly ac18 tuarial rate and a monthly premium in the same 

19 manner as such a rate and premium is computed 

20 under section 1839(a) with respect to part B and 

21 the Federal Supplementary Medical Insurance Trust 

22 Fund. 

23 ‘‘(2) APPLICATION OF PART B LATE ENROLL24 MENT PENALTY AND RELATED PROVISIONS.—The 

25 provisions of subsections (b), (d), and (e) of section 

26 1839 shall apply with respect to enrollment under 
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1 this part and the premium established under para2 graph (1) in the same manner as such provisions 

3 apply to enrollment under part B and the premium 

4 established under section 1839(a). 

5 ‘‘(3) TREATMENT AS PART OF CONSOLIDATED

6 PREMIUM.—The provisions of section 1839(f) shall 

7 be applied (after the first year in which this part is 

8 in effect) as if the premium established under this 

9 section were included as part of the premium under 

10 section 1839. 

11 ‘‘(b) PAYMENT OF PREMIUMS.—

12 ‘‘(1) GENERALLY THROUGH DEDUCTION FROM

13 SOCIAL SECURITY, RAILROAD RETIREMENT BENE14 FITS, OR BENEFITS ADMINISTERED BY OPM.—

15 ‘‘(A) IN GENERAL.—In the case of an indi16 vidual who is entitled to or receiving benefits as 

17 described in subsection (a), (b), or (d) of sec18 tion 1840, premiums payable under this part 

19 shall be collected by deduction from such bene20 fits at the same time and in the same manner

21 as premiums payable under part B are collected 

22 pursuant to section 1840. 

23 ‘‘(B) TRANSFERS OF DEDUCTION TO AC24 COUNT.—The Secretary of the Treasury shall, 

25 from time to time, but not less often than quar-
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1 terly, transfer premiums collected pursuant to 

2 subparagraph (A) to the Federal Catastrophic 

3 Insurance Account from the appropriate funds 

4 and accounts described in subsections (a)(2), 

5 (b)(2), and (d)(2) of section 1840, on the basis 

6 of the certifications described in such sub7 sections. The amounts of such transfers shall be 

8 appropriately adjusted to the extent that prior 

9 transfers were too great or too small. 

10 ‘‘(2) OTHERWISE THROUGH DIRECT PAYMENTS

11 BY ENROLLEE TO SECRETARY.—

12 ‘‘(A) IN THE CASE OF INADEQUATE DE13 DUCTION.—An individual to whom paragraph 

14 (1) applies (other than an individual receiving 

15 benefits as described in section 1840(d)) and 

16 who estimates that the amount that will be 

17 available for deduction under such paragraph 

18 for any premium payment period will be less 

19 than the amount of the monthly premiums for 

20 such period may (under regulations) pay to the 

21 Secretary the estimated balance, or such great22 er portion of the monthly premium as the indi23 vidual chooses. 

24 ‘‘(B) OTHER CASES.—An individual en25 rolled in the insurance program under this part 
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1 with respect to whom none of the preceding 

2 provisions of this subsection applies (or to 

3 whom section 1840(c) applies) shall pay pre4 miums to the Secretary at such times and in 

5 such manner as the Secretary shall by regula6 tions prescribe. 

7 ‘‘(C) DEPOSIT OF PREMIUMS IN AC8 COUNT.—Amounts paid to the Secretary under 

9 this paragraph shall be deposited in the Treas10 ury to the credit of the Federal Catastrophic 

11 Insurance Account in the Federal Supple12 mentary Medical Insurance Trust Fund. 

13 ‘‘SPECIAL ELIGIBILITY, ENROLLMENT, AND COPAYMENT

14 RULES FOR LOW-INCOME INDIVIDUALS

15 ‘‘SEC. 1860D. (a) STATE OPTIONS FOR COVERAGE: 

16 CONTINUATION OF MEDICAID COVERAGE OR ENROLL17 MENT UNDER THIS PART.—

18 ‘‘(1) IN GENERAL.—The Secretary shall, at the 

19 request of a State, enter into an agreement with the 

20 State under which all individuals described in para21 graph (2) are enrolled in the program under this 

22 part, without regard to whether any such individual 

23 has previously declined the opportunity to enroll in 

24 such program. 

25 ‘‘(2) ELIGIBILITY GROUPS.—The individuals de26 scribed in this paragraph, for purposes of paragraph 
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1 (1), are individuals who satisfy section 1860B(a) 

2 and who are—

3 ‘‘(A) in a coverage group or groups per4 mitted under section 1843 (as selected by the 

5 State and specified in the agreement); or 

6 ‘‘(B) qualified medicare catastrophic bene7 ficiaries (as defined in section 1905(x)(1)). 

8 ‘‘(3) COVERAGE PERIOD.—The period of cov9 erage under this part of an individual enrolled under 

10 an agreement under this subsection shall be as fol11 lows: 

12 ‘‘(A) INDIVIDUALS ELIGIBLE (AT STATE

13 OPTION) FOR PART B BUY-IN.—In the case of 

14 an individual described in subsection (a)(2)(A), 

15 the coverage period shall be the same period 

16 that applies (or would apply) pursuant to sec17 tion 1843(d). 

18 ‘‘(B) QUALIFIED MEDICARE CATA19 STROPHIC BENEFICIARIES.—In the case of an 

20 individual described in subsection (a)(2)(B)—

21 ‘‘(i) the coverage period shall begin on 

22 the latest of—

23 ‘‘(I) January 1, 2006; 

24 ‘‘(II) the first day of the third 

25 month following the month in which 
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1 the State agreement is entered into; 

2 or 

3 ‘‘(III) the first day of the first 

4 month following the month in which 

5 the individual satisfies section 

6 1860B(a); and 

7 ‘‘(ii) the coverage period shall end on 

8 the last day of the month in which the in9 dividual is determined by the State to have 

10 become ineligible for medicare catastrophic 

11 coverage benefits. 

12 ‘‘(4) ENROLLMENT FOR LOW-INCOME SUBSIDY

13 THROUGH OTHER MEANS.—

14 ‘‘(A) FLEXIBILITY IN ENROLLMENT PROC15 ESS.—With respect to low-income individuals 

16 residing in a State enrolling under this part on 

17 or after January 1, 2006, the Secretary shall 

18 provide for determinations of whether the indi19 vidual is eligible for a subsidy and the amount 

20 of such individual’s income to be made under 

21 arrangements with appropriate entities other 

22 than State medicaid agencies. 

23 ‘‘(B) USE OF CERTAIN INFORMATION.—

24 Arrangements with entities under subparagraph 

25 (A) shall provide for —
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1 ‘‘(i) the use of existing Federal gov2 ernment databases to identify eligibility; 

3 and 

4 ‘‘(ii) the use of information obtained 

5 under section 154 of the Social Security 

6 Act Amendments of 1994 for newly eligible 

7 medicare beneficiaries, and the application 

8 of such information with respect to other 

9 medicare beneficiaries. 

10 ‘‘(b) SPECIAL PART D ENROLLMENT OPPORTUNITY

11 FOR INDIVIDUALS LOSING MEDICAID ELIGIBILITY.—

12 ‘‘(1) IN GENERAL.—In the case of an individual 

13 who—

14 ‘‘(A) satisfies section 1860B(a); and 

15 ‘‘(B) loses eligibility for benefits under the 

16 State plan under title XIX after having been 

17 enrolled under such plan or having been deter18 mined eligible for such benefits; 

19 the Secretary shall provide an opportunity for enroll20 ment under the program under this part during the

21 period that begins on the date that such individual 

22 loses such eligibility and ends on the date specified 

23 by the Secretary. 

24 ‘‘(2) REFERENCE TO WAIVER OF LATE ENROLL25 MENT PENALTY.—For provision waiving imposition 
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1 of late enrollment penalty in the case of an enroll2 ment of an individual under this part by reason of 

3 paragraph (1), see section 1860B(b)(2). 

4 ‘‘(c) DEFINITION.—For purposes of this section, the 

5 term ‘State’ has the meaning given such term under sec6 tion 1101(a) for purposes of title XIX. 

7 ‘‘FEDERAL CATASTROPHIC INSURANCE ACCOUNT

8 ‘‘SEC. 1860E. (a) ESTABLISHMENT.—There is cre9 ated within the Federal Supplementary Medical Insurance 

10 Trust Fund established by section 1841 an account to be 

11 known as the ‘Federal Catastrophic Insurance Account’ 

12 (in this section referred to as the ‘Account’). 

13 ‘‘(b) AMOUNTS IN ACCOUNT.—

14 ‘‘(1) IN GENERAL.—The Account shall consist 

15 of—

16 ‘‘(A) such amounts as may be deposited in, 

17 or appropriated to, such fund as provided in 

18 this part; and 

19 ‘‘(B) such gifts and bequests as may be 

20 made as provided in section 201(i)(1). 

21 ‘‘(2) SEPARATION OF FUNDS.—Funds provided 

22 under this part to the Account shall be kept sepa23 rate from all other funds within the Federal Supple24 mentary Medical Insurance Trust Fund. 

25 ‘‘(c) PAYMENTS FROM ACCOUNT.—
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1 ‘‘(1) IN GENERAL.—The Managing Trustee 

2 shall pay from time to time from the Account such 

3 amounts as the Secretary certifies are necessary to 

4 make the payments provided for by this part, and 

5 the payments with respect to administrative ex6 penses in accordance with section 201(g). 

7 ‘‘(2) TREATMENT IN RELATION TO PART B PRE8 MIUM.—Amounts payable from the Account shall not 

9 be taken into account in computing actuarial rates 

10 or premium amounts under section 1839. 

11 ‘‘APPROPRIATIONS TO COVER GOVERNMENT

12 CONTRIBUTIONS

13 ‘‘SEC. 1860F. There are authorized to be appro14 priated from time to time, out of any moneys in the Treas15 ury not otherwise appropriated, to the Federal Cata16 strophic Insurance Account, a Government contribution 

17 computed in the same manner as the Government con18 tributions are computed under section 1844(a)(1), except 

19 that any reference to part B or a provision in section 

20 1839(a) is deemed to be a reference to this part and the 

21 corresponding provision in section 1860C.’’. 

22 (b) CATASTROPHIC COVERAGE OPTION UNDER

23 MEDICARE+CHOICE PLANS.—

24 (1) ELIGIBILITY, ELECTION, AND ENROLL25 MENT.—Section 1851 of the Social Security Act (42 

26 U.S.C. 1395w–21) is amended—
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1 (A) in subsection (a)(1)(A), by striking 

2 ‘‘parts A and B’’ inserting ‘‘parts A, B, and 

3 D’’; and 

4 (B) in subsection (i)(1), by striking ‘‘parts 

5 A and B’’ and inserting ‘‘parts A, B, and D’’. 

6 (2) VOLUNTARY BENEFICIARY ENROLLMENT

7 FOR CATASTROPHIC COVERAGE.—Section 

8 1852(a)(1)(A) of such Act (42 U.S.C. 1395w–

9 22(a)(1)(A)) is amended by inserting ‘‘(and under 

10 part D to individuals also enrolled under that part)’’ 

11 after ‘‘parts A and B’’. 

12 (3) PAYMENTS TO ORGANIZATIONS.—Section 

13 1853(a)(1)(A) of such Act (42 U.S.C. 1395w–

14 23(a)(1)(A)) is amended—

15 (A) by inserting ‘‘determined separately for 

16 benefits under parts A and B and under part 

17 D (for individuals enrolled under that part)’’ 

18 after ‘‘as calculated under subsection (c)’’; 

19 (B) by striking ‘‘that area, adjusted for 

20 such risk factors’’ and inserting ‘‘that area. In 

21 the case of payment for benefits under parts A 

22 and B, such payment shall be adjusted for such 

23 risk factors as’’; and 

24 (C) by inserting before the last sentence 

25 the following: ‘‘In the case of the payments for 
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1 benefits under part D, such payment shall be 

2 adjusted for the risk factors of each enrollee as 

3 the Secretary determines to be feasible and ap4 propriate.’’. 

5 (4) CALCULATION OF ANNUAL

6 MEDICARE+CHOICE CAPITATION RATES.—Section 

7 1853(c) of such Act (42 U.S.C. 1395w–23(c)) is 

8 amended—

9 (A) in paragraph (1), in the matter pre10 ceding subparagraph (A), by inserting ‘‘for ben11 efits under parts A and B’’ after ‘‘capitation 

12 rate’’; 

13 (B) in paragraph (6)(A), by striking ‘‘rate 

14 of growth in expenditures under this title’’ and 

15 inserting ‘‘rate of growth in expenditures for 

16 benefits available under parts A and B’’; and 

17 (C) by adding at the end the following new 

18 paragraph: 

19 ‘‘(8) PAYMENT FOR CATASTROPHIC COV20 ERAGE.—The Secretary shall determine a capitation 

21 rate for catastrophic coverage described in part D—

22 ‘‘(A) for 2006, which is based on the pro23 jected national per capita costs for coverage 

24 under part D and associated claims processing 
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1 costs for beneficiaries under the original medi2 care fee-for-service program; and 

3 ‘‘(B) for each subsequent year, which shall 

4 be equal to the rate for the previous year up5 dated by the Secretary’s estimate of the pro6 jected per capita rate of growth in expenditures 

7 under this title for such coverage for an indi8 vidual enrolled under part D. 

9 The Secretary shall provide for an appropriate geo10 graphic adjustment in such capitation rate to reflect 

11 differences (other than those reflected in the health 

12 status adjustments) in the average per capita ex13 penditures under part D in the different geographic 

14 areas.’’. 

15 (5) REQUIREMENT FOR ADDITIONAL BENE16 FITS.—Section 1854(f)(1) of such Act (42 U.S.C. 

17 1395w–24(f)(1)) is amended by adding at the end 

18 the following new sentence: ‘‘Such determination 

19 shall be made separately for benefits under parts A

20 and B and for catastrophic coverage benefits under 

21 part D.’’. 

22 (c) CONFORMING REVISION OF MEDIGAP STAND23 ARDS.—The provisions of section 1882(p)(1)(E) of the So24 cial Security Act (42 U.S.C. 1395ss(p)(1)(E)) shall apply 

25 to the benefit changes effected by this section and the 
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1 standards for benefit packages previously established 

2 under section 1882(p) of such Act shall be revised to avoid 

3 duplication with the benefits provided under part D of title 

4 XVIII of such Act (as inserted by subsection (a)). 

5 (d) CONFORMING AMENDMENTS TO FEDERAL SUP6 PLEMENTARY HEALTH INSURANCE TRUST FUND.—Sec7 tion 1841 of the Social Security Act (42 U.S.C. 1395t) 

8 is amended—

9 (1) in the last sentence of subsection (a)—

10 (A) by striking ‘‘and’’ after ‘‘section 

11 201(i)(1)’’; and 

12 (B) by inserting before the period the fol13 lowing: ‘‘, and such amounts as may be depos14 ited in, or appropriated to, the Federal Cata15 strophic Insurance Account established by sec16 tion 1860E’’; 

17 (2) in subsection (g), by inserting after ‘‘by this 

18 part,’’ the following: ‘‘the payments provided for 

19 under part D (in which case the payments shall 

20 come from the Federal Catastrophic Insurance Ac21 count in the Federal Supplementary Medical Insur22 ance Trust Fund),’’; 

23 (3) in the first sentence of subsection (h), by 

24 inserting before the period the following: ‘‘and sec25 tion 1860C(b)(1)(A) (in which case the payments 
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1 shall come from the Federal Catastrophic Insurance 

2 Account in the Federal Supplementary Medical In3 surance Trust Fund)’’; and 

4 (4) in the first sentence of subsection (i)—

5 (A) by striking ‘‘and’’ after ‘‘section 

6 1840(b)(1)’’; and 

7 (B) by inserting before the period the fol8 lowing: ‘‘, section 1860D(b)(1)(A) (in which 

9 case the payments shall come from the Federal 

10 Catastrophic Insurance Account in the Federal 

11 Supplementary Medical Insurance Trust 

12 Fund)’’. 

13 (e) APPLYING EXCLUSIONS FROM COVERAGE.—Sec14 tion 1862(a) of such Act (42 U.S.C. 1395y(a)) is amended 

15 in the matter preceding paragraph (1) by striking ‘‘part 

16 A or part B’’ and inserting ‘‘part A, B, or D’’. 

17 SEC. 3. MEDICAID BUY-IN OF MEDICARE CATASTROPHIC 

18 COVERAGE FOR CERTAIN LOW-INCOME INDI19 VIDUALS. 

20 (a) STATE OPTION TO BUY-IN LOW-INCOME INDI21 VIDUALS.—

22 (1) IN GENERAL.—Section 1902(a)(10)(E) of 

23 the Social Security Act (42 U.S.C. 1396a(a)(10)(E)) 

24 is amended—
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1 (A) by striking ‘‘and’’ at the end of clause 

2 (iii); 

3 (B) by adding ‘‘and’’ at the end of clause 

4 (iv); and 

5 (C) by adding at the end the following new 

6 clause: 

7 ‘‘(v) at the option of a State, for mak8 ing medical assistance available for medi9 care catastrophic cost-sharing for qualified 

10 medicare catastrophic beneficiaries (as de11 fined in subsection (x)(1)), regardless of 

12 whether or not such beneficiaries are oth13 erwise eligible for medical assistance under 

14 this title;’’. 

15 (2) CONSTRUCTION.—Nothing in this section 

16 shall be construed as reducing the amount of med17 ical assistance otherwise available to medicare bene18 ficiaries under the medicaid program.

19 (b) ADDITIONAL FUNDS FOR TERRITORIES.—Section 

20 1108 of the Social Security Act (42 U.S.C. 1308) is 

21 amended—

22 (1) in subsection (f), by striking ‘‘subsection 

23 (g),’’ and inserting ‘‘subsections (g) and (h)’’; and 

24 (2) by adding at the end the following new sub25 section: 
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1 ‘‘(h) ADDITIONAL MEDICAID PAYMENTS TO TERRI2 TORIES FOR MEDICARE CATASTROPHIC COVERAGE.—. 

3 ‘‘(1) IN GENERAL.—In the case of a territory 

4 that develops and implements a plan described in 

5 paragraph (2) (for providing medical assistance with 

6 respect to the provision of catastrophic coverage to 

7 medicare beneficiaries), the amount otherwise deter8 mined under subsection (f) (as increased under sub9 section (g)) for the State shall be increased by the 

10 amount specified in paragraph (3). 

11 ‘‘(2) PLAN.—The plan described in this para12 graph is a plan that—

13 ‘‘(A) provides medical assistance with re14 spect to the provision of some or all medicare 

15 catastrophic coverage described in part D of 

16 title XVIII to low-income medicare bene17 ficiaries; and 

18 ‘‘(B) assures that additional amounts re19 ceived by the State that are attributable to the 

20 operation of this subsection are used only for 

21 such assistance. 

22 ‘‘(3) INCREASED AMOUNT.—

23 ‘‘(A) IN GENERAL.—The amount specified 

24 in this paragraph for a State for a year is equal 

25 to the product of—
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1 ‘‘(i) the aggregate amount specified in 

2 subparagraph (B); and 

3 ‘‘(ii) the amount specified in sub4 section (g)(1) for that State, divided by the 

5 sum of the amounts specified in such sec6 tion for all such States. 

7 ‘‘(B) AGGREGATE AMOUNT.—The aggre8 gate amount specified in this subparagraph 

9 for—

10 ‘‘(i) 2006, is equal to $15,000,000; or 

11 ‘‘(ii) a subsequent year, is equal to 

12 $15,000,000 multiplied by the percentage 

13 described in section 1860A(c)(1)(B) for 

14 that subsequent year.’’. 

15 (c) DEFINITIONS OF ELIGIBLE BENEFICIARIES AND

16 COVERAGE.—Section 1905 of the Social Security Act (42 

17 U.S.C. 1396d) is amended by adding at the end the fol18 lowing new subsection: 

19 ‘‘(x)(1) The term ‘qualified medicare catastrophic 

20 beneficiary’ means an individual—

21 ‘‘(A) who is enrolled or enrolling under part D 

22 of title XVIII; and 

23 ‘‘(B) whose income (as determined under sec24 tion 1612 for purposes of the supplemental security 

25 income program, except as provided in subsection 
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1 (p)(2)(D)) is below 175 percent of the official pov2 erty line (as referred to in subsection (p)(2)) appli3 cable to a family of the size involved.

4 ‘‘(2) The term ‘medicare catastrophic cost-sharing’ 

5 means the following: 

6 ‘‘(A) In the case of a qualified medicare cata7 strophic beneficiary whose income (as determined 

8 under paragraph (1)) is less than 150 percent of the 

9 official poverty line, premiums under section 1860D. 

10 ‘‘(B) In the case of a qualified medicare cata11 strophic beneficiary whose income (as determined 

12 under paragraph (1)) is at least 150 percent but less 

13 than 175 percent of the official poverty line, a per14 centage of premiums under section 1860D, deter15 mined on a linear sliding scale ranging from 100 

16 percent for individuals with incomes at 150 percent 

17 of such line to 0 percent for individuals with incomes 

18 at 175 percent of such line. 

19 ‘‘(3) In the case of any State which is providing med20 ical assistance to its residents under a waiver granted 

21 under section 1115, the Secretary shall require the State 

22 to meet the requirement of section 1902(a)(10)(E) in the 

23 same manner as the State would be required to meet such 

24 requirement if the State had in effect a plan approved 

25 under this title.’’. 
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1 (d) 100 PERCENT FMAP FOR COST-SHARING.—The 

2 first sentence of section 1905(b) of such Act (42 U.S.C. 

3 1396d(b)) is amended—

4 (1) by striking ‘‘and’’ before ‘‘(4)’’; and 

5 (2) by inserting before the period at the end the 

6 following: ‘‘, and (5) with respect to the 50 States 

7 and the District of Columbia the Federal medical as8 sistance percentage shall be 100 percent with respect 

9 to medicare catastrophic cost-sharing (as defined in 

10 subsection (x)(2))’’. 

11 (e) CONFORMING AMENDMENT.—Section 1905(a) of 

12 the Social Security Act (42 U.S.C. 1396d) is amended in 

13 the second sentence of the flush matter at the end by 

14 striking ‘‘premiums under part B’’ the first place it ap15 pears and inserting ‘‘premiums under parts B and D’’.

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