II 

109TH CONGRESS 

2D SESSION S. 2342 

To amend title XVIII of the Social Security Act to deliver a meaningful 

benefit and lower prescription drug prices under the Medicare program. 

IN THE SENATE OF THE UNITED STATES 

MARCH 1, 2006 

Ms. STABENOW (for herself, Mr. KENNEDY, Mr. LEVIN, Mrs. CLINTON, Mr. 

AKAKA, Mr. LAUTENBERG, Mrs. BOXER, and Mr. DAYTON) 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 deliver 

a meaningful benefit and lower prescription drug prices 

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. 

4 This Act may be cited as the ‘‘Medicare-Guaranteed 

5 Prescription Drug Act of 2006’’. 

6 SEC. 2. ESTABLISHMENT OF MEDICARE-GUARANTEED PRE7 SCRIPTION DRUG PLAN OPTION. 

8 (a) IN GENERAL.—Subpart 2 of part D of the Social 

9 Security Act (42 U.S.C. 1395w–111 et seq.) is amended 


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1 by inserting after section 1860D–11 the following new sec2 tion: 

3 ‘‘MEDICARE-GUARANTEED PRESCRIPTION DRUG PLAN

4 OPTION

5 ‘‘SEC. 1860D–11A. (a) IN GENERAL.—Notwith6 standing any other provision of this part, for each year 

7 (beginning with 2007), the Secretary shall— 

8 ‘‘(1) in addition to any plans offered under sec9 tion 1860D–11, offer a Medicare-Guaranteed Pre10 scription Drug Plan (as defined in subsection (c)) 

11 with a service area that consists of the entire United 

12 States; and 

13 ‘‘(2) enter into negotiations with pharma14 ceutical manufacturers to reduce the purchase cost 

15 of covered part D drugs under such Plan for eligible 

16 part D individuals in accordance with subsection (b). 

17 ‘‘(b) NEGOTIATIONS.—Notwithstanding section 

18 1860D–11(i), for purposes of offering the Medicare-Guar19 anteed Prescription Drug Plan under this section, the Sec20 retary shall negotiate with pharmaceutical manufacturers 

21 with respect to the purchase price of covered part D drugs 

22 and shall encourage the use of more affordable therapeutic 

23 equivalents to the extent such practices do not override 

24 medical necessity as determined by the prescribing physi25 cian. To the extent practicable and consistent with the 

26 previous sentence, the Secretary shall implement strateVerDate Aug 31 2005 02:56 Mar 02, 2006 Jkt 049200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2342.IS S2342

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1 gies similar to those used by other Federal purchasers of 

2 prescription drugs, and other strategies, to reduce the pur3 chase cost of covered part D drugs. 

4 ‘‘(c) MEDICARE-GUARANTEED PRESCRIPTION DRUG

5 PLAN DEFINED.—For purposes of this part, the term 

6 ‘Medicare-Guaranteed Prescription Drug Plan’ means a 

7 prescription drug plan that offers standard prescription 

8 drug coverage and access to negotiated prices described 

9 in section 1860D–2(a)(1)(A). 

10 ‘‘(d) MONTHLY BENEFICIARY PREMIUM.—The 

11 monthly beneficiary premium to be charged under a Medi12 care-Guaranteed Prescription Drug Plan shall be uniform 

13 nationally and shall be equal to the base beneficiary pre14 mium (computed under section 1860D–13(a)(2)) applica15 ble for the year.’’. 

16 (b) SUNSET OF UNNECESSARY PLAN REQUIREMENT

17 AND FALLBACK PLAN PROVISIONS.— 

18 (1) PLAN REQUIREMENT.—Section 1860D–3 of 

19 the Social Security Act (42 U.S.C. 1395w–103) is 

20 amended by adding at the end the following new 

21 subsection: 

22 ‘‘(c) PROVISIONS ONLY APPLICABLE IN 2006.—The 

23 provisions of this section shall only apply with respect to 

24 2006.’’. 


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1 (2) FALLBACK.—Section 1860D–11(g) of such 

2 Act (42 U.S.C. 1395w–111(g)) is amended by add3 ing at the end the following new paragraph: 

4 ‘‘(8) NO AUTHORITY FOR FALLBACK PLANS

5 AFTER 2006.—A fallback prescription drug plan shall 

6 not be available after December 31, 2006.’’. 

7 (c) CONFORMING AMENDMENTS.— 

8 (1) APPLICATION OF LIMITED RISK PLANS.— 

9 Section 1860D–11(f) of the Social Security Act (42 

10 U.S.C. 1395w–111(f)) is amended by adding at the 

11 end the following new paragraph: 

12 ‘‘(5) NO AUTHORITY FOR LIMITED RISK PLANS

13 AFTER 2006.—A limited risk plan shall not be avail14 able after December 31, 2006.’’. 

15 (2) ANNUAL REPORT.—Section 1860D–11(h) of 

16 such Act (42 U.S.C. 1395w–111(h)) is amended— 

17 (A) in the heading, by striking ‘‘ANNUAL’’; 

18 (B) in the first sentence— 

19 (i) by striking ‘‘an annual’’ and in20 serting ‘‘a’’; and 

21 (ii) by inserting ‘‘during 2006’’ before 

22 the period at the end; and 

23 (C) by striking the second sentence. 


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1 (3) COLLECTION OF MONTHLY BENEFICIARY

2 PREMIUMS.—Section 1860D–13(c)(3) of such Act 

3 (42 U.S.C. 1395w–113(c)(3)) is amended— 

4 (A) in the heading, by inserting ‘‘AND

5 MEDICARE-GUARANTEED PRESCRIPTION DRUG

6 PLANS’’ after ‘‘FALLBACK PLANS’’; and 

7 (B) by inserting ‘‘or a Medicare-Guaran8 teed Prescription Drug Plan’’ after ‘‘a fallback 

9 prescription drug plan’’. 

10 (4) PAYMENTS FROM MEDICARE PRESCRIPTION

11 DRUG ACCOUNT.—Section 1860D–16(b)(1) of such 

12 Act (42 U.S.C. 1395w–116(b)(1)) is amended— 

13 (A) in subparagraph (C), by striking 

14 ‘‘and’’ after the semicolon at the end; 

15 (B) in subparagraph (D), by striking the 

16 period at the end and inserting ‘‘; and’’; and 

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

18 subparagraph: 

19 ‘‘(E) payments for expenses incurred with 

20 respect to the operation of Medicare-Guaran21 teed Prescription Drug Plans under section 

22 1860D–11A.’’. 

23 (5) DEFINITIONS.—Section 1860D–41(a) of 

24 such Act (42 U.S.C. 141(a)) is amended by adding 

25 at the end the following new paragraph: 


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1 ‘‘(19) MEDICARE-GUARANTEED PRESCRIPTION

2 DRUG PLAN.—The term ‘Medicare-Guaranteed Pre3 scription Drug Plan’ has the meaning given such 

4 term in section 1860D–11A(c).’’. 

5 (d) EFFECTIVE DATE.—The amendments made by 

6 this section shall take effect on the date of enactment of 

7 this Act. 

8 SEC. 3. IMPROVEMENT OF PART D STANDARD PRESCRIP9 TION DRUG COVERAGE. 

10 (a) DEDUCTIBLE SAME AS PART B.— 

11 (1) IN GENERAL.—Section 1860D–2(b)(1) of 

12 the Social Security Act (42 U.S.C. 1395w– 

13 102(b)(1)) is amended to read as follows: 

14 ‘‘(1) DEDUCTIBLE.—The coverage has an an15 nual deductible that is equal to amount of the de16 ductible applicable for the year under the first sen17 tence of section 1833(b).’’. 

18 (2) CONFORMING AMENDMENT.—Section 

19 1860D–22(a)(3)(B)(ii) of such Act (42 U.S.C. 

20 1395w–132(a)(3)(B)(ii)) is amended by striking ‘‘as 

21 the annual deductible’’ and all that follows through 

22 the period and inserting ‘‘the annual out-of-pocket 

23 threshold is annually adjusted under section 1860D– 

24 2(b)(4)(B), except that in the case of the cost 


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1 threshold, if such amount is not a multiple of $5, it 

2 shall be rounded to the nearest $5.’’ 

3 (b) REDUCED COINSURANCE.— 

4 (1) IN GENERAL.—Section 1860D–2(b)(2) of 

5 the Social Security Act (42 U.S.C. 1395w– 

6 102(b)(2))— 

7 (A) in the heading, by striking ‘‘25 PER8 CENT’’ and inserting ‘‘20 PERCENT’’; and 

9 (B) in clauses (i) and (ii), by striking ‘‘25 

10 percent’’ and inserting ‘‘20 percent’’. 

11 (2) LOW-INCOME SUBSIDY.—Section 1860D– 

12 14(a)(2)(D) of such Act (42 U.S.C. 1395w– 

13 114(a)(2)(D)) is amended— 

14 (A) by striking ‘‘15 percent’’ and inserting 

15 ‘‘10 percent’’; and 

16 (B) by striking ‘‘25 percent’’ and inserting 

17 ‘‘20 percent’’. 

18 (c) ELIMINATION OF COVERAGE GAP.— 

19 (1) IN GENERAL.— 

20 (A) IN GENERAL.—Paragraph (3) of sec21 tion 1860D–2(b) of the Social Security Act (42 

22 U.S.C. 1395w–102(b)) is repealed. 

23 (B) REVISION OF BENEFIT STRUCTURE.— 

24 Section 1860D–2(b)(2)(A) of such Act (42 

25 U.S.C. 1395w–102(b)(2)(A)) is amended by 


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1 striking ‘‘and up to the initial coverage limit 

2 under paragraph (3)’’ and inserting ‘‘and up to 

3 the point at which the annual out-of-pocket 

4 threshold is reached under paragraph (4)’’ in 

5 the matter preceding clause (i). 

6 (2) CONFORMING AMENDMENTS.— 

7 (A) SUPPLEMENTAL PRESCRIPTION DRUG

8 COVERAGE.—Section 1860D–2(a)(2)(A)(i)(I) of 

9 such Act (42 U.S.C. 1395w–102(a)(2)(A)(i)(I)) 

10 is amended— 

11 (i) by striking ‘‘deductible,’’ and in12 serting ‘‘deductible or’’; 

13 (ii) by striking ‘‘, or an increase in 

14 the initial coverage limit’’; and 

15 (iii) by striking ‘‘or increase’’. 

16 (B) CATASTROPHIC.—Section 1860D– 

17 2(b)(4)(C)(i) of such Act (42 U.S.C. 1395w– 

18 102(b)(4)(C)(i)) is amended— 

19 (i) by striking ‘‘paragraph (1),’’ and 

20 inserting ‘‘paragraph (1) or’’; and 

21 (ii) by striking ‘‘and for amounts for 

22 which benefits are not provided because of 

23 the application of the initial coverage limit 

24 described in paragraph (3),’’. 


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1 (C) ALTERNATIVE PRESCRIPTION DRUG

2 COVERAGE.—Section 1860D–2(c)(1)(C) of such 

3 Act (42 U.S.C. 1395w–102(c)(1)(C)) is amend4 ed— 

5 (i) in the heading by striking ‘‘INITIAL

6 COVERAGE LIMIT’’ and inserting ‘‘OUT-OF7 POCKET THRESHOLD’’; and 

8 (ii) by striking ‘‘the initial coverage 

9 limit under subsection (b)(3)’’ each place it 

10 appears and inserting ‘‘the out-of-pocket 

11 threshold under subsection (b)(4)’’. 

12 (D) ACCESS TO NEGOTIATED PRICES.— 

13 Section 1860D–2(d)(1)(A) of such Act (42 

14 U.S.C. 1395w–102(d)(1)(A)) is amended by 

15 striking ‘‘or an initial coverage limit (described 

16 in subsection (b)(3))’’. 

17 (E) CLAIMS INFORMATION.—Section 

18 1860D–4(a)(4)(B)(i) of such Act (42 U.S.C. 

19 1395w–104(a)(4)(B)(i)) is amended by striking 

20 ‘‘relation to—’’ and all that follows through 

21 ‘‘the annual’’ and inserting ‘‘relation to the an22 nual’’. 

23 (F) LOW-INCOME SUBSIDIES.—Section 

24 1860D–14(a) of such Act (42 U.S.C. 1395w– 


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1 114(a)) is amended by striking subparagraph 

2 (C) of paragraphs (1) and (2). 

3 (G) DEFINITION.—Section 1860D– 

4 41(a)(6) of such Act (42 U.S.C. 1395w– 

5 151(a)(6)) is repealed. 

6 (d) ELIMINATION OF COST-SHARING ABOVE ANNUAL

7 OUT-OF-POCKET THRESHOLD.— 

8 (1) IN GENERAL.—Section 1860D–2(b)(4)(A) 

9 of the Social Security Act (42 U.S.C. 1395w– 

10 102(b)(4)(A)) is amended to read as follows: 

11 ‘‘(A) IN GENERAL.—The coverage provides 

12 benefits, after the part D eligible individual has 

13 incurred costs (as described in subparagraph 

14 (C)) for covered part D drugs in a year equal 

15 to the annual out-of-pocket threshold specified 

16 in subparagraph (B), without any cost-shar17 ing.’’. 

18 (2) CONFORMING AMENDMENTS.—Paragraphs 

19 (1) and (2) of section 1860D–14(a) of such Act (42 

20 U.S.C. 1395w–114(a)) are each amended by striking 

21 subparagraph (E). 

22 (e) EFFECTIVE DATE.—The amendments made by 

23 this section shall take effect on January 1, 2007. 

Æ 


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