II 

118TH CONGRESS 

2D SESSION S. 5633 

To establish Medicare flex fund accounts and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 19 (legislative day, DECEMBER 16), 2024 

Mr. SCOTT of Florida introduced the following bill; which was read twice and 

referred to the Committee on Finance 

A BILL 

To establish Medicare flex fund accounts and for other 

purposes. 

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 Flex Fund 

5 Accounts and Flexible Benefits Act of 2024’’. 

6 SEC. 2. MEDICARE FLEX FUND ACCOUNTS. 

7 (a) IN GENERAL.—Part VIII of subchapter F of 

8 chapter 1 of the Internal Revenue Code of 1986 is amend9 ed by adding at the end the following new section: 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
2 

•S 5633 IS

1 ‘‘SEC. 530A. MEDICARE FLEX FUND ACCOUNTS. 

2 ‘‘(a) IN GENERAL.—A Medicare flex fund account 

3 shall be exempt from taxation under this subtitle. Not4 withstanding the preceding sentence, the Medicare flex 

5 fund account shall be subject to the taxes imposed by sec6 tion 511 (relating to imposition of tax on unrelated busi7 ness income of charitable organizations). 

8 ‘‘(b) MEDICARE FLEX FUND ACCOUNT.—For pur9 poses of this section: 

10 ‘‘(1) IN GENERAL.—The term ‘Medicare flex 

11 fund account’ means a trust created or organized in 

12 the United States as a Medicare flex fund account 

13 exclusively for the purpose of paying the qualified 

14 medical expenses of the account beneficiary, but only 

15 if the written governing instrument creating the 

16 trust meets the following requirements: 

17 ‘‘(A) Except in the case of a rollover con18 tribution described in subsection (c)(2), section 

19 220(f)(5), or section 223(f)(5) or a contribution 

20 described in section 138A(1), no contribution 

21 will be accepted— 

22 ‘‘(i) unless it is in cash, 

23 ‘‘(ii) unless the account beneficiary is 

24 an eligible individual for the taxable year 

25 in which the contribution is made, and 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
3 

•S 5633 IS

1 ‘‘(iii) to the extent such contribution, 

2 when added to previous contributions to 

3 the trust for the calendar year, exceeds the 

4 sum of— 

5 ‘‘(I) the dollar amount in effect 

6 under section 223(b)(2)(A), plus 

7 ‘‘(II) in the case of an individual 

8 who has attained age 55 before the 

9 close of the calendar year, the dollar 

10 amount in effect under section 

11 223(b)(3)(B). 

12 ‘‘(B) The trustee is a bank (as defined in 

13 section 408(n)), an insurance company (as de14 fined in section 816), or another person who 

15 demonstrates to the satisfaction of the Sec16 retary that the manner in which such person 

17 will administer the trust will be consistent with 

18 the requirements of this section. 

19 ‘‘(C) No part of the trust assets will be in20 vested in life insurance contracts. 

21 ‘‘(D) The assets of the trust will not be 

22 commingled with other property except in a 

23 common trust fund or common investment 

24 fund. 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
4 

•S 5633 IS

1 ‘‘(E) The interest of an individual in the 

2 balance in his account is nonforfeitable. 

3 ‘‘(2) QUALIFIED MEDICAL EXPENSES.— 

4 ‘‘(A) IN GENERAL.—Except as otherwise 

5 provided in this paragraph, the term ‘qualified 

6 medical expenses’ shall have the meaning given 

7 such term under section 223(d)(2) (determined 

8 without regard to subparagraph (B) thereof). 

9 ‘‘(B) EXCEPTION FOR MEDIGAP PRE10 MIUMS.—Such term shall not include any pre11 mium for a medicare supplemental policy under 

12 section 1882 of the Social Security Act (42 

13 U.S.C. 1395ss). 

14 ‘‘(3) ELIGIBLE INDIVIDUAL.—The term ‘eligible 

15 individual’ means, with respect to any taxable year, 

16 any individual entitled to, or enrolled for, benefits 

17 under part A of title XVIII of the Social Security 

18 Act or enrolled for benefits under part B or D of 

19 such title, including individuals covered under a 

20 Medicare Advantage plan, on the last day of such 

21 taxable year. 

22 ‘‘(4) CERTAIN RULES TO APPLY.—Rules similar 

23 to the following rules shall apply for purposes of this 

24 section: 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
5 

•S 5633 IS

1 ‘‘(A) Section 219(f)(3) (relating to time 

2 when contributions made). 

3 ‘‘(B) Section 408(g) (relating to commu4 nity property laws). 

5 ‘‘(C) Section 408(h) (relating to custodial 

6 accounts). 

7 ‘‘(D) Paragraphs (2) and (4) of section 

8 408(e). 

9 ‘‘(c) TAX TREATMENT OF DISTRIBUTIONS.— 

10 ‘‘(1) IN GENERAL.—Any amount distributed 

11 out of a Medicare flex fund account shall be subject 

12 to tax in the same extent and in the same manner 

13 as distributions from a health savings account under 

14 section 223(f), except that— 

15 ‘‘(A) amounts described in paragraph (2) 

16 thereof shall be includible in gross income in 

17 the manner provided under section 72 (after 

18 taking into account rules similar to the rules of 

19 section 408(d)(2)), 

20 ‘‘(B) for purposes of paragraph (3)(B) 

21 thereof a rollover contribution described in 

22 paragraph (2) shall not be considered an excess 

23 contribution, and 

24 ‘‘(C) paragraph (4) thereof shall not apply. 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
6 

•S 5633 IS

1 ‘‘(2) ROLLOVER CONTRIBUTION.—An amount is 

2 described in this paragraph as a rollover contribu3 tion if it meets the requirements of subparagraphs 

4 (A) and (B). 

5 ‘‘(A) IN GENERAL.—An amount distrib6 uted from a Medicare flex fund account shall 

7 not be includible in gross income if such 

8 amount is paid or distributed from a Medicare 

9 flex fund account to the account beneficiary to 

10 the extent the amount received is paid into a 

11 Medicare flex fund account for the benefit of 

12 such beneficiary not later than the 60th day 

13 after the day on which the beneficiary receives 

14 the payment or distribution. 

15 ‘‘(B) LIMITATION.—This paragraph shall 

16 not apply to any amount described in subpara17 graph (A) received by an individual from a 

18 Medicare flex fund account if, at any time dur19 ing the 1-year period ending on the day of such 

20 receipt, such individual received any other 

21 amount described in subparagraph (A) from a 

22 Medicare flex fund account which was not in23 cludible in the individual’s gross income because 

24 of the application of this paragraph. 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
7 

•S 5633 IS

1 ‘‘(d) REPORTS.—The Secretary may require the 

2 trustee of a Medicare flex fund account to make such re3 ports regarding such account to the Secretary and to the 

4 account beneficiary with respect to contributions, distribu5 tions, the return of excess contributions, and such other 

6 matters as the Secretary determines appropriate. The re7 ports required by this subsection shall be filed at such time 

8 and in such manner and furnished to such individuals at 

9 such time and in such manner as may be required by the 

10 Secretary.’’. 

11 (b) GOVERNMENT CONTRIBUTIONS.—Part III of sub12 chapter B of chapter 1 of the Internal Revenue Code of 

13 1986 is amended by inserting after section 138 the fol14 lowing new section: 

15 ‘‘SEC. 138A. CERTAIN CONTRIBUTIONS TO MEDICARE FLEX 

16 FUND ACCOUNTS. 

17 ‘‘Gross income shall not include any payment to the 

18 Medicare flex fund account (as defined in section 530A) 

19 of an individual by— 

20 ‘‘(1) the Secretary of Health and Human Serv21 ices, or 

22 ‘‘(2) the administrator of a Medicare Advantage 

23 plan.’’. 

24 (c) CONTRIBUTIONS FROM OTHER SAVINGS VEHI25 CLES.— 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
8 

•S 5633 IS

1 (1) HEALTH SAVINGS ACCOUNTS.—Section 

2 223(f)(5) of the Internal Revenue Code of 1986 is 

3 amended by inserting ‘‘or a Medicare flex fund ac4 count (as defined in section 530A)’’ after ‘‘paid into 

5 a health savings account’’. 

6 (2) ARCHER MSAS.—Section 220(f)(5) of such 

7 Code is amended by striking ‘‘or a health savings ac8 count (as defined in section 223(d))’’ and inserting 

9 ‘‘, a health savings account (as defined in section 

10 223(d)), or a Medicare flex fund account (as defined 

11 in section 530A)’’. 

12 (3) IRA DISTRIBUTIONS.—Section 408(d) of 

13 such Code is amended by adding at the end the fol14 lowing new paragraph: 

15 ‘‘(10) DISTRIBUTION FOR MEDICARE FLEX

16 FUND ACCOUNT FUNDING.— 

17 ‘‘(A) IN GENERAL.—In the case of an indi18 vidual who is an eligible individual (as defined 

19 in section 530A(b)(3)) and who elects the appli20 cation of this paragraph for a taxable year, 

21 gross income of the individual for the taxable 

22 year does not include a qualified Medicare FFA 

23 funding distribution to the extent such distribu24 tion is otherwise includible in gross income. 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
9 

•S 5633 IS

1 ‘‘(B) QUALIFIED MEDICARE FFA FUNDING

2 DISTRIBUTION.—For purposes of this para3 graph, the term ‘qualified Medicare FFA fund4 ing distribution’ means a distribution from an 

5 individual retirement plan (other than a plan 

6 described in subsection (k) or (p)) of the em7 ployee to the extent that such distribution is 

8 contributed to the Medicare flex fund account 

9 (as defined in section 530A) of the individual in 

10 a direct trustee-to-trustee transfer. 

11 ‘‘(C) LIMITATION.— 

12 ‘‘(i) IN GENERAL.—The amount ex13 cluded from gross income by subparagraph 

14 (A) shall not exceed the annual limitation 

15 under section 530A(b)(1)(A)(iii). 

16 ‘‘(ii) ONE-TIME TRANSFER.—An indi17 vidual may make an election under sub18 paragraph (A) only for one qualified Medi19 care FFA funding distribution during the 

20 lifetime of the individual. Such an election, 

21 once made, shall be irrevocable. 

22 ‘‘(D) APPLICATION OF SECTION 72.—Rules 

23 similar to the rules of paragraph (9)(E) shall 

24 apply for purposes of this paragraph.’’. 

25 (d) EXCESS CONTRIBUTIONS.— 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
10 

•S 5633 IS

1 (1) IN GENERAL.—Section 4973(a) of such 

2 Code is amended by striking ‘‘or’’ at the end of 

3 paragraph (5), by inserting ‘‘or’’ at the end of para4 graph (6), and by inserting after paragraph (6) the 

5 following new paragraph: 

6 ‘‘(7) a Medicare flex fund account (within the 

7 meaning of section 530A),’’. 

8 (2) EXCESS CONTRIBUTIONS.—Section 4973 of 

9 such Code is amended by adding at the end the fol10 lowing new subsection: 

11 ‘‘(i) EXCESS CONTRIBUTIONS TO MEDICARE FLEX

12 FUND ACCOUNTS.— 

13 ‘‘(1) IN GENERAL.—In the case of a Medicare 

14 flex fund account, the term ‘excess contributions’ 

15 means the sum of— 

16 ‘‘(A) the amount by which the amount con17 tributed for the taxable year to such accounts 

18 exceeds the contribution limitation determined 

19 under section 530A(b)(1)(A)(iii), and 

20 ‘‘(B) the amount determined under this 

21 subsection for the preceding taxable year, re22 duced by the sum of— 

23 ‘‘(i) the distributions out of the ac24 counts for the taxable year which were not 

25 used exclusively to pay the qualified medVerDate Sep 11 2014 22:41 Jan 28, 2025 Jkt 059200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S5633.IS S5633

kjohnson on DSK7ZCZBW3PROD with $$_JOB
11 

•S 5633 IS

1 ical expenses (as determined under section 

2 223(f)(2)) of the account beneficiary, 

3 ‘‘(ii) the excess of— 

4 ‘‘(I) the distributions out of the 

5 accounts for such taxable year which 

6 were used exclusively to pay the quali7 fied medical expenses (as determined 

8 under section 223(f)(1)) of the ac9 count beneficiary, over 

10 ‘‘(II) the amount which would be 

11 taxable by reason of section 

12 530A(c)(1)(A) if such amounts were 

13 described in section 223(f)(2) with re14 spect to such distributions, and 

15 ‘‘(iii) the excess (if any) of the max16 imum amount which may be contributed to 

17 the accounts for the taxable year over the 

18 amount contributed to the accounts for the 

19 taxable year. 

20 ‘‘(2) SPECIAL RULES.—For purposes of para21 graph (1), the following contributions shall not be 

22 taken into account: 

23 ‘‘(A) Any contribution which is distributed 

24 out of the Medicare flex fund account in a dis25 tribution if— 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
12 

•S 5633 IS

1 ‘‘(i) such distribution is received by 

2 the individual on or before the last day 

3 prescribed by law (including extensions of 

4 time) for filing such individual’s return for 

5 such taxable year, and 

6 ‘‘(ii) such distribution is accompanied 

7 by the amount of net income attributable 

8 to such excess contribution. 

9 ‘‘(B) Any rollover contribution described in 

10 section 220(f)(5), 223(f)(5), or 530A(c)(2).’’. 

11 (e) APPLICATION OF PROHIBITED TRANSACTION

12 RULES.— 

13 (1) IN GENERAL.—Section 4975(e)(1) of the 

14 Internal Revenue Code of 1986 is amended by strik15 ing ‘‘or’’ at the end of subparagraph (F), by redesig16 nating subparagraph (G) as subparagraph (H), and 

17 by inserting after subparagraph (F) the following 

18 new subparagraph: 

19 ‘‘(G) a Medicare flex fund account de20 scribed in section 530A, or’’. 

21 (2) SPECIAL RULE.—Section 4975(c) of such 

22 Code is amended by adding at the end the following 

23 new paragraph: 

24 ‘‘(8) SPECIAL RULE FOR MEDICARE FLEX FUND

25 ACCOUNTS.—An individual for whose benefit a MediVerDate Sep 11 2014 22:41 Jan 28, 2025 Jkt 059200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S5633.IS S5633

kjohnson on DSK7ZCZBW3PROD with $$_JOB
13 

•S 5633 IS

1 care flex fund account (within the meaning of sec2 tion 530A) is established shall be exempt from the 

3 tax imposed by this section with respect to any 

4 transaction concerning such account (which would 

5 otherwise be taxable under this section) if, with re6 spect to such transaction, the account ceases to be 

7 a Medicare flex fund account by reason of the appli8 cation of section 530A(b)(4)(D) to such account.’’. 

9 (f) OTHER CONFORMING AMENDMENTS.— 

10 (1) Section 35(g)(3) of the Internal Revenue 

11 Code of 1986 is amended by striking ‘‘or from a 

12 health savings account (as defined in section 

13 223(d))’’ and inserting ‘‘, from a health savings ac14 count (as defined in section 223(d)), or from a 

15 Medicare flex fund account (as defined in section 

16 530A(b))’’. 

17 (2) Section 848(e)(1)(B) of such Code is 

18 amended by striking ‘‘and’’ at the end of clause (iv), 

19 by striking the period at the end of clause (v) and 

20 inserting ‘‘, and’’, and by adding at the end the fol21 lowing new clause: 

22 ‘‘(vi) any contract which is a Medicare 

23 flex fund account (as defined in section 

24 530A(b)).’’. 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
14 

•S 5633 IS

1 (3) Section 877A(e)(2) of such Code is amend2 ed by inserting ‘‘a Medicare flex fund account (as 

3 defined in section 530A(b)),’’ after ‘‘a health savings 

4 account (as defined in section 223)’’. 

5 (4) Section 6693(a)(2) of such Code is amended 

6 by striking ‘‘and’’ at the end of subparagraph (E), 

7 by striking the period at the end of subparagraph 

8 (F) and inserting ‘‘, and’’, and by inserting after 

9 subparagraph (G) the following new subparagraph: 

10 ‘‘(G) section 530A(d) (relating to Medicare 

11 flex fund accounts).’’. 

12 (5) Section 1027(g)(4) of the Consumer Finan13 cial Protection Act of 2010 (12 U.S.C. 5517(g)(4)) 

14 is amended by striking ‘‘or 530’’ and inserting ‘‘530, 

15 or 530A’’. 

16 (g) CLERICAL AMENDMENTS.— 

17 (1) The table of sections for part VIII of sub18 chapter F of chapter 1 of such Code is amended by 

19 adding at the end the following new item: 

‘‘Sec. 530A. Medicare flex fund accounts.’’. 

20 (2) The table of sections for part III of sub21 chapter B of chapter 1 of such Code is amended by 

22 inserting after the item relating to section 138 the 

23 following new item: 

‘‘Sec. 138A. Certain contributions to Medicare flex fund accounts.’’. 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
15 

•S 5633 IS

1 (h) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning on or 

3 after January 1, 2026. 

4 SEC. 3. MEDICARE FLEX FUND ACCOUNTS UNDER MEDI5 CARE ADVANTAGE. 

6 (a) REQUIREMENT FOR MEDICARE FLEX FUND AC7 COUNTS.— 

8 (1) MA PLAN REQUIREMENT TO ESTABLISH

9 MEDICARE FLEX FUND ACCOUNT ON BEHALF OF AN

10 ENROLLEE.—Section 1851 of the Social Security 

11 Act (42 U.S.C. 1395w–21) is amended by adding at 

12 the end the following new subsection: 

13 ‘‘(k) MA PLAN REQUIREMENT TO ESTABLISH MEDI14 CARE FFA ON BEHALF OF AN ENROLLEE.— 

15 ‘‘(1) IN GENERAL.—Notwithstanding any other 

16 provision of law and subject to paragraph (4), any 

17 MA plan offered under this part (other than an 

18 MSA plan) shall establish a Medicare flex fund ac19 count (as defined in section 530A of the Internal 

20 Revenue Code of 1986 and referred to in this sub21 section as a ‘Medicare FFA’) on behalf of an en22 rollee in the plan. 

23 ‘‘(2) REBATES.—In the case of a plan that is 

24 required to provide a monthly rebate to an enrollee 

25 under section 1854(b)(1)(C), the MA plan may proVerDate Sep 11 2014 22:41 Jan 28, 2025 Jkt 059200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\S5633.IS S5633

kjohnson on DSK7ZCZBW3PROD with $$_JOB
16 

•S 5633 IS

1 vide part or all of such rebate through depositing 

2 money into the enrollee’s Medicare FFA. 

3 ‘‘(3) INCENTIVE PAYMENTS.— 

4 ‘‘(A) IN GENERAL.—Notwithstanding sec5 tion 1851(h)(4)(A) or any other provision of 

6 this part and subject to subparagraph (B), MA 

7 plans may deposit money into an enrollee’s 

8 Medicare FFA as a result of the enrollee com9 pleting educational or training programs, pro10 grams for chronic disease management, pro11 grams that promote wellness and health, or 

12 other programs as determined by the Secretary. 

13 ‘‘(B) RULES.—In making the deposits de14 scribed in subparagraph (A), the following rules 

15 shall apply: 

16 ‘‘(i) No payment shall be made to an 

17 MA organization under this part as a re18 sult of such deposits. 

19 ‘‘(ii) In submitting bid information re20 quired under section 1854, the MA organi21 zation offering the MA plan shall not take 

22 into account such deposits. 

23 ‘‘(iii) The MA plan may not charge a 

24 premium or otherwise increase a premium 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
17 

•S 5633 IS

1 under section 1854 as a result of such de2 posits. 

3 ‘‘(4) INITIAL PAYMENT FLOOR.— 

4 ‘‘(A) IN GENERAL.—Subject to subpara5 graph (B), for the first 3 years a Medicare 

6 FFA is established pursuant to paragraph (1) 

7 with respect to an enrollee, each MA plan shall 

8 deposit no less than $400 each year into the en9 rollee’s Medicare FFA. 

10 ‘‘(B) REBATES AND INCENTIVE PAY11 MENTS.—The rebates described in paragraph 

12 (2) and incentive payments described in para13 graph (3) shall count towards the required min14 imum deposit amount described in subpara15 graph (A). 

16 ‘‘(5) PROHIBITION ON SPENDING MEDICARE

17 FFAS ON MEDIGAP PREMIUMS.—An enrollee may not 

18 spend any amount in a Medicare FFA on a premium 

19 for a medicare supplemental policy under section 

20 1882. 

21 ‘‘(6) WAIVER OF MEDICARE FFA REQUIREMENT

22 FOR CERTAIN PLANS.— 

23 ‘‘(A) IN GENERAL.—The Secretary may 

24 waive the requirement described in paragraph 

25 (1) for— 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
18 

•S 5633 IS

1 ‘‘(i) a specialized MA plan for special 

2 needs individuals; 

3 ‘‘(ii) an employer sponsored MA plan 

4 described in section 1857(i)(2); and 

5 ‘‘(iii) an MA plan in which an enrollee 

6 in such plan already has a Medicare FFA 

7 if the study required by section 3(b) of the 

8 Medicare Flex Fund Accounts and Flexible 

9 Benefits Act of 2024 concludes that it is 

10 feasible to permit Medicare beneficiaries 

11 enrolled in an MA plan to select their pre12 ferred Medicare FFA band under the plan. 

13 ‘‘(B) ENROLLEE CHOICE.—Notwith14 standing subparagraph (A), an MA plan de15 scribed in such subparagraph shall establish a 

16 Medicare FFA if an enrollee in such plan elects 

17 to have a Medicare FFA established on behalf 

18 of the enrollee. 

19 ‘‘(7) EDUCATION.—The Secretary shall include 

20 information regarding Medicare FFAs in relevant 

21 education materials, including— 

22 ‘‘(A) the notice required under section 

23 1804(a) (commonly referred to as the Medicare 

24 & You handbook); 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
19 

•S 5633 IS

1 ‘‘(B) any site-of-service transparency infor2 mation made available to the public under sec3 tion 1834(t); 

4 ‘‘(C) any information provided to individ5 uals regarding coverage options under section 

6 1851(d); and 

7 ‘‘(D) in consultation with the Secretary of 

8 the Treasury, additional general beneficiary 

9 educational material regarding this title and 

10 this part.’’. 

11 (2) EFFECTIVE DATE.—The amendment made 

12 by paragraph (1) shall apply to plan years beginning 

13 on or after January 1, 2026. 

14 (b) HHS STUDY AND REPORT ON BENEFICIARIES

15 CHOOSING THEIR PREFERRED BANK FOR MEDICARE

16 FFAS.— 

17 (1) STUDY.—The Secretary of Health and 

18 Human Services (in this subsection referred to as 

19 the ‘‘Secretary’’) shall conduct a study on the feasi20 bility of permitting Medicare beneficiaries enrolled in 

21 a Medicare Advantage plan under part C of title 

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

23 21 et seq.) to select their preferred Medicare flex 

24 fund account (as described in section 1851(k) of 

25 such Act (42 U.S.C. 1395w–21(k))) bank under the 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
20 

•S 5633 IS

1 plan. Such study shall include an analysis of any ad2 ministrative actions that the Secretary may take in 

3 order to permit such beneficiaries to make such se4 lection. 

5 (2) REPORT.—Not later than 1 year after the 

6 date of enactment of this Act, the Secretary shall 

7 submit to Congress a report on the study conducted 

8 under paragraph (1), together with— 

9 (A) a description of any administrative ac10 tions described in paragraph (1) that the Sec11 retary has taken, or plans to take; and 

12 (B) recommendations for such legislation 

13 as the Secretary determines appropriate. 

14 (c) HHS STUDY AND REPORT ON BENEFICIARIES

15 CHOOSING THEIR PREFERRED SUPPLEMENTAL HEALTH

16 BENEFITS.— 

17 (1) STUDY.—The Secretary of Health and 

18 Human Services (in this subsection referred to as 

19 the ‘‘Secretary’’), shall conduct a study on the feasi20 bility of permitting Medicare beneficiaries enrolled in 

21 a Medicare Advantage plan under part C of title 

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

23 21 et seq.) to select their preferred supplemental 

24 health benefits under such plan and have the savings 

25 from unused benefits deposited into the Medicare 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
21 

•S 5633 IS

1 flex fund account (as described in section 1851(k) of 

2 such Act (42 U.S.C. 1395w–21(k))) of the enrollee. 

3 Such study shall include an analysis of any adminis4 trative actions that the Secretary may take in order 

5 to permit such beneficiaries to make such selection. 

6 (2) CONSULTATION.—In carrying out the study 

7 under paragraph (1), the Secretary shall conduct 

8 public meetings and consult with Medicare Advan9 tage plans, actuaries, and health think tanks. 

10 (3) REPORT.—Not later than 1 year after the 

11 date of enactment of this Act, the Secretary shall 

12 submit to Congress a report on the study conducted 

13 under paragraph (1), together with— 

14 (A) a description of any administrative ac15 tions described in paragraph (1) that the Sec16 retary has taken, or plans to take; and 

17 (B) recommendations for such legislation 

18 as the Secretary determines appropriate. 

19 SEC. 4. MEDICARE FLEX FUND ACCOUNTS UNDER OTHER 

20 MEDICARE PROGRAMS. 

21 (a) CMI MODEL.—Section 1115A(b)(2)(B) of the 

22 Social Security Act (42 U.S.C. 1315a(b)(2)(B)) is amend23 ed by adding at the end the following new clause: 

24 ‘‘(xxviii) Permitting individuals par25 ticipating in a model conducted under this 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
22 

•S 5633 IS

1 section to have a Medicare flex fund ac2 count created by section 530A of the Inter3 nal Revenue Code of 1986.’’. 

4 (b) INCENTIVE PROGRAMS.—The Secretary of Health 

5 and Human Services may include a Medicare flex fund 

6 account created by section 530A of the Internal Revenue 

7 Code of 1986 as a component in any Medicare shared sav8 ings program or other Medicare incentive based program 

9 established after the date of enactment of this section. 

10 SEC. 5. SITE OF SERVICE PRICE TRANSPARENCY UPDATE. 

11 (a) PRICE TRANSPARENCY WEBSITE UPDATE.—Sec12 tion 1834(t)(1) of the Social Security Act (42 U.S.C. 

13 1395m(t)(1)) is amended— 

14 (1) in subparagraph (A), by striking ‘‘and’’ at 

15 the end; 

16 (2) in subparagraph (B), by striking the period 

17 at the end and inserting a semicolon; and 

18 (3) by adding at the end the following: 

19 ‘‘(C) the hospital outpatient departments 

20 and ambulatory surgical centers nearest to a 

21 specific zip code entered on the website; 

22 ‘‘(D) whether payments for items and serv23 ices furnished will be made under the payment 

24 system under section 1833(t) or under section 

25 1833(i); and 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
23 

•S 5633 IS

1 ‘‘(E) if available, the quality rating of each 

2 hospital outpatient department and surgical 

3 center.’’. 

4 (b) PRICE TRANSPARENCY WEBSITE ADVISORY

5 GROUP.— 

6 (1) ESTABLISHMENT.—Not later than 90 days 

7 after the date of enactment of this Act, the Adminis8 trator of the Centers for Medicare & Medicaid Serv9 ices (referred to in this subsection as the ‘‘Adminis10 trator’’) shall establish a Medicare Price Trans11 parency Website Advisory Group (referred to in the 

12 subsection as the ‘‘Advisory Group’’). 

13 (2) MEMBERS.—The Advisory Group shall be 

14 composed of the following individuals or the des15 ignees of those individuals: 

16 (A) The Administrator. 

17 (B) The Chair of the Medicare Payment 

18 Advisory Commission. 

19 (C) Two representatives from each of the 

20 following sectors to be selected by the Adminis21 trator: 

22 (i) Medical. 

23 (ii) Technology. 

24 (iii) Think tanks with a background 

25 in health economics. 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
24 

•S 5633 IS

1 (D) Four individuals from non-profit orga2 nizations that represent seniors. 

3 (E) Any other individual the Administrator 

4 determines appropriate. 

5 (3) NO COMPENSATION FOR MEMBERS.—A 

6 member of the Advisory Group shall serve without 

7 compensation in addition to any compensation re8 ceived for the service of the member as an officer or 

9 employee of the United States, if applicable. 

10 (4) DUTIES.— 

11 (A) IN GENERAL.—The Advisory Group 

12 shall review the website described in section 

13 1834(t) of the Social Security Act (42 U.S.C. 

14 1395(t)) (referred to in this subsection as the 

15 ‘‘website’’) and provide recommendations to the 

16 Secretary of Health and Human Services (re17 ferred to in the subsection as the ‘‘Secretary’’) 

18 on ways the website could be changed to in19 crease its usability and allow users of the 

20 website to better understand the cost and qual21 ity for services offered by hospital outpatient 

22 departments and ambulatory surgical centers 

23 covered by the Medicare program under title 

24 XVIII of such Act (42 U.S.C. 1395 et seq.) in 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
25 

•S 5633 IS

1 order for users of the website to be better in2 formed regarding their medical choices. 

3 (B) REPORT.—Not later than 180 days 

4 after the first meeting of the Advisory Group, 

5 the Advisory Group shall submit a report to the 

6 Secretary detailing its recommendations. 

7 (5) WEBSITE UPDATE.—Not later than 1 year 

8 after receiving the report required by paragraph 

9 (4)(B), the Secretary shall update the website con10 sidering the recommendations contained in such re11 port. 

12 SEC. 6. VOLUNTARY PATIENT DRIVEN BENEFIT FLEXI13 BILITY. 

14 (a) DIRECT PRIMARY CARE PAYMENT ADVISORY

15 GROUP.— 

16 (1) ESTABLISHMENT.—Not later than 90 days 

17 after the date of enactment of this Act, the Adminis18 trator of the Centers for Medicare & Medicaid Serv19 ices (referred to in this subsection as the ‘‘Adminis20 trator’’) shall establish a Direct Primary Care Pay21 ment Advisory Group (referred to in the subsection 

22 as the ‘‘Advisory Group’’). 

23 (2) MEMBERS.—The Advisory Group shall be 

24 composed of the following individuals or the des25 ignees of those individuals: 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
26 

•S 5633 IS

1 (A) The Administrator. 

2 (B) The Chair of the Medicare Payment 

3 Advisory Commission. 

4 (C) Two primary care physicians with ex5 perience in direct primary care. 

6 (D) Two specialist physicians who provide 

7 primary care services to patients with chronic 

8 diseases with experience in direct primary care. 

9 (E) Two representatives of Medicare Ad10 vantage plans. 

11 (F) Two health actuaries. 

12 (G) Two representatives of think tanks 

13 with a health policy background. 

14 (H) Any other individual the Adminis15 trator determines appropriate. 

16 (3) NO COMPENSATION FOR MEMBERS.—A 

17 member of the Advisory Group shall serve without 

18 compensation in addition to any compensation re19 ceived for the service of the member as an officer or 

20 employee of the United States, if applicable. 

21 (4) DUTIES.— 

22 (A) IN GENERAL.—The Advisory Group 

23 shall determine— 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
27 

•S 5633 IS

1 (i) a definition of primary care bene2 fits provided under Medicare Advantage 

3 plans; and 

4 (ii) how best to calculate the amount 

5 Medicare Advantage plans would save if 

6 patients, including patients that have 

7 chronic conditions and for whom primary 

8 care is provided by a specialist physician, 

9 were to contract with providers of primary 

10 care on their own without using health in11 surance. 

12 (B) REPORT.—Not later than 180 days 

13 after the first meeting of the Advisory Group, 

14 the Advisory Group shall submit a report to the 

15 Secretary of Health and Humans Services de16 tailing its recommendations. 

17 (b) MA PLANS.—Section 1852(a)(1) of the Social Se18 curity Act (42 U.S.C. 1395w–22(a)(1)) is amended— 

19 (1) in subparagraph (A), by inserting ‘‘and the 

20 patient flexibility and bundled payment requirements 

21 described in subparagraph (C)’’ after ‘‘under section 

22 1854(f)(1)(A))’’; and 

23 (2) by adding at the end the following new sub24 paragraph: 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
28 

•S 5633 IS

1 ‘‘(C) DIRECT PRIMARY CARE AND FLEXI2 BILITY PAYMENTS.— 

3 ‘‘(i) DIRECT PRIMARY CARE PAY4 MENTS.— 

5 ‘‘(I) IN GENERAL.—Beginning 

6 with plan years beginning on or after 

7 January 1, 2027, each Medicare Ad8 vantage plan shall allow enrollees to 

9 elect to receive a direct primary care 

10 benefit payment, described in sub11 clause (II), in lieu of receiving cov12 erage of primary care benefits (as de13 fined by the Secretary taking into ac14 count the recommendations of the Di15 rect Primary Care Payment Advisory 

16 Group established under section 6(a) 

17 of the Medicare Flex Fund Accounts 

18 and Flexible Benefits Act of 2024) 

19 under the Medicare Advantage plan. 

20 ‘‘(II) DIRECT PRIMARY CARE

21 BENEFIT PAYMENT.—The direct pri22 mary care benefit payment for an en23 rollee shall be— 

24 ‘‘(aa) equal to the amount of 

25 the average per capita savings to 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
29 

•S 5633 IS

1 the Medicare Advantage plan by 

2 not providing coverage of pri3 mary care benefits under such 

4 plan to such enrollee (as deter5 mined by the Secretary taking 

6 into account the recommenda7 tions of the Direct Primary Care 

8 Payment Advisory Group estab9 lished under section 6(a) of the 

10 Medicare Flex Fund Accounts 

11 and Flexible Benefits Act of 

12 2024); and 

13 ‘‘(bb) deposited into the 

14 Medicare flex fund account (as 

15 defined in section 530A of the 

16 Internal Revenue Code of 1986 

17 and referred to in this subpara18 graph as a ‘Medicare FFA’) of 

19 such enrollee. 

20 ‘‘(III) ELECTION.— 

21 ‘‘(aa) IN GENERAL.—Sub22 ject to item (bb), during the pe23 riod beginning on January 1 and 

24 ending on March 31 of each plan 

25 year, an enrollee may elect to reVerDate Sep 11 2014 22:41 Jan 28, 2025 Jkt 059200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 E:\BILLS\S5633.IS S5633

kjohnson on DSK7ZCZBW3PROD with $$_JOB
30 

•S 5633 IS

1 ceive the direct primary care ben2 efit payment for that year. 

3 ‘‘(bb) OTHER REQUIRE4 MENTS.— 

5 ‘‘(AA) FREQUENCY OF

6 CHANGE.—If an enrollee 

7 makes the election described 

8 in item (aa), the enrollee 

9 may elect to stop receiving 

10 the direct primary care ben11 efit payment and begin to 

12 receive primary care benefits 

13 under the Medicare Advan14 tage plan for the remainder 

15 of that calendar year. 

16 ‘‘(BB) CARRY OVER OF

17 ELECTION.—If an enrollee 

18 makes the election described 

19 in item (aa), the enrollee 

20 shall continue to receive the 

21 direct primary care benefit 

22 payment until the enrollee 

23 elects to receive primary 

24 care benefits under the 

25 Medicare Advantage plan for 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
31 

•S 5633 IS

1 the year during the period 

2 described in such item, the 

3 enrollee makes the election 

4 described in subitem (AA), 

5 or the enrollee changes 

6 Medicare Advantage plans. 

7 ‘‘(CC) CHANGING OF

8 MEDICARE ADVANTAGE

9 PLANS.—If an enrollee 

10 changes Medicare Advantage 

11 plans as described in 

12 subitem (BB), the enrollee 

13 may elect to receive the di14 rect primary care benefit 

15 payment or to receive pri16 mary care benefits under the 

17 Medicare Advantage plan for 

18 the remainder of the year. 

19 ‘‘(ii) FLEXIBILITY PAYMENTS FOR

20 SHOPPABLE SERVICES.— 

21 ‘‘(I) IN GENERAL.—Beginning 

22 with plan years beginning on or after 

23 January 1, 2027, each Medicare Ad24 vantage plan shall allow enrollees to 

25 receive a payment from such plan that 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
32 

•S 5633 IS

1 meets the requirements of subclause 

2 (II) and allows enrollees to receive 

3 treatment from a pre-approved alter4 nate provider. 

5 ‘‘(II) PAYMENT.—The payment 

6 described in subclause (I) shall— 

7 ‘‘(aa) be the same amount 

8 that would have been paid to an 

9 in-network provider and include 

10 any processing costs; and 

11 ‘‘(bb) be deposited in the 

12 Medicare FFA of the enrollee 

13 once a contract has been signed 

14 by the enrollee, the Medicare Ad15 vantage plan, and the alternative 

16 provider to provide treatment to 

17 the member. 

18 ‘‘(III) ALTERNATIVE PRO19 VIDERS.— 

20 ‘‘(aa) MENU OF OPTIONS.— 

21 Each Medicare Advantage plan 

22 may develop a list of pre-ap23 proved alternate providers and 

24 information regarding the price, 

25 treatment outcomes, and cusVerDate Sep 11 2014 22:41 Jan 28, 2025 Jkt 059200 PO 00000 Frm 00032 Fmt 6652 Sfmt 6201 E:\BILLS\S5633.IS S5633

kjohnson on DSK7ZCZBW3PROD with $$_JOB
33 

•S 5633 IS

1 tomer experience of each pre-ap2 proved alternate provider for cer3 tain treatments, procedures, and 

4 episodes of care. If a Medicare 

5 Advantage plan chooses to de6 velop such list, the Medicare Ad7 vantage plan shall provide such 

8 list to an enrollee upon the re9 quest of such enrollee. 

10 ‘‘(bb) PROVIDING THE MENU

11 TO THE ENROLLEE.—Each Medi12 care Advantage plan shall provide 

13 the list described in item (aa) be14 fore the enrollee requests such 

15 list if it could result in the en16 rollee receiving treatment for a 

17 lesser price. 

18 ‘‘(cc) NO COST FOR BEING

19 ON ALTERNATIVE TREATMENT

20 LOCATION LIST.—No Medicare 

21 Advantage plan shall charge a 

22 provider for being on a list de23 scribed in item (aa). 

24 ‘‘(IV) DEFINITION OF PRE-AP25 PROVED ALTERNATE PROVIDER.—For 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
34 

•S 5633 IS

1 the purposes of this clause, the term 

2 ‘pre-approved alternate provider’ 

3 means a provider of services or a sup4 plier— 

5 ‘‘(aa) located in the United 

6 States or a territory of the 

7 United States; 

8 ‘‘(bb) licensed by the State 

9 or territory in which the provider 

10 furnishes services; 

11 ‘‘(cc) willing to provide serv12 ices on a cash basis; and 

13 ‘‘(dd) that has received the 

14 review described in subclause (V). 

15 ‘‘(V) REVIEW OF SERVICES.—Be16 fore an enrollee has received treat17 ment by a pre-approved alternative 

18 provider, the Medicare Advantage 

19 plan shall review any contracts or doc20 uments relating to the treatment pro21 vided by such provider to ensure 

22 that— 

23 ‘‘(aa) any enrollee who elects 

24 to receive treatment by the pro25 vider will receive appropriate 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
35 

•S 5633 IS

1 health quality and the desired 

2 treatment outcome; and 

3 ‘‘(bb) to protect the enrollee 

4 from hidden fees or surprise bills, 

5 the cost of the service quoted by 

6 the pre-approved alternative pro7 vider will be the total price paid 

8 by the enrollee. 

9 ‘‘(iii) RULE OF CONSTRUCTION.— 

10 Nothing in this subparagraph shall be con11 strued to limit any responsibility of a 

12 Medicare Advantage plan under this part, 

13 to reduce the actuarial value of such a 

14 plan, or to change any network adequacy 

15 requirement.’’. 

16 (c) PRESCRIPTION DRUG COVERAGE.—Section 

17 1860D–4 of the Social Security Act (42 U.S.C. 1395w– 

18 104) is amended by adding at the end the following new 

19 subsection: 

20 ‘‘(p) PHARMACEUTICAL SAVINGS.— 

21 ‘‘(1) IN GENERAL.—In the case of a covered 

22 part D drug on the formulary of a prescription drug 

23 plan or an MA–PD plan, the plan shall, if requested 

24 by an enrollee of such plan, provide such enrollee 

25 with a payment described in paragraph (2) in lieu 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
36 

•S 5633 IS

1 of the plan paying for such covered part D drug 

2 under the plan. 

3 ‘‘(2) PAYMENT.—The payment described in 

4 paragraph (1) shall be an amount equal to the 

5 amount the prescription drug plan or MA–PD plan 

6 would reimburse a preferred pharmacy for such cov7 ered part D drug plus any fees that would be paid 

8 to such plan (or a subsidiary of such plan) by the 

9 manufacturer of such covered part D drug.’’. 

10 (d) RULE FOR PATIENT DRIVEN BENEFIT FLEXI11 BILITY SPENDING REGARDING DEDUCTIBLES AND OUT12 OF-POCKET SPENDING.—Section 1859 of the Social Secu13 rity Act (42 U.S.C. 1395w–28) is amended by adding at 

14 the end the following new subsection: 

15 ‘‘(j) RULE FOR PATIENT DRIVEN BENEFIT FLEXI16 BILITY SPENDING REGARDING DEDUCTIBLES AND OUT17 OF-POCKET SPENDING.—Any amount spent by an en18 rollee from payments made by an MA plan under section 

19 1852(a)(1)(C) or 1860D–4(p) shall not count towards any 

20 deductible or maximum limitation on out-of-pocket ex21 penses applicable to such MA plan.’’. 

Æ 


kjohnson on DSK7ZCZBW3PROD with $$_JOB