I 

116TH CONGRESS 

2D SESSION H. R. 7877 

To amend title XVIII of the Social Security Act to provide Medicare part 

D beneficiaries with certain offset payments and reduce the growth 

rate of the Medicare part D out-of-pocket cost threshold, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 30, 2020 

Mr. KATKO (for himself and Mrs. MURPHY of Florida) 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 

Medicare part D beneficiaries with certain offset payments and reduce the growth rate of the Medicare part 

D out-of-pocket cost threshold, 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 ‘‘Lowering Drug Costs 

5 for Seniors Act of 2020’’. 


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1 SEC. 2. GROWTH RATE OF MEDICARE PART D OUT-OF2 POCKET COST THRESHOLD. 

3 (a) PROVIDING MEDICARE PART D BENEFICIARIES

4 WITH CERTAIN 2020 OFFSET PAYMENTS.—Section 

5 1860D–2(b)(4) of the Social Security Act (42 U.S.C. 

6 1395w–102(b)(4)) is amended by adding at the end the 

7 following new subparagraph: 

8 ‘‘(F) 2020 OFFSET PAYMENTS.— 

9 ‘‘(i) IN GENERAL.—Subject to clause 

10 (iv), the Secretary shall provide for pay11 ment from the Medicare Prescription Drug 

12 Account as follows: 

13 ‘‘(I) In the case of a specified in14 dividual (as defined in clause (ii)(I)) 

15 who as of the last day of a calendar 

16 quarter in 2020 has incurred costs for 

17 covered part D drugs so that the indi18 vidual has exceeded the annual out-of19 pocket threshold applied under sub20 paragraph (B)(i)(V) for 2020, pay21 ment to the individual by not later 

22 than 15th day of the third month fol23 lowing the end of such quarter of the 

24 amount by which such threshold so 

25 applied exceeded the target threshold 

26 for 2020. 


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1 ‘‘(II) In the case of a specified 

2 individual who is not described in sub3 clause (I) and who as of the last day 

4 of 2020 has incurred costs for covered 

5 part D drugs so that the individual 

6 has exceeded the target threshold for 

7 2020, payment to the individual by 

8 not later than December 31, 2021, of 

9 the amount by which such incurred 

10 costs exceeded the target threshold for 

11 2020. 

12 ‘‘(ii) DEFINITIONS.—For purposes of 

13 this subparagraph: 

14 ‘‘(I) SPECIFIED INDIVIDUAL.— 

15 The term ‘specified individual’ means 

16 an individual who— 

17 ‘‘(aa) is enrolled in a pre18 scription drug plan or an MA– 

19 PD plan; 

20 ‘‘(bb) is not enrolled in a 

21 qualified retiree prescription drug 

22 plan; and 

23 ‘‘(cc) is not entitled to an in24 come-related subsidy under sec25 tion 1860D–14(a). 


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1 ‘‘(II) TARGET THRESHOLD FOR

2 2020.—The term ‘target threshold for 

3 2020’ means the annual out-of-pocket 

4 threshold that would have been ap5 plied under subparagraph (B)(i) for 

6 2020 if such threshold had been de7 termined in accordance with subclause 

8 (IV) of such subparagraph instead of 

9 subclause (V) of such subparagraph. 

10 ‘‘(iii) NOTIFICATION.—In the case of 

11 any specified individual who during 2020 

12 has incurred costs for covered part D 

13 drugs so that the individual has exceeded 

14 the target threshold for 2020, the Sec15 retary shall, not later than September 30, 

16 2021, provide to such individual a notifica17 tion informing such individual of such indi18 vidual’s right to a payment described in 

19 clause (i) and the estimated timing of such 

20 payment. 

21 ‘‘(iv) CLARIFICATION.—The Secretary 

22 shall provide only 1 payment under this 

23 subparagraph with respect to any indi24 vidual. 


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1 ‘‘(v) IMPLEMENTATION.—The Sec2 retary may implement this subparagraph 

3 by program instruction or otherwise.’’. 

4 (b) REDUCED GROWTH RATE FOR 2021 OF MEDI5 CARE PART D OUT-OF-POCKET COST THRESHOLD.—Sec6 tion 1860D–2(b)(4)(B)(i) of the Social Security Act (42 

7 U.S.C. 1395w–102(b)(4)(B)(i)) is amended— 

8 (1) in subclause (V), by striking at the end 

9 ‘‘or’’; 

10 (2) by redesignating subclause (VI) as sub11 clause (VIII); and 

12 (3) by inserting after subclause (V) the fol13 lowing new subclauses: 

14 ‘‘(VI) for 2021, is equal to the 

15 amount that would have been applied 

16 under this subparagraph for 2020 if 

17 such amount had been determined in 

18 accordance with subclause (IV) in19 stead of subclause (V), increased by 

20 the lesser of— 

21 ‘‘(aa) the annual percentage 

22 increase described in paragraph 

23 (7) for 2021, plus 2 percentage 

24 points; or 


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1 ‘‘(bb) the annual percentage 

2 increase described in paragraph 

3 (6) for 2021; 

4 ‘‘(VII) for 2022, is equal to the 

5 amount that would have been applied 

6 under this subparagraph for 2022 if 

7 the amendments made by section 

8 1101(d)(1) of the Health Care and 

9 Education Reconciliation Act of 2010 

10 and by section 2 of the Lowering 

11 Drug Costs for Seniors Act of 2020 

12 had not been enacted; or’’. 

Æ 


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