II

106TH CONGRESS

2D SESSION S. 3017

To amend the Social Security Act to establish an outpatient prescription

drug assistance program for low-income medicare beneficiaries and medicare beneficiaries with high drug costs.

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 7, 2000

Mr. ROTH (for himself, Mr. JEFFORDS, Mr. MURKOWSKI, Mr. CAMPBELL, Mr.

STEVENS, and Mr. FRIST) introduced the following bill; which was read

twice and referred to the Committee on Finance

A BILL

To amend the Social Security Act to establish an outpatient

prescription drug assistance program for low-income

medicare beneficiaries and medicare beneficiaries with

high drug costs.

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 Temporary

5 Drug Assistance Act’’.
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1 SEC. 2. OUTPATIENT PRESCRIPTION DRUG ASSISTANCE

2 PROGRAM.

3 (a) ESTABLISHMENT.—The Social Security Act (42

4 U.S.C. 301 et seq.) is amended by adding at the end the

5 following new title:

6 ‘‘TITLE XXII—OUTPATIENT PRESCRIPTION

7 DRUG ASSISTANCE PROGRAM

8 ‘‘SEC. 2201. PURPOSE; OUTPATIENT PRESCRIPTION DRUG

9 ASSISTANCE PLANS.

10 ‘‘(a) PURPOSE.—The purpose of this title is to pro11 vide funds to States to enable States, individually or in

12 a group, to establish a program, separate from the med13 icaid program under title XIX, to provide assistance to

14 low-income medicare beneficiaries (as defined in section

15 2202(b)) and, at State option, medicare beneficiaries with

16 high drug costs (as defined in section 2202(c)) to obtain

17 coverage for outpatient prescription drugs.

18 ‘‘(b) OUTPATIENT PRESCRIPTION DRUG ASSISTANCE

19 PLAN REQUIRED.—A State may not receive payments

20 under section 2205 unless the State, individually or as

21 part of a group of States, submits in writing to the Sec22 retary an outpatient prescription drug assistance plan

23 under section 2206(a)(1) that—

24 ‘‘(1) describes how the State or group of States

25 intends to use the funds provided under this title to

26 provide outpatient prescription drug assistance to
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1 low-income medicare beneficiaries and, if applicable,

2 medicare beneficiaries with high drug costs con3 sistent with the provisions of this title;

4 ‘‘(2) includes a description of the budget for the

5 plan (updated periodically as necessary) and details

6 on the planned use of funds, the sources of the non7 Federal share of plan expenditures, and any require8 ments for cost-sharing by beneficiaries;

9 ‘‘(3) describes the procedures to be used to en10 sure that the outpatient prescription drug assistance

11 provided to low-income medicare beneficiaries and, if

12 applicable, medicare beneficiaries with high drug

13 costs under the plan does not supplant coverage for

14 outpatient prescription drugs available to such bene15 ficiaries under group health plans; and

16 ‘‘(4) has been approved by the Secretary under

17 section 2206(a)(2).

18 ‘‘(c) ENTITLEMENT.—Subject to subsection (d)(2),

19 this title constitutes budget authority in advance of appro20 priations Acts and represents the obligation of the Federal

21 Government to provide for the payment to States, groups

22 of States, and contractors described in section

23 2209(a)(2)(A), of amounts provided under section 2204.

24 ‘‘(d) PERIOD OF APPLICABILITY.—
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1 ‘‘(1) IN GENERAL.—No State, group of States,

2 or contractor described in section 2209(a)(2)(A),

3 may receive payments under section 2205 for out4 patient prescription drug assistance provided for pe5 riods beginning before October 1, 2000, or after

6 September 30, 2004.

7 ‘‘(2) MEDICARE REFORM.—If medicare reform

8 legislation that includes coverage for outpatient pre9 scription drugs is enacted during the period that be10 gins on October 1, 2000, and ends on September 30,

11 2004, this title shall be repealed upon the effective

12 date of such legislation, and no State, group of

13 States, or contractor described in section

14 2209(a)(2)(A) shall be entitled to receive payments

15 for any outpatient prescription drug assistance pro16 vided on or after such date.

17 ‘‘SEC. 2202. BENEFICIARY ELIGIBILITY.

18 ‘‘(a) ELIGIBILITY.—

19 ‘‘(1) IN GENERAL.—In order for a State (indi20 vidually or as part of a group of States) to receive

21 payments under section 2205 with respect to an out22 patient prescription drug assistance program, the

23 program must provide, subject to the availability of

24 funds, outpatient prescription drug assistance to

25 each individual who—
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1 ‘‘(A) resides in the State;

2 ‘‘(B) applies for such assistance; and

3 ‘‘(C) establishes that the individual is—

4 ‘‘(i) a low-income medicare beneficiary

5 (as defined in subsection (b)); or

6 ‘‘(ii) at the option of the State, a

7 medicare beneficiary with high drug costs

8 (as defined in subsection (c)).

9 ‘‘(2) RESIDENCY RULES.—In applying para10 graph (1), residency rules similar to the residency

11 rules applicable to the State plan under title XIX

12 shall apply.

13 ‘‘(b) LOW-INCOME MEDICARE BENEFICIARY DE14 FINED.—

15 ‘‘(1) IN GENERAL.—In this title, except as pro16 vided in section 2209(a)(2)(B), the term ‘low-income

17 medicare beneficiary’ means an individual who—

18 ‘‘(A) is entitled to benefits under part A of

19 title XVIII or enrolled under part B of such

20 title, including an individual enrolled in a

21 Medicare+Choice plan under part C of such

22 title;

23 ‘‘(B) subject to subsection (d), is not enti24 tled to medical assistance with respect to pre25 scribed drugs under title XIX or under a waiver
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1 under section 1115 of the requirements of such

2 title;

3 ‘‘(C) is determined to have family income

4 that does not exceed a percentage of the pov5 erty line for a family of the size involved speci6 fied by the State that, subject to paragraph (2),

7 may not exceed 175 percent; and

8 ‘‘(D) at the option of the State, is deter9 mined to have resources that do not exceed a

10 level specified by the State.

11 ‘‘(2) STATE-ONLY DRUG ASSISTANCE PRO12 GRAMS.—In the case of a State that has a State13 based drug assistance program described in section

14 2203(e) that provides outpatient prescription drug

15 coverage for individuals described in paragraph

16 (1)(A) who have family income up to or exceeding

17 175 percent of the poverty line, the State may speci18 fy a percentage of the poverty line under paragraph

19 (1)(C) that exceeds the income eligibility level speci20 fied by the State for such program but does not ex21 ceed 50 percentage points above such income eligi22 bility level.

23 ‘‘(c) MEDICARE BENEFICIARY WITH HIGH DRUG

24 COSTS DEFINED.—
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1 ‘‘(1) IN GENERAL.—In this title, except as pro2 vided in section 2209(a)(2)(C), the term ‘medicare

3 beneficiary with high drug costs’ means an

4 individual—

5 ‘‘(A) who satisfies the requirements of sub6 paragraphs (A) and (B) of subsection (b)(1);

7 ‘‘(B) whose family income exceeds the per8 centage of the poverty line specified by the

9 State in accordance with subsection (b)(1)(C);

10 ‘‘(C) at the option of the State, whose re11 sources exceed a level (if any) specified by the

12 State in accordance with subsection (b)(1)(D);

13 and

14 ‘‘(D) who has out-of-pocket expenses for

15 outpatient prescription drugs and biologicals

16 (including insulin and insulin supplies) for

17 which outpatient prescription drug assistance is

18 available under this title that exceed such

19 amount as the State specifies in accordance

20 with paragraph (2).

21 ‘‘(2) DETERMINATION OF OUT-OF-POCKET EX22 PENSES.—A State that elects to provide outpatient

23 prescription drug assistance to an individual de24 scribed in paragraph (1) shall provide the Secretary

25 with the methodology and standards used to deter-
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1 mine the individual’s eligibility under subparagraph

2 (D) of such paragraph.

3 ‘‘(d) ACCESS FOR MEDICAID EXPANSION STATES.—

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

5 provision of this title, with respect to any State that,

6 as of the date of enactment of this title, has made

7 outpatient prescription drug coverage for individuals

8 described in paragraph (2) available through the

9 State medicaid program under title XIX under a

10 section 1115 waiver, the Secretary, in consultation

11 with such State, shall establish procedures under

12 which the State shall be able to receive payments

13 from the allotment made available under section

14 2204 for such State for a fiscal year for purposes

15 of offsetting the costs of making such coverage avail16 able to such individuals.

17 ‘‘(2) INDIVIDUALS DESCRIBED.—Individuals de18 scribed in this paragraph are individuals who are—

19 ‘‘(A) entitled to benefits under part A of

20 title XVIII or enrolled under part B of such

21 title, including an individual enrolled in a

22 Medicare+Choice plan under part C of such

23 title; and

24 ‘‘(B) eligible for outpatient prescription

25 drug coverage only, under a State medicaid pro-
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1 gram under title XIX as a result of a section

2 1115 waiver.

3 ‘‘(e) INDIVIDUAL NONENTITLEMENT.—Nothing in

4 this title shall be construed as providing an individual with

5 an entitlement to outpatient prescription drug assistance

6 provided under this title.

7 ‘‘SEC. 2203. COVERAGE REQUIREMENTS.

8 ‘‘(a) REQUIRED SCOPE OF COVERAGE.—

9 ‘‘(1) IN GENERAL.—The outpatient prescription

10 drug assistance provided under the plan may consist

11 of any of the following:

12 ‘‘(A) BENCHMARK COVERAGE.—Outpatient

13 prescription drug coverage that is equivalent to

14 the outpatient prescription drug coverage in a

15 benchmark benefit package described in sub16 section (b).

17 ‘‘(B) AGGREGATE ACTUARIAL VALUE

18 EQUIVALENT TO BENCHMARK PACKAGE.—Out19 patient prescription drug coverage that has an

20 aggregate actuarial value that is at least equiv21 alent to one of the benchmark benefit packages.

22 ‘‘(C) EXISTING COMPREHENSIVE STATE23 BASED COVERAGE.—Outpatient prescription

24 drug coverage under an existing State-based

25 program, described in subsection (e).
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1 ‘‘(D) SECRETARY-APPROVED COVERAGE.—

2 Any other outpatient prescription drug coverage

3 that the Secretary determines, upon application

4 by a State or group of States, provides appro5 priate outpatient prescription drug coverage for

6 the population of medicare beneficiaries pro7 posed to be provided such coverage.

8 ‘‘(2) CONSISTENT DESIGN.—A State or group

9 of States may only select one of the options de10 scribed in paragraph (1) (and, if the State or group

11 chooses to provide outpatient prescription drug cov12 erage that is equivalent to the outpatient prescrip13 tion drug coverage in a benchmark benefit package,

14 only one of the benchmark benefit package options

15 described in subsection (b)) in order to provide out16 patient prescription drug assistance in a uniform

17 manner for the population of medicare beneficiaries

18 provided such coverage.

19 ‘‘(b) BENCHMARK BENEFIT PACKAGES.—The bench20 mark benefit packages are as follows:

21 ‘‘(1) MEDICAID OUTPATIENT PRESCRIPTION

22 DRUG COVERAGE.—In the case of—

23 ‘‘(A) a State, the outpatient prescription

24 drug coverage provided under the State med25 icaid plan under title XIX; or
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1 ‘‘(B) a group of States, the outpatient pre2 scription drug coverage provided under the

3 State medicaid plan under such title of one of

4 the States in the group, as identified in the out5 patient prescription drug assistance plan.

6 ‘‘(2) FEHBP-EQUIVALENT OUTPATIENT PRE7 SCRIPTION DRUG COVERAGE.—The outpatient pre8 scription drug coverage provided under the Standard

9 Option Blue Cross and Blue Shield Service Benefit

10 Plan described in and offered under section 8903(1)

11 of title 5, United States Code.

12 ‘‘(3) STATE EMPLOYEE OUTPATIENT PRESCRIP13 TION DRUG COVERAGE.—In the case of—

14 ‘‘(A) a State, the outpatient prescription

15 drug coverage provided under a health benefits

16 coverage plan that is offered and generally

17 available to State employees in the State in18 volved; or

19 ‘‘(B) a group of States, the outpatient pre20 scription drug coverage provided under a health

21 benefits coverage plan that is offered and gen22 erally available to State employees in one of the

23 States in the group, as identified in the out24 patient prescription drug assistance plan.
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1 ‘‘(4) OUTPATIENT PRESCRIPTION DRUG COV2 ERAGE OFFERED THROUGH LARGEST HMO.—In the

3 case of—

4 ‘‘(A) a State, the outpatient prescription

5 drug coverage provided under a health insur6 ance coverage plan that is offered by a health

7 maintenance organization (as defined in section

8 2791(b)(3) of the Public Health Service Act)

9 and has the largest insured commercial, non10 medicaid enrollment of covered lives of such

11 coverage plans offered by such a health mainte12 nance organization in the State involved; or

13 ‘‘(B) a group of States, the outpatient pre14 scription drug coverage provided under a health

15 insurance coverage plan that is offered by a

16 health maintenance organization (as defined in

17 section 2791(b)(3) of the Public Health Service

18 Act) and has the largest insured commercial,

19 nonmedicaid enrollment of covered lives of such

20 coverage plans offered by such a health mainte21 nance organization in one of the States in22 volved.

23 ‘‘(c) DETERMINATION OF ACTUARIAL VALUE OF

24 COVERAGE.—
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1 ‘‘(1) IN GENERAL.—The actuarial value of out2 patient prescription drug coverage offered under

3 benchmark benefit packages and the outpatient pre4 scription drug assistance plan shall be set forth in

5 an opinion in a report that has been prepared—

6 ‘‘(A) by an individual who is a member of

7 the American Academy of Actuaries;

8 ‘‘(B) using generally accepted actuarial

9 principles and methodologies;

10 ‘‘(C) using a standardized set of utilization

11 and price factors;

12 ‘‘(D) using a standardized population that

13 is representative of the population to be covered

14 under the outpatient prescription drug assist15 ance plan;

16 ‘‘(E) applying the same principles and fac17 tors in comparing the value of different cov18 erage;

19 ‘‘(F) without taking into account any dif20 ferences in coverage based on the method of de21 livery or means of cost control or utilization

22 used; and

23 ‘‘(G) taking into account the ability of a

24 State or group of States to reduce benefits by

25 taking into account the increase in actuarial
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1 value of benefits coverage offered under the

2 outpatient prescription drug assistance plan

3 that results from the limitations on cost-sharing

4 under such coverage.

5 ‘‘(2) REQUIREMENT.—The actuary preparing

6 the opinion shall select and specify in the report the

7 standardized set and population to be used under

8 subparagraphs (C) and (D) of paragraph (1).

9 ‘‘(d) PROHIBITED COVERAGE.—Nothing in this sec10 tion shall be construed as requiring any outpatient pre11 scription drug coverage offered under the plan to provide

12 coverage for an outpatient prescription drug for which

13 payment is prohibited under this title, notwithstanding

14 that any benchmark benefit package includes coverage for

15 such an outpatient prescription drug.

16 ‘‘(e) DESCRIPTION OF EXISTING COMPREHENSIVE

17 STATE-BASED COVERAGE.—

18 ‘‘(1) IN GENERAL.—A program described in

19 this paragraph is an outpatient prescription drug

20 coverage program for individuals who are entitled to

21 benefits under part A of title XVIII or enrolled

22 under part B of such title, including an individual

23 enrolled in a Medicare+Choice plan under part C of

24 such title, that—
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1 ‘‘(A) is administered or overseen by the

2 State and receives funds from the State;

3 ‘‘(B) was offered as of the date of the en4 actment of this title;

5 ‘‘(C) does not receive or use any Federal

6 funds; and

7 ‘‘(D) is certified by the Secretary as pro8 viding outpatient prescription drug coverage

9 that satisfies the scope of coverage required

10 under subparagraph (A), (B), or (D) of sub11 section (a)(1).

12 ‘‘(2) MODIFICATIONS.—A State may modify a

13 program described in paragraph (1) from time to

14 time so long as it does not reduce the actuarial value

15 (evaluated as of the time of the modification) of the

16 outpatient prescription drug coverage under the pro17 gram below the lower of—

18 ‘‘(A) the actuarial value of the coverage

19 under the program as of the date of enactment

20 of this title; or

21 ‘‘(B) the actuarial value described in sub22 section (a)(1)(B).

23 ‘‘(f) BENEFICIARY PREMIUMS AND COST-SHAR24 ING.—

25 ‘‘(1) DESCRIPTION; GENERAL CONDITIONS.—
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1 ‘‘(A) DESCRIPTION.—

2 ‘‘(i) IN GENERAL.—An outpatient pre3 scription drug assistance plan shall include

4 a description, consistent with this sub5 section, of the amount of any premiums or

6 cost-sharing imposed under the plan.

7 ‘‘(ii) PUBLIC SCHEDULE OF

8 CHARGES.—Any premium or cost-sharing

9 described under clause (i) shall be imposed

10 under the plan pursuant to a public sched11 ule.

12 ‘‘(B) PROTECTION FOR BENEFICIARIES.—

13 The outpatient prescription drug assistance

14 plan may only vary premiums and cost-sharing

15 based on the family income of low-income medi16 care beneficiaries and, if applicable, medicare

17 beneficiaries with high drug costs, in a manner

18 that does not favor such beneficiaries with high19 er income over beneficiaries with low-income.

20 ‘‘(2) LIMITATIONS ON PREMIUMS AND COST21 SHARING.—

22 ‘‘(A) NO PREMIUMS OR COST-SHARING FOR

23 BENEFICIARIES WITH INCOME BELOW 100 PER24 CENT OF POVERTY LINE.—In the case of a low25 income medicare beneficiary whose family in-
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1 come does not exceed 100 percent of the pov2 erty line, the outpatient prescription drug as3 sistance plan may not impose any premium or

4 cost-sharing.

5 ‘‘(B) OTHER BENEFICIARIES.—For low-in6 come medicare beneficiaries not described in

7 subparagraph (A) and, if applicable, medicare

8 beneficiaries with high drug costs, any pre9 miums or cost-sharing imposed under the out10 patient prescription drug assistance plan may

11 be imposed, subject to paragraph (1)(B), on a

12 sliding scale related to income, except that the

13 total annual aggregate of such premiums and

14 cost-sharing with respect to all such bene15 ficiaries in a family under this title may not ex16 ceed 5 percent of such family’s income for the

17 year involved.

18 ‘‘(g) RESTRICTION ON APPLICATION OF PRE19 EXISTING CONDITION EXCLUSIONS.—The outpatient pre20 scription drug assistance plan shall not permit the imposi21 tion of any preexisting condition exclusion for covered ben22 efits under the plan and may not discriminate in the pric23 ing of premiums under such plan because of health status,

24 claims experience, receipt of health care, or medical condi25 tion.
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1 ‘‘SEC. 2204. ALLOTMENTS.

2 ‘‘(a) APPROPRIATION.—

3 ‘‘(1) IN GENERAL.—For the purpose of pro4 viding allotments under this section to States, there

5 is appropriated, out of any money in the Treasury

6 not otherwise appropriated—

7 ‘‘(A) for fiscal year 2001, $1,300,000,000;

8 ‘‘(B) for fiscal year 2002, $4,600,000,000;

9 ‘‘(C) for fiscal year 2003, $9,700,000,000;

10 and

11 ‘‘(D) for fiscal year 2004,

12 $13,000,000,000.

13 ‘‘(2) AVAILABILITY.—Amounts appropriated

14 under paragraph (1) shall only be available for pro15 viding the allotments described in such paragraph

16 during the fiscal year for which such amounts are

17 appropriated. Any amounts that have not been obli18 gated by the Secretary for the purposes of making

19 payments from such allotments under section 2205,

20 or under contracts entered into under section

21 2209(b)(2)(B), on or before September 30 of fiscal

22 year 2001, 2002, 2003, or 2004 (as applicable),

23 shall be returned to the Treasury.

24 ‘‘(b) ALLOTMENTS TO 50 STATES AND DISTRICT OF

25 COLUMBIA.—
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1 ‘‘(1) IN GENERAL.—Subject to paragraph (3),

2 of the amount available for allotment under sub3 section (a) for a fiscal year, reduced by the amount

4 of allotments made under subsection (c) for the fis5 cal year, the Secretary shall allot to each State

6 (other than a State described in such subsection)

7 with an outpatient prescription drug assistance plan

8 approved under this title the same proportion as the

9 ratio of—

10 ‘‘(A) the number of medicare beneficiaries

11 with family income that does not exceed 175

12 percent of the poverty line residing in the State

13 for the fiscal year; to

14 ‘‘(B) the total number of such beneficiaries

15 residing in all such States.

16 ‘‘(2) DETERMINATION OF NUMBER OF MEDI17 CARE BENEFICIARIES WITH INCOME THAT DOES NOT

18 EXCEED 175 PERCENT OF POVERTY.—For purposes

19 of paragraph (1), a determination of the number of

20 medicare beneficiaries with family income that does

21 not exceed 175 percent of the poverty line residing

22 in a State for the calendar year in which such fiscal

23 year begins shall be made on the basis of the arith24 metic average of the number of such medicare bene25 ficiaries, as reported and defined in the 5 most re-
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1 cent March supplements to the Current Population

2 Survey of the Bureau of the Census before the be3 ginning of the fiscal year.

4 ‘‘(3) MINIMUM ALLOTMENT.—In no case shall

5 the amount of the allotment under this subsection

6 for one of the 50 States or the District of Columbia

7 for a fiscal year be less than an amount equal to 0.5

8 percent of the amount provided for allotments under

9 subsection (a) for that fiscal year (reduced by the

10 amount of allotments made under subsection (c) for

11 the fiscal year). To the extent that the application

12 of the previous sentence results in an increase in the

13 allotment to a State or the District of Columbia

14 above the amount otherwise provided, the allotments

15 for the other States and the District of Columbia

16 under this subsection shall be reduced in a pro rata

17 manner (but not below the minimum allotment de18 scribed in such preceding sentence) so that the total

19 of such allotments in a fiscal year does not exceed

20 the amount otherwise provided for allotment under

21 subsection (a) for that fiscal year (as so reduced).

22 ‘‘(c) ALLOTMENTS TO TERRITORIES.—

23 ‘‘(1) IN GENERAL.—Of the amount available for

24 allotment under subsection (a) for a fiscal year, the

25 Secretary shall allot 0.25 percent among each of the
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1 commonwealths and territories described in para2 graph (3) in the same proportion as the percentage

3 specified in paragraph (2) for such commonwealth or

4 territory bears to the sum of such percentages for all

5 such commonwealths or territories so described.

6 ‘‘(2) PERCENTAGE.—The percentage specified

7 in this paragraph for—

8 ‘‘(A) Puerto Rico is 91.6 percent;

9 ‘‘(B) Guam is 3.5 percent;

10 ‘‘(C) the United States Virgin Islands is

11 2.6 percent;

12 ‘‘(D) American Samoa is 1.2 percent; and

13 ‘‘(E) the Northern Mariana Islands is 1.1

14 percent.

15 ‘‘(3) COMMONWEALTHS AND TERRITORIES.—A

16 commonwealth or territory described in this para17 graph is any of the following if it has an outpatient

18 prescription drug assistance plan approved under

19 this title:

20 ‘‘(A) Puerto Rico.

21 ‘‘(B) Guam.

22 ‘‘(C) The United States Virgin Islands.

23 ‘‘(D) American Samoa.

24 ‘‘(E) The Northern Mariana Islands.
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1 ‘‘(d) TRANSFER OF CERTAIN ALLOTMENTS AND

2 PORTIONS OF ALLOTMENTS.—

3 ‘‘(1) TRANSFER AND REDISTRIBUTION.—

4 ‘‘(A) IN GENERAL.—Subject to subpara5 graph (B), not later than 30 days after the date

6 described in paragraph (2)—

7 ‘‘(i) 90 percent of the allotment deter8 mined for a fiscal year under subsection

9 (b) or (c) for a State shall be transferred

10 and made available in such fiscal year to

11 the Secretary, acting through the Adminis12 trator of the Health Care Financing Ad13 ministration, for purposes of carrying out

14 the default program established under sec15 tion 2209; and

16 ‘‘(ii) 10 percent of such allotment

17 shall be redistributed in accordance with

18 subsection (e).

19 ‘‘(B) APPLICABILITY.—Subparagraph (A)

20 shall not apply if, not later than the date de21 scribed in paragraph (2) for such fiscal year, a

22 State submits a plan or is part of a group of

23 States that submits a plan to the Secretary that

24 the Secretary finds meets the requirements of

25 section 2201(b).
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1 ‘‘(2) DATE DESCRIBED.—The date described in

2 this paragraph is—

3 ‘‘(A) in the case of fiscal year 2001, De4 cember 31, 2000; and

5 ‘‘(B) in the case of fiscal year 2002, 2003,

6 or 2004, September 1 of the fiscal year pre7 ceding such fiscal year.

8 ‘‘(e) REDISTRIBUTION OF PORTION OF ALLOT9 MENTS.—With respect to a fiscal year, not later than 30

10 days after the date described in subsection (d)(2) for such

11 fiscal year, the Secretary shall redistribute the total

12 amount made available for redistribution for such fiscal

13 year under subsection (d)(1)(A)(ii) to each State that sub14 mits a plan or is part of a group of States that submits

15 a plan to the Secretary that the Secretary finds meets the

16 requirements of this title. Such amount shall be redistrib17 uted in the same manner as allotments are determined

18 under subsections (b) and (c) and shall be available only

19 to the extent consistent with subsection (a)(2).

20 ‘‘SEC. 2205. PAYMENTS TO STATES.

21 ‘‘(a) IN GENERAL.—Subject to the succeeding provi22 sions of this section, the Secretary shall pay to each State

23 with a plan approved under section 2206(a)(2) (individ24 ually or as part of a group of States) from the State’s

25 allotment under section 2204, an amount for each quarter
24

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1 equal to the applicable percentage of expenditures in the

2 quarter—

3 ‘‘(1) for outpatient prescription drug assistance

4 under the plan for low-income medicare beneficiaries

5 and, if applicable, medicare beneficiaries with high

6 drug costs in the form of providing coverage for out7 patient prescription drugs that meets the require8 ments of section 2203; and

9 ‘‘(2) only to the extent permitted consistent

10 with subsection (c), for reasonable costs incurred to

11 administer the plan.

12 ‘‘(b) APPLICABLE PERCENTAGE.—For purposes of

13 subsection (a), the applicable percentage is—

14 ‘‘(1) for low-income medicare beneficiaries with

15 family incomes that do not exceed 135 percent of

16 the poverty line, 100 percent; and

17 ‘‘(2) for all other low-income medicare bene18 ficiaries and for medicare beneficiaries with high

19 drug costs, the enhanced FMAP (as defined in sec20 tion 2105(b)).

21 ‘‘(c) LIMITATION ON PAYMENTS FOR CERTAIN EX22 PENDITURES.—

23 ‘‘(1) GENERAL LIMITATIONS.—Funds provided

24 to a State or group of States under this title shall

25 only be used to carry out the purposes of this title.
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1 ‘‘(2) ADMINISTRATIVE EXPENDITURES.—

2 ‘‘(A) IN GENERAL.—Subject to subpara3 graph (B), payment shall not be made under

4 subsection (a) for expenditures described in

5 subsection (a)(2) for a fiscal year to the extent

6 the total of such expenditures (for which pay7 ment is made under such subsection) exceeds

8 10 percent of the total expenditures described

9 in subsection (a)(1) made by—

10 ‘‘(i) in the case of a State that is not

11 part of a group of States, the State for

12 such fiscal year; and

13 ‘‘(ii) in the case of a group of States,

14 the group for such fiscal year.

15 ‘‘(B) SPECIAL RULE.—With respect to the

16 first fiscal year that a State or group of States

17 provides outpatient prescription drug assistance

18 under a plan approved under this title, the 10

19 percent limitation described in subparagraph

20 (A) shall be applied—

21 ‘‘(i) in the case of a State that is not

22 part of a group of States, to the allotment

23 available for such State for such fiscal

24 year; and
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1 ‘‘(ii) in the case of a group of States,

2 to the aggregate of the State allotments

3 available for all the States in such group

4 for such fiscal year.

5 ‘‘(3) USE OF NON-FEDERAL FUNDS FOR STATE

6 MATCHING REQUIREMENT.—Amounts provided by

7 the Federal Government, or services assisted or sub8 sidized to any significant extent by the Federal Gov9 ernment, may not be included in determining the

10 amount of the non-Federal share of plan expendi11 tures required under the plan.

12 ‘‘(4) OFFSET OF RECEIPTS ATTRIBUTABLE TO

13 PREMIUMS OR COST-SHARING.—For purposes of sub14 section (a), the amount of the expenditures under

15 the plan shall be reduced by the amount of any pre16 miums or cost-sharing received by a State.

17 ‘‘(5) PREVENTION OF DUPLICATIVE PAY18 MENTS.—

19 ‘‘(A) OTHER HEALTH PLANS.—No pay20 ment shall be made under this section for ex21 penditures for outpatient prescription drug as22 sistance provided under an outpatient prescrip23 tion drug assistance plan to the extent that a

24 private insurer (as defined by the Secretary by

25 regulation and including a group health plan, a
27

•S 3017 IS

1 service benefit plan, and a health maintenance

2 organization) would have been obligated to pro3 vide such assistance but for a provision of its

4 insurance contract which has the effect of lim5 iting or excluding such obligation because the

6 beneficiary is eligible for or is provided out7 patient prescription drug assistance under the

8 plan.

9 ‘‘(B) OTHER FEDERAL GOVERNMENTAL

10 PROGRAMS.—Except as otherwise provided by

11 law, no payment shall be made under this sec12 tion for expenditures for outpatient prescription

13 drug assistance provided under an outpatient

14 prescription drug assistance plan to the extent

15 that payment has been made or can reasonably

16 be expected to be made promptly (as deter17 mined in accordance with regulations) under

18 any other federally operated or financed health

19 care insurance program identified by the Sec20 retary. For purposes of this paragraph, rules

21 similar to the rules for overpayments under sec22 tion 1903(d)(2) shall apply.

23 ‘‘(d) ADVANCE PAYMENT; RETROSPECTIVE ADJUST24 MENT.—The Secretary may make payments under this

25 section for each quarter on the basis of advance estimates
28

•S 3017 IS

1 of expenditures submitted by a State or group of States

2 and such other investigation as the Secretary may find

3 necessary, and may reduce or increase the payments as

4 necessary to adjust for any overpayment or underpayment

5 for prior quarters.

6 ‘‘(e) FLEXIBILITY IN SUBMITTAL OF CLAIMS.—

7 Nothing in this section shall be construed as preventing

8 a State or group of States from claiming as expenditures

9 in any quarter of a fiscal year expenditures that were in10 curred in a previous quarter of such fiscal year.

11 ‘‘SEC. 2206. PROCESS FOR SUBMISSION, APPROVAL, AND

12 AMENDMENT OF OUTPATIENT PRESCRIP13 TION DRUG ASSISTANCE PLANS.

14 ‘‘(a) INITIAL PLAN.—

15 ‘‘(1) SUBMISSION.—A State may receive pay16 ments under section 2205 with respect to a fiscal

17 year if the State, individually or as part of a group

18 of States, has submitted to the Secretary, not later

19 than the date described in section 2204(d)(2), an

20 outpatient prescription drug assistance plan that the

21 Secretary has found meets the applicable require22 ments of this title.

23 ‘‘(2) APPROVAL.—Except as the Secretary may

24 provide under subsection (e), a plan submitted under

25 paragraph (1)—
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•S 3017 IS

1 ‘‘(A) shall be approved for purposes of this

2 title; and

3 ‘‘(B) shall be effective beginning with a

4 calendar quarter that is specified in the plan,

5 but in no case earlier than October 1, 2000.

6 ‘‘(b) PLAN AMENDMENTS.—Within 30 days after a

7 State or group of States amends an outpatient prescrip8 tion drug assistance plan submitted pursuant to sub9 section (a), the State or group shall notify the Secretary

10 of the amendment.

11 ‘‘(c) DISAPPROVAL OF PLANS AND PLAN AMEND12 MENTS.—

13 ‘‘(1) PROMPT REVIEW OF PLAN SUBMITTALS.—

14 The Secretary shall promptly review plans and plan

15 amendments submitted under this section to deter16 mine if they substantially comply with the require17 ments of this title.

18 ‘‘(2) 45-DAY APPROVAL DEADLINES.—A plan or

19 plan amendment is considered approved unless the

20 Secretary notifies the State or group of States in

21 writing, within 45 days after receipt of the plan or

22 amendment, that the plan or amendment is dis23 approved (and the reasons for the disapproval) or

24 that specified additional information is needed.
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•S 3017 IS

1 ‘‘(3) CORRECTION.—In the case of a dis2 approval of a plan or plan amendment, the Secretary

3 shall provide a State or group of States with a rea4 sonable opportunity for correction before taking fi5 nancial sanctions against the State or group on the

6 basis of such disapproval.

7 ‘‘(d) PROGRAM OPERATION.—

8 ‘‘(1) IN GENERAL.—A State or group of States

9 shall conduct the program in accordance with the

10 plan (and any amendments) approved under this

11 section and with the requirements of this title.

12 ‘‘(2) VIOLATIONS.—The Secretary shall estab13 lish a process for enforcing requirements under this

14 title. Such process shall provide for the withholding

15 of funds in the case of substantial noncompliance

16 with such requirements. In the case of an enforce17 ment action against a State or group of States

18 under this paragraph, the Secretary shall provide a

19 State or group of States with a reasonable oppor20 tunity for correction and for administrative and judi21 cial appeal of the Secretary’s action before taking fi22 nancial sanctions against the State or group of

23 States on the basis of such an action.

24 ‘‘(e) CONTINUED APPROVAL.—Subject to section

25 2201(d), an approved outpatient prescription drug assist-
31

•S 3017 IS

1 ance plan shall continue in effect unless and until the

2 State or group of States amends the plan under subsection

3 (b) or the Secretary finds, under subsection (d), substan4 tial noncompliance of the plan with the requirements of

5 this title.

6 ‘‘SEC. 2207. PLAN ADMINISTRATION; APPLICATION OF CER7 TAIN GENERAL PROVISIONS.

8 ‘‘(a) PLAN ADMINISTRATION.—An outpatient pre9 scription drug assistance plan shall include an assurance

10 that the State or group of States administering the plan

11 will collect the data, maintain the records, afford the Sec12 retary access to any records or information relating to the

13 plan for the purposes of review or audit, and furnish re14 ports to the Secretary, at the times and in the standard15 ized format the Secretary may require in order to enable

16 the Secretary to monitor program administration and

17 compliance and to evaluate and compare the effectiveness

18 of plans under this title.

19 ‘‘(b) APPLICATION OF CERTAIN GENERAL PROVI20 SIONS.—The following sections of this Act shall apply to

21 the program established under this title in the same man22 ner as they apply to a State under title XIX:

23 ‘‘(1) TITLE XIX PROVISIONS.—

24 ‘‘(A) Section 1902(a)(4)(C) (relating to

25 conflict of interest standards).
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•S 3017 IS

1 ‘‘(B) Paragraphs (2), (16), and (17) of

2 section 1903(i) (relating to limitations on pay3 ment).

4 ‘‘(C) Section 1903(w) (relating to limita5 tions on provider taxes and donations).

6 ‘‘(2) TITLE XI PROVISIONS.—

7 ‘‘(A) Section 1115 (relating to waiver au8 thority).

9 ‘‘(B) Section 1116 (relating to administra10 tive and judicial review), but only insofar as

11 consistent with this title.

12 ‘‘(C) Section 1124 (relating to disclosure

13 of ownership and related information).

14 ‘‘(D) Section 1126 (relating to disclosure

15 of information about certain convicted individ16 uals).

17 ‘‘(E) Section 1128A (relating to civil mon18 etary penalties).

19 ‘‘(F) Section 1128B(d) (relating to crimi20 nal penalties for certain additional charges).

21 ‘‘SEC. 2208. REPORTS.

22 ‘‘(a) IN GENERAL.—Each State or group of States

23 administering a plan under this title shall annually—
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•S 3017 IS

1 ‘‘(1) assess the operation of the outpatient pre2 scription drug assistance plan under this title in

3 each fiscal year; and

4 ‘‘(2) report to the Secretary on the result of the

5 assessment.

6 ‘‘(b) REQUIRED INFORMATION.—The annual report

7 required under subsection (a) shall include the following:

8 ‘‘(1) An assessment of the effectiveness of the

9 plan in providing outpatient prescription drug assist10 ance to low-income medicare beneficiaries and, if ap11 plicable, medicare beneficiaries with high drug costs.

12 ‘‘(2) A description and analysis of the effective13 ness of elements of the plan, including—

14 ‘‘(A) the characteristics of the low-income

15 medicare beneficiaries and, if applicable, medi16 care beneficiaries with high drug costs assisted

17 under the plan, including family income and ac18 cess to, or coverage by, other health insurance

19 prior to the plan and after eligibility for the

20 plan ends;

21 ‘‘(B) the amount and level of assistance

22 provided under the plan; and

23 ‘‘(C) the sources of the non-Federal share

24 of plan expenditures.
34

•S 3017 IS

1 ‘‘(c) ANNUAL REPORT OF THE SECRETARY.—The

2 Secretary shall submit to Congress and make available to

3 the public an annual report based on the reports required

4 under subsection (a) and section 2209(b)(5), containing

5 any conclusions and recommendations the Secretary con6 siders appropriate.

7 ‘‘SEC. 2209. ESTABLISHMENT OF DEFAULT PROGRAM.

8 ‘‘(a) PROGRAM AUTHORITY.—

9 ‘‘(1) IN GENERAL.—With respect to a fiscal

10 year, in the case of a State that fails to submit (in11 dividually or as part of a group of States) an ap12 proved outpatient prescription drug assistance plan

13 to the Secretary by the date described in section

14 2204(d)(2) for such fiscal year, outpatient prescrip15 tion drug assistance to low-income medicare bene16 ficiaries and, subject to the availability of funds,

17 medicare beneficiaries with high drug costs, who re18 side in such State shall be provided during such fis19 cal year by the Secretary, through the Administrator

20 of the Health Care Financing Administration, in ac21 cordance with this section.

22 ‘‘(2) DEFINITIONS.—In this section:

23 ‘‘(A) CONTRACTOR.—The term ‘contractor’

24 means a pharmaceutical benefit manager or

25 other entity that meets standards established by
35

•S 3017 IS

1 the Administrator of the Health Care Financing

2 Administration for the provision of outpatient

3 prescription drug assistance under a contract

4 entered into under this section.

5 ‘‘(B) LOW-INCOME MEDICARE BENE6 FICIARY.—The term ‘low-income medicare bene7 ficiary’ means an individual who—

8 ‘‘(i) satisfies the requirements of sub9 paragraphs (A) and (B) of section

10 2202(b)(1);

11 ‘‘(ii) is determined to have family in12 come that does not exceed a percentage of

13 the poverty line for a family of the size in14 volved specified by the Administrator of

15 the Health Care Financing Administration

16 that may not exceed 135 percent; and

17 ‘‘(iii) at the option of the Adminis18 trator of the Health Care Financing Ad19 ministration, is determined to have re20 sources that do not exceed a level specified

21 by such Administrator.

22 ‘‘(C) MEDICARE BENEFICIARY WITH HIGH

23 DRUG COSTS.—The term ‘medicare beneficiary

24 with high drug costs’ means an individual—
36

•S 3017 IS

1 ‘‘(i) who satisfies the requirements of

2 subparagraphs (A) and (B) of section

3 2202(b)(1);

4 ‘‘(ii) whose family income exceeds the

5 percentage of the poverty line specified by

6 the Administrator of the Health Care Fi7 nancing Administration under subpara8 graph (B)(ii) for a low-income medicare

9 beneficiary residing in the same State;

10 ‘‘(iii) whose resources exceed a level

11 (if any) specified by the Administrator of

12 the Health Care Financing Administration

13 under subparagraph (B)(iii) for a low-in14 come medicare beneficiary residing in the

15 same State; and

16 ‘‘(iv) with respect to any 3-month pe17 riod, who has out-of-pocket expenses for

18 outpatient prescription drugs and

19 biologicals (including insulin and insulin

20 supplies) for which outpatient prescription

21 drug assistance is available under this title

22 that exceed a level specified by such Ad23 ministrator (consistent with the availability

24 of funds for the operation of the program
37

•S 3017 IS

1 established under this section in the State

2 where the beneficiary resides).

3 ‘‘(b) ADMINISTRATION.—In administering the default

4 program established under this section, the Administrator

5 of the Health Care Financing Administration shall—

6 ‘‘(1) establish procedures to determine the eligi7 bility of the low-income medicare beneficiaries and

8 medicare beneficiaries with high drug costs described

9 in subsection (a) for outpatient prescription drug as10 sistance;

11 ‘‘(2) establish a process for accepting bids to

12 provide outpatient prescription drug assistance to

13 such beneficiaries, awarding contracts under such

14 bids, and making payments under such contracts;

15 ‘‘(3) establish policies and procedures for over16 seeing the provision of outpatient prescription drug

17 assistance under such contracts;

18 ‘‘(4) develop and implement quality and service

19 assessment measures that include beneficiary quality

20 surveys and annual quality and service rankings for

21 contractors awarded a contract under this section;

22 ‘‘(5) annually assess the program established

23 under this section and submit a report to the Sec24 retary containing the information required under

25 section 2208(b); and
38

•S 3017 IS

1 ‘‘(6) carry out such other responsibilities as are

2 necessary for the administration of the provision of

3 outpatient prescription drug assistance under this

4 section.

5 ‘‘(c) CONTRACT REQUIREMENTS.—

6 ‘‘(1) AUTHORITY; TERM.—

7 ‘‘(A) USE OF COMPETITIVE PROCE8 DURES.—

9 ‘‘(i) FISCAL YEAR 2001.—With respect

10 to fiscal year 2001, the Administrator of

11 the Health Care Financing Administration

12 may enter into contracts under this section

13 without using competitive procedures, as

14 defined in section 4(5) of the Office of

15 Federal Procurement Policy Act (41

16 U.S.C. 403(5)), or any other provision of

17 law requiring competitive bidding.

18 ‘‘(ii) FISCAL YEARS 2002, 2003, AND

19 2004.—With respect to fiscal years 2002,

20 2003, and 2004, the Administrator of the

21 Health Care Financing Administration

22 shall award contracts under this section

23 using competitive procedures (as so de24 fined).
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•S 3017 IS

1 ‘‘(B) TERM.—Each contract shall be for a

2 uniform term of at least 1 year, but may be

3 made automatically renewable from term to

4 term in the absence of notice of termination by

5 either party.

6 ‘‘(2) BENEFIT.—The contract shall require the

7 contractor to provide a low-income medicare bene8 ficiary and, if applicable, a medicare beneficiary with

9 high drug costs, outpatient prescription drug assist10 ance that is equivalent to the FEHBP-equivalent

11 benchmark benefit package described in section

12 2203(b)(2) in a manner that is consistent with the

13 provisions of this title as such provisions apply to a

14 State that provides such assistance.

15 ‘‘(3) QUALITY AND SERVICE ASSESSMENT.—

16 The contract shall require the contractor to cooper17 ate with the quality and service assessment meas18 ures implemented in accordance with subsection

19 (b)(4).

20 ‘‘(4) PAYMENTS.—The contract shall specify

21 the amount and manner by which payments (includ22 ing any administrative fees) shall be made to the

23 contractor for the provision of outpatient prescrip24 tion drug assistance to low-income medicare bene-
40

•S 3017 IS

1 ficiaries and, if applicable, medicare beneficiaries

2 with high drug costs.

3 ‘‘(d) FUNDING.—

4 ‘‘(1) AGGREGATE OF TRANSFERRED

5 AMOUNTS.—The Secretary, through the Adminis6 trator of the Health Care Financing Administration,

7 shall use the aggregate of the amounts transferred

8 and made available under section 2204(d)(1)(A)(i)

9 for purposes of carrying out the default program es10 tablished under this section. Such aggregate may be

11 used to provide outpatient prescription drug assist12 ance to any low-income medicare beneficiary, and,

13 subject to the availability of funds, medicare bene14 ficiary with high drug costs, who resides in a State

15 described in subsection (a)(1).

16 ‘‘(2) LIMITATION ON ADMINISTRATIVE COSTS.—

17 Administrative expenditures incurred by the Sec18 retary or the Administrator of the Health Care Fi19 nancing Administration for a fiscal year to carry out

20 this section (other than administrative fees paid to

21 a contractor under a contract meeting the require22 ments of subsection (c))—

23 ‘‘(A) shall be paid out of the aggregate

24 amounts described in paragraph (1); and
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•S 3017 IS

1 ‘‘(B) may not exceed an amount equal to

2 1 percent of all premiums imposed for such fis3 cal year to provide outpatient prescription drug

4 assistance to low-income medicare beneficiaries

5 and medicare beneficiaries with high drug costs

6 under this section.

7 ‘‘(e) TERMINATION.—Except as provided in section

8 2201(d)(2), the program established under this section

9 shall terminate on September 30, 2004.

10 ‘‘SEC. 2210. DEFINITIONS.

11 ‘‘In this title:

12 ‘‘(1) COST-SHARING.—The term ‘cost-sharing’

13 means a deductible, coinsurance, copayment, or simi14 lar charge, and includes an enrollment fee.

15 ‘‘(2) OUTPATIENT PRESCRIPTION DRUG ASSIST16 ANCE.—

17 ‘‘(A) IN GENERAL.—The term ‘outpatient

18 prescription drug assistance’ means, subject to

19 subparagraph (B), payment for part or all of

20 the cost of coverage of self-administered out21 patient prescription drugs and biologicals (in22 cluding insulin and insulin supplies) for low-in23 come medicare beneficiaries and, if applicable,

24 medicare beneficiaries with high drug costs.
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•S 3017 IS

1 ‘‘(B) EXCLUSIONS.—Such term does not

2 include payment or coverage with respect to—

3 ‘‘(i) items covered under title XVIII;

4 or

5 ‘‘(ii) items for which coverage is not

6 available under a State plan under title

7 XIX.

8 ‘‘(3) OUTPATIENT PRESCRIPTION DRUG ASSIST9 ANCE PLAN; PLAN.—Unless the context otherwise re10 quires, the terms ‘outpatient prescription drug as11 sistance plan’ and ‘plan’ mean an outpatient pre12 scription drug assistance plan approved under sec13 tion 2206.

14 ‘‘(4) GROUP HEALTH PLAN; GROUP HEALTH IN15 SURANCE COVERAGE; ETC.—The terms ‘group health

16 plan’, ‘group health insurance coverage’, and ‘health

17 insurance coverage’ have the meanings given such

18 terms in section 2791 of the Public Health Service

19 Act (42 U.S.C. 300gg–91).

20 ‘‘(5) POVERTY LINE.—The term ‘poverty line’

21 has the meaning given such term in section 673(2)

22 of the Community Services Block Grant Act (42

23 U.S.C. 9902(2)), including any revision required by

24 such section.
43

•S 3017 IS

1 ‘‘(6) PREEXISTING CONDITION EXCLUSION.—

2 The term ‘preexisting condition exclusion’ has the

3 meaning given such term in section 2701(b)(1)(A) of

4 the Public Health Service Act (42 U.S.C.

5 300gg(b)(1)(A)).

6 ‘‘(7) STATE.—The term ‘State’ has the mean7 ing given such term for purposes of title XIX.’’.

8 (b) CONFORMING AMENDMENTS.—

9 (1) DEFINITION OF STATE.—Section

10 1101(a)(1) of the Social Security Act (42 U.S.C.

11 1301(a)(1)) is amended in the first and fourth sen12 tences, by striking ‘‘and XXI’’ each place it appears

13 and inserting ‘‘XXI, and XXII’’.

14 (2) TREATMENT AS STATE HEALTH CARE PRO15 GRAM.—Section 1128(h) of such Act (42 U.S.C.

16 1320a–7(h)) is amended—

17 (A) in paragraph (3), by striking ‘‘or’’ at

18 the end;

19 (B) in paragraph (4), by striking the pe20 riod at the end and inserting ‘‘, or’’; and

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

22 paragraph:

23 ‘‘(5) an outpatient prescription drug assistance

24 plan approved under title XXII.’’.
44

•S 3017 IS

1 SEC. 3. ELECTION BY LOW-INCOME MEDICARE BENE2 FICIARIES AND MEDICARE BENEFICIARIES

3 WITH HIGH DRUG COSTS TO SUSPEND

4 MEDIGAP INSURANCE.

5 Section 1882(q) of the Social Security Act (42 U.S.C.

6 1395ss(q)) is amended—

7 (1) in paragraph (5)(C), by striking ‘‘this para8 graph or paragraph (6)’’ and inserting ‘‘this para9 graph, or paragraph (6) or (7)’’; and

10 (2) by adding at the end the following new

11 paragraph:

12 ‘‘(7) Each medicare supplemental policy shall

13 provide that benefits and premiums under the policy

14 shall be suspended at the request of the policyholder

15 if the policyholder is entitled to benefits under sec16 tion 226 and is covered under an outpatient pre17 scription drug assistance plan (as defined in section

18 2210(3)) or provided outpatient prescription drug

19 assistance under the program established under sec20 tion 2209. If such suspension occurs and if the pol21 icyholder or certificate holder loses coverage under

22 such plan or program, such policy shall be automati23 cally reinstituted (effective as of the date of such

24 loss of coverage) under terms described in subsection

25 (n)(6)(A)(ii) as of the loss of such coverage if the
45

•S 3017 IS

1 policyholder provides notice of loss of such coverage

2 within 90 days after the date of such loss.’’.

Æ