I 

109TH CONGRESS 

1ST SESSION H. R. 152 

To amend part D of title XVIII of the Social Security Act to improve 

the coordination of prescription drug coverage provided under retiree 

plans and State pharmaceutical assistance programs with the prescription 

drug benefit provided under the Medicare Program, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 4, 2005 

Mr. MENENDEZ 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 part D of title XVIII of the Social Security 

Act to improve the coordination of prescription drug 

coverage provided under retiree plans and State pharmaceutical assistance programs with the prescription drug 

benefit provided under the Medicare Program, 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, 
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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Preserving Access to 

3 Affordable Drugs Act of 2005’’. 

4 SEC. 2. ELIMINATION OF DISCRIMINATORY TREATMENT OF 

5 EMPLOYER PLANS. 

6 (a) ELIMINATION OF TRUE OUT-OF-POCKET LIMI7 TATION.—Section 1860D–2(b)(4)(C) of the Social Secu8 rity Act (42 U.S.C. 1395w–102(b)(4)(C)) is amended to 

9 read as follows: 

10 ‘‘(C) APPLICATION.—In applying subpara11 graph (A), incurred costs shall only include 

12 costs incurred with respect to covered part D 

13 drugs for the annual deductible described in 

14 paragraph (1), for cost-sharing described in 

15 paragraph (2), and for amounts for which bene16 fits are not provided because of the application 

17 of the initial coverage limit described in para18 graph (3).’’. 

19 (b) EQUALIZATION OF SUBSIDIES.—Notwithstanding 

20 any other provision of law, the Secretary of Health and 

21 Human Services shall provide for such increase in the spe22 cial subsidy payment amounts under section 1860D– 

23 22(a)(3) of the Social Security Act (42 U.S.C. 1395w– 

24 132(a)(3)) as may be appropriate to provide for payments 

25 in the aggregate equivalent to the payments that would 

26 have been made under section 1860D–15 of such Act if 
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1 the individuals were not enrolled in a qualified retiree pre2 scription drug plan. In making such computation, the Sec3 retary shall not take into account the application of the 

4 amendments made by section 1202 of the Medicare Pre5 scription Drug, Improvement, and Modernization Act of 

6 2003 (Public Law 108–173; 117 Stat. 2480). 

7 SEC. 3. DIRECT SUBSIDY FOR CERTAIN STATE PHARMA8 CEUTICAL ASSISTANCE PROGRAMS. 

9 Part D of title XVIII of the Social Security Act (42 

10 U.S.C. 1395w–101 et seq.) is amended by inserting after 

11 section 1860D–23 the following new section: 

12 ‘‘DIRECT SUBSIDIES FOR CERTAIN STATE

13 PHARMACEUTICAL ASSISTANCE PROGRAMS

14 ‘‘SEC. 1860D–23A. (a) DIRECT SUBSIDY.— 

15 ‘‘(1) IN GENERAL.—The Secretary shall provide 

16 for the payment to a State offering a State pharma17 ceutical assistance program described in section 

18 1860D–23(b)(1) for each individual who is eligible 

19 for, but not enrolled in, a prescription drug plan or 

20 MA–PD plan under this part, and who is enrolled in 

21 such program for each month for which such indi22 vidual is so enrolled. 

23 ‘‘(2) AMOUNT OF PAYMENT.— The amount of 

24 the payment under paragraph (1) shall be an 

25 amount equal to the special subsidy payment 

26 amount determined under section 1860D–22(a)(3) 
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1 for a qualifying covered retiree for a coverage year 

2 enrolled with the sponsor of a qualified retiree pre3 scription drug plan. 

4 ‘‘(b) ADDITIONAL SUBSIDY.— 

5 ‘‘(1) IN GENERAL.—The Secretary shall provide 

6 for the payment to a State offering a State pharma7 ceutical assistance program described in section 

8 1860D–23(b)(1) for each applicable low-income indi9 vidual enrolled in the program for each month for 

10 which such individual is so enrolled. 

11 ‘‘(2) AMOUNT OF PAYMENT.— 

12 ‘‘(A) IN GENERAL.—The amount of the 

13 payment under paragraph (1) shall be the 

14 amount the Secretary estimates would have 

15 been made to a prescription drug plan or MA– 

16 PD plan under section 1860D–14 with respect 

17 to the applicable low-income individual if such 

18 individual was enrolled in such a plan. 

19 ‘‘(B) MAXIMUM PAYMENTS.—In no case 

20 may the amount of the payment determined 

21 under subparagraph (A) with respect to an ap22 plicable low-income individual exceed, as esti23 mated by the Secretary, the average amount 

24 paid in a year under section 1860D–14 on be25 half of a subsidy eligible individual (as defined 
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1 in section 1860D–14(a)(3)(A)) with income 

2 that is the same as the income of the applicable 

3 low-income individual. 

4 ‘‘(3) APPLICABLE LOW-INCOME INDIVIDUAL.— 

5 For purposes of this subsection, the term ‘applicable 

6 low-income individual’ means an individual who— 

7 ‘‘(A) is eligible for, but not enrolled in, a 

8 prescription drug plan or MA–PD plan under 

9 this part, and who is enrolled in a State phar10 maceutical assistance program described in sec11 tion 1860D–23(b)(1); and 

12 ‘‘(B) would be a subsidy eligible individual 

13 (as defined in section 1860D–14(a)(3)(A)) if 

14 the individual were enrolled in such a plan. 

15 ‘‘(c) PAYMENT METHODS.— 

16 ‘‘(1) IN GENERAL.—Payments under this sec17 tion shall be based on such a method as the Sec18 retary determines. The Secretary may establish a 

19 payment method by which interim payments of 

20 amounts under this section are made during a year 

21 based on the Secretary’s best estimate of amounts 

22 that will be payable after obtaining all of the infor23 mation. 
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1 ‘‘(2) SOURCE OF PAYMENTS.—Payments under 

2 this section shall be made from the Medicare Pre3 scription Drug Account. 

4 ‘‘(d) CONSTRUCTION.—Nothing in this section, sec5 tion 1860D–23, or section 1860D–24 shall be construed 

6 as requiring a prescription drug plan or MA–PD plan to 

7 coordinate coverage provided under such plan with cov8 erage provided under a State pharmaceutical assistance 

9 program described in section 1860D–23(b)(1) that is op10 erated by a State which receives a payment under this sec11 tion.’’. 

12 SEC. 4. FACILITATION OF COORDINATION. 

13 Section 1860D–24(c)(1) of the Social Security Act 

14 (42 U.S.C. 1395w–134(c)(1)) is amended by striking ‘‘all 

15 methods of operation’’ and inserting ‘‘its own methods of 

16 operation, except that a PDP sponsor or MA organization 

17 may not require a State Pharmaceutical Assistance Pro18 gram or an RX plan described in subsection (b) to apply 

19 such tools when coordinating benefits’’. 

20 SEC. 5. ALLOWING MEDICAID WRAP. 

21 Section 1935 of the Social Security Act (42 U.S.C. 

22 1396u–5) is amended by striking subsection (d). 
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1 SEC. 6. REPEAL OF COMPARATIVE COST ADJUSTMENT 

2 PROGRAM. 

3 Subtitle E of title II of of the Medicare Prescription 

4 Drug, Improvement, and Modernization Act of 2003 (Pub5 lic Law 108–173) is repealed and any provisions of law 

6 amended by such subtitle are restored as if such subtitle 

7 had not been enacted. 

8 SEC. 7. PROVISION OF WRAP-AROUND PRESCRIPTION 

9 DRUG COVERAGE THROUGH MEDIGAP. 

10 Section 1882(v) of the Social Security Act (42 U.S.C. 

11 1395ss(v)) is amended as follows: 

12 (1) In paragraph (1)(A), by inserting ‘‘, other 

13 than such a policy that provides wrap-around pre14 scription drug coverage included within a range of 

15 such coverage approved under subparagraph 

16 (D)(ii),’’ after ‘‘paragraph (6)(A))’’. 

17 (2) Add at the end of paragraph (1) the fol18 lowing new subparagraph: 

19 ‘‘(D) WRAP-AROUND PRESCRIPTION DRUG

20 COVERAGE.— 

21 ‘‘(i) IN GENERAL.—Notwithstanding 

22 any other provision of this subsection, a 

23 medigap Rx policy that provides wrap24 around prescription drug coverage included 

25 within a range of such coverage approved 
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1 by the Secretary under clause (ii) may be 

2 offered to part D enrollees. 

3 ‘‘(ii) DEVELOPMENT OF STAND4 ARDS.—The Secretary shall approve a 

5 range of wrap-around prescription drug 

6 coverage that may be offered under this 

7 subparagraph to part D enrollees.’’. 

8 SEC. 8. EFFECTIVE DATE. 

9 The amendments made by this Act, and the repeal 

10 made by section 6, shall take effect as if included in the 

11 enactment of the Medicare Prescription Drug, Improve12 ment, and Modernization Act of 2003 (Public Law 108– 

13 173). 

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