II 

108TH CONGRESS 

2ND SESSION S. 2339 

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 SENATE OF THE UNITED STATES 

APRIL 22, 2004 

Mr. CORZINE (for himself, Mr. LAUTENBERG, Ms. STABENOW, and Ms. MIKULSKI) introduced the following bill; which was read twice and referred 

to the Committee on Finance 

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, 

3 SECTION 1. SHORT TITLE. 

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

5 Affordable Drugs Act of 2004’’. 
2 

•S 2339 IS 

1 SEC. 2. ELIMINATION OF DISCRIMINATORY TREATMENT OF 

2 EMPLOYER PLANS. 

3 (a) ELIMINATION OF TRUE OUT-OF-POCKET LIMITA4 TION.—Section 1860D–2(b)(4)(C) of the Social Security 

5 Act, as added by section 101(a) of the Medicare Prescrip6 tion Drug, Improvement, and Modernization Act of 2003, 

7 is amended to read as follows: 

8 ‘‘(C) APPLICATION.—In applying subpara9 graph (A), incurred costs shall only include 

10 costs incurred with respect to covered part D 

11 drugs for the annual deductible described in 

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

13 paragraph (2), and for amounts for which bene14 fits are not provided because of the application 

15 of the initial coverage limit described in para16 graph (3).’’. 

17 (b) EQUALIZATION OF SUBSIDIES.—Notwithstanding 

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

19 Human Services shall provide for such increase in the spe20 cial subsidy payment amounts under section 1860D– 

21 22(a)(3) of the Social Security Act, as added by section 

22 101(a) of the Medicare Prescription Drug, Improvement, 

23 and Modernization Act of 2003, as may be appropriate 

24 to provide for payments in the aggregate equivalent to the 

25 payments that would have been made under section 

26 1860D–15 of such Act if the individuals were not enrolled 
3 

•S 2339 IS 

1 in a qualified retiree prescription drug plan. In making 

2 such computation, the Secretary shall not take into ac3 count the application of the amendments made by section 

4 1202 of the Medicare Prescription Drug, Improvement, 

5 and Modernization Act of 2003. 

6 SEC. 3. DIRECT SUBSIDY FOR CERTAIN STATE PHARMA7 CEUTICAL ASSISTANCE PROGRAMS. 

8 Part D of title XVIII of the Social Security Act (as 

9 so added) is amended by inserting after section 1860D– 

10 23 the following: 

11 ‘‘DIRECT SUBSIDIES FOR CERTAIN STATE

12 PHARMACEUTICAL ASSISTANCE PROGRAMS

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

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

15 for the payment to a State offering a State pharma16 ceutical assistance program described in section 

17 1860D–23(b)(1) for each individual who is eligible 

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

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

20 such program for each month for which such indi21 vidual is so enrolled. 

22 ‘‘(2) AMOUNT OF PAYMENT.— 

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

24 payment under paragraph (1) shall be an 

25 amount equal to the special subsidy payment 

26 amount determined under section 1860D– 
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•S 2339 IS 

1 22(a)(3) for a qualifying covered retiree for a 

2 coverage year enrolled with the sponsor of a 

3 qualified retiree prescription 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 
5 

•S 2339 IS 

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. 
6 

•S 2339 IS 

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 (as so added) is amended by striking ‘‘all methods of oper15 ation’’ and inserting ‘‘its own methods of operation, except 

16 that a PDP sponsor or MA organization may not require 

17 a State Pharmaceutical Assistance Program or an RX 

18 plan described in subsection (b) to apply such tools when 

19 coordinating benefits’’. 

20 SEC. 5. ALLOWING MEDICAID WRAP. 

21 Section 1935(d) of the Social Security Act, as added 

22 by section 103(c) of the Medicare Prescription Drug, Im23 provement, and Modernization Act of 2003, is repealed. 
7 

•S 2339 IS 

1 SEC. 6. REPEAL OF COMPARATIVE COST ADJUSTMENT 

2 PROGRAM. 

3 Effective as if included in the enactment of the Medi4 care Prescription Drug, Improvement, and Modernization 

5 Act of 2003, subtitle E of title II of such Act is repealed 

6 and any provisions of law amended by such subtitle are 

7 restored as if such subtitle 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)), as added by section 104(a) of the Medicare 

12 Prescription Drug, Improvement, and Modernization Act 

13 of 2003, is amended as follows: 

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

15 than such a policy that provides wrap-around pre16 scription drug coverage included within a range of 

17 such coverage approved under subparagraph 

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

19 (2) Add at the end of paragraph (1) the fol20 lowing new subparagraph: 

21 ‘‘(D) WRAP-AROUND PRESCRIPTION DRUG

22 COVERAGE.— 

23 ‘‘(i) IN GENERAL.—Notwithstanding 

24 any other provision of this subsection, a 

25 medigap Rx policy that provides wrap26 around prescription drug coverage included 
8 

•S 2339 IS 

1 within a range of such coverage approved 

2 by the Secretary under clause (ii) may be 

3 offered to part D enrollees. 

4 ‘‘(ii) DEVELOPMENT OF STAND5 ARDS.—The Secretary shall approve a 

6 range of wrap-around prescription drug 

7 coverage that may be offered under this 

8 subparagraph to part D enrollees.’’. 

9 SEC. 8. EFFECTIVE DATE. 

10 The amendments made by this Act shall take effect 

11 as if included in the enactment of the Medicare Prescrip12 tion Drug, Improvement, and Modernization Act of 2003. 

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