II 

108TH CONGRESS 

2D SESSION S. 2754

To amend the Social Security Act to protect social security cost-of-living 

adjustments (COLA). 

IN THE SENATE OF THE UNITED STATES 

JULY 22, 2004

Mr. DASCHLE (for himself, Mr. REED, Mrs. MURRAY, Mr. JOHNSON, Ms. MIKULSKI, Ms. CANTWELL, Ms. STABENOW, and Mr. LEAHY) introduced 

the following bill; which was read twice and referred to the Committee 

on Finance 

A BILL

To amend the Social Security Act to protect social security 

cost-of-living adjustments (COLA).

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 ‘‘Social Security COLA 

5 Protection Act of 2004’’. 
2

•S 2754 IS 

1 SEC. 2. PROTECTION OF SOCIAL SECURITY COLA IN2 CREASES AGAINST EXCESSIVE MEDICARE 

3 PREMIUM INCREASES. 

4 (a) APPLICATION TO PART B PREMIUMS.—Section 

5 1839(f) of the Social Security Act (42 U.S.C. 1395r(f)) 

6 is amended—

7 (1) by striking ‘‘(f) For any calendar year after 

8 1988’’ and inserting ‘‘(f)(1) For any calendar year 

9 after 1988 and before 2005’’; and 

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

11 paragraph: 

12 ‘‘(2) For any calendar year (beginning with 2005), 

13 if an individual is entitled to monthly benefits under sec14 tion 202 or 223 or to a monthly annuity under section 

15 3(a), 4(a), or 4(f) of the Railroad Retirement Act of 1974 

16 for November and December of the preceding year, if the 

17 monthly premium of the individual under this section for 

18 December of the preceding year and for January of the 

19 year involved is deducted from those benefits under section 

20 1840(a)(1) or section 1840(b)(1), and if the amount of 

21 the individual’s premium is not adjusted for January of 

22 the year involved under subsection (i), the monthly pre23 mium otherwise determined under this section for the indi24 vidual for that year shall not be increased pursuant to sub25 section (a)(3) to an amount that exceeds 25 percent of 
3

•S 2754 IS 

1 the amount of the increase in such monthly benefits for 

2 that individual attributable to section 215(i).’’. 

3 (b) APPLICATION TO PART D PREMIUMS.—

4 (1) IN GENERAL.—Section 1860D–13(a)(1) of 

5 such Act (42 U.S.C. 1395ww–113(a)(1)) is amend6 ed—

7 (A) in subparagraph (F), by striking ‘‘(D) 

8 and (E),’’ and inserting ‘‘(D), (E), and (F),’’; 

9 (B) by redesignating subparagraph (F) as 

10 subparagraph (G); and 

11 (C) by inserting after subparagraph (E) 

12 the following new subparagraph: 

13 ‘‘(F) PROTECTION OF SOCIAL SECURITY

14 COLA INCREASE.—For any calendar year, if an 

15 individual is entitled to monthly benefits under 

16 section 202 or 223 or to a monthly annuity 

17 under section 3(a), 4(a), or 4(f) of the Railroad 

18 Retirement Act of 1974 for November and De19 cember of the preceding year and was enrolled 

20 under a PDP plan or MA–PD plan for such 

21 months, the base beneficiary premium otherwise 

22 applied under this paragraph for the individual 

23 for months in that year shall be decreased by 

24 the amount (if any) by which the sum of the 

25 amounts described in the following clauses (i) 
4

•S 2754 IS 

1 and (ii) exceeds 25 percent of the amount of 

2 the increase in such monthly benefits for that 

3 individual attributable to section 215(i): 

4 ‘‘(i) PART D PREMIUM INCREASE FAC5 TOR.—

6 ‘‘(I) IN GENERAL.—Except as 

7 provided in this clause, the amount of 

8 the increase (if any) in the adjusted 

9 national average monthly bid amount 

10 (as determined under subparagraph 

11 (B)(iii)) for a month in the year over 

12 such amount for a month in the pre13 ceding year. 

14 ‘‘(II) NO APPLICATION TO FULL

15 PREMIUM SUBSIDY INDIVIDUALS.—In 

16 the case of an individual enrolled for 

17 a premium subsidy under section 

18 1860D–14(a)(1), zero. 

19 ‘‘(III) SPECIAL RULE FOR PAR20 TIAL PREMIUM SUBSIDY INDIVID21 UALS.—In the case of an individual 

22 enrolled for a premium subsidy under 

23 section 1860D–14(a)(2), a percent of 

24 the increase described in subclause (I) 

25 equal to 100 percent minus the per-
5

•S 2754 IS 

1 cent applied based on the linear scale 

2 under such section. 

3 ‘‘(ii) PART B PREMIUM INCREASE

4 FACTOR.—If the individual is enrolled for 

5 such months under part B—

6 ‘‘(I) IN GENERAL.—Except as 

7 provided in subclause (II), the amount 

8 of the annual increase in premium ef9 fective for such year resulting from 

10 the application of section 1839(a)(3), 

11 as reduced (if any) under section 

12 1839(f)(2). 

13 ‘‘(II) NO APPLICATION TO INDI14 VIDUALS PARTICIPATING IN MEDICARE

15 SAVINGS PROGRAM.—In the case of an 

16 individual who is enrolled for medical 

17 assistance under title XIX for medi18 care cost-sharing described in section 

19 1905(p)(3)(A)(ii), zero.’’. 

20 (2) APPLICATION UNDER MEDICARE ADVAN21 TAGE PROGRAM.—Section 1854(b)(2)(B) of such Act 

22 (42 U.S.C. 1395w–24(b)(2)(B)), as in effect as of 

23 January 1, 2006, relating to MA monthly prescrip24 tion drug beneficiary premium, is amended by in25 serting after ‘‘as adjusted under section 1860D–
6

•S 2754 IS 

1 13(a)(1)(B)’’ the following: ‘‘and section 1860D–

2 13(a)(1)(F)’’. 

3 (3) PAYMENT FROM MEDICARE PRESCRIPTION

4 DRUG ACCOUNT.—Section 1860D–16(b) of such Act 

5 (42 U.S.C. 1395w–116(b)) is amended—

6 (A) in paragraph (1)—

7 (i) by striking ‘‘and’’ at the end of 

8 subparagraph (C); 

9 (ii) by striking the period at the end 

10 of subparagraph (D) and inserting ‘‘; 

11 and’’; and 

12 (iii) by adding at the end the fol13 lowing new subparagraph: 

14 ‘‘(E) payment under paragraph (5) of pre15 mium reductions effected under section 1860D–

16 13(a)(1)(F).’’; and 

17 (B) by adding at the end the following new 

18 paragraph: 

19 ‘‘(5) PAYMENT FOR COLA PROTECTION PRE20 MIUM REDUCTIONS.—

21 ‘‘(A) IN GENERAL.—In addition to pay22 ments provided under section 1860D–15 to a 

23 PDP sponsor or an MA organization, in the 

24 case of each part D eligible individual who is 

25 enrolled in a prescription drug plan offered by 
7

•S 2754 IS 

1 such sponsor or an MA–PD plan offered by 

2 such organization and who has a premium re3 duced under section 1860D–13(a)(1)(F), the 

4 Secretary shall provide for payment to such 

5 sponsor or organization of an amount equiva6 lent to the amount of such premium reduction. 

7 ‘‘(B) APPLICATION OF PROVISIONS.—The 

8 provisions of subsections (d) and (f) of section 

9 1860D–15 (relating to payment methods and 

10 disclosure of information) shall apply to pay11 ment under subparagraph (A) in the same man12 ner as they apply to payments under such sec13 tion.’’. 

14 (c) DISREGARD OF PREMIUM REDUCTIONS IN DE15 TERMINING DEDICATED REVENUES UNDER MMA COST

16 CONTAINMENT.—Section 801(c)(3)(D) of the Medicare 

17 Prescription Drug, Improvement, and Modernization Act 

18 of 2003 (Public Law 108–173) is amended by adding at 

19 the end the following: ‘‘Such premiums shall also be deter20 mined without regard to any reductions effected under 

21 section 1839(f)(2) or 1860D–13(a)(1)(F) of such title.’’. 

22 (d) EFFECTIVE DATES.—

23 (1) PART B PREMIUM.—The amendments made 

24 by subsection (a) apply to premiums for months be25 ginning with January 2005. 
8

•S 2754 IS 

1 (2) PART D PREMIUM.—The amendments made 

2 by subsection (b) apply to premiums for months be3 ginning with January 2007. 

4 (3) MMA PROVISION.—The amendment made 

5 by subsection (c) shall take effect on the date of the 

6 enactment of this Act.

Æ