II 

108TH CONGRESS 

2D SESSION S. 2725

To amend the Medicare Prescription Drug, Improvement, and Modernization 

Act of 2003 to eliminate the coverage gap, to eliminate HMO subsidies, 

to repeal health savings accounts, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 22, 2004

Mrs. BOXER (for herself, Ms. MIKULSKI, Mr. LAUTENBERG, and Mr. 

CORZINE) introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL

To amend the Medicare Prescription Drug, Improvement, 

and Modernization Act of 2003 to eliminate the coverage 

gap, to eliminate HMO subsidies, to repeal health savings 

accounts, 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 ‘‘Closing the Coverage 

5 Gap Act of 2004’’. 
2

S 2725 IS 

1 TITLE I—IMPROVEMENT OF 

2 MEDICARE PRESCRIPTION 

3 DRUG BENEFIT 

4 SEC. 101. ELIMINATION OF COVERAGE GAP. 

5 (a) IN GENERAL.—Section 1860D–2(b) of the Social 

6 Security Act, as added by section 101(a) of the Medicare 

7 Prescription Drug, Improvement, and Modernization Act 

8 of 2003, is amended—

9 (1) in paragraph (1)(A)(ii), by striking ‘‘para10 graph (6)’’ and inserting ‘‘paragraph (5)’’; 

11 (2) in paragraph (2)(A), by striking ‘‘and up to 

12 the initial coverage limit under paragraph (3)’’; 

13 (3) by striking paragraphs (3) and (4) and in14 serting the following: 

15 ‘‘(3) PROTECTION AGAINST HIGH OUT-OF-POCK16 ET EXPENDITURES.—

17 ‘‘(A) IN GENERAL.—The coverage provides 

18 benefits with cost-sharing that is equal to the 

19 greater of—

20 ‘‘(i) a copayment of $2 for a generic 

21 drug or a preferred drug that is a multiple 

22 source drug (as defined in section 

23 1927(k)(7)(A)(i)) and $5 for any other 

24 drug; or 
3

S 2725 IS 

1 ‘‘(ii) coinsurance that is equal to 5 

2 percent. 

3 ‘‘(B) ADJUSTMENT OF AMOUNT.—For a 

4 year after 2006, the dollar amounts specified in 

5 subparagraph (A)(i) shall be equal to the dollar 

6 amounts specified in this subparagraph for the 

7 previous year, increased by the annual percent8 age increase described in paragraph (5) for the 

9 year involved. Any amount established under 

10 this clause that is not a multiple of a 5 cents 

11 shall be rounded to the nearest multiple of 5 

12 cents.’’; and 

13 (4) by redesignating paragraphs (5) and (6) as 

14 paragraphs (4) and (5), respectively. 

15 (b) CONFORMING AMENDMENT.—Section 1860D–

16 14(a) of such Act, as so added, is amended by striking 

17 subparagraph (C) of paragraphs (1) and (2). 

18 (c) EFFECTIVE DATE.—The amendments made by 

19 this section shall take effect as if included in the enact20 ment of the Medicare Prescription Drug, Improvement, 

21 and Modernization Act of 2003. 
4

S 2725 IS 

1 TITLE II—ELIMINATION OF HMO 

2 SUBSIDIES 

3 SEC. 201. ELIMINATION OF MA REGIONAL PLAN STABILIZA4 TION FUND. 

5 Subsection (e) of section 1858 of the Social Security 

6 Act, as added by section 221(c) of the Medicare Prescrip7 tion Drug, Improvement, and Modernization Act of 2003, 

8 is repealed. 

9 SEC. 202. ELIMINATION OF PREMIUM SUPPORT DEM10 ONSTRATION PROGRAM. 

11 Effective as if included in the enactment of the Medi12 care Prescription Drug, Improvement, and Modernization 

13 Act of 2003, subtitle E of title I of such Act is repealed 

14 and any provisions of law amended by such subtitle are 

15 restored as if such subtitle had not been enacted. 

16 TITLE III—REPEAL OF HEALTH 

17 SAVINGS ACCOUNTS 

18 SEC. 301. REPEAL OF HEALTH SAVINGS ACCOUNTS. 

19 Section 1201 of the Medicare Prescription Drug, Im20 provement, and Modernization Act of 2003 is repealed and 

21 any provisions of law amended by such section are re22 stored as if such section had not been enacted.

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