118 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect as of January 1, 2008. 
SEC. 215. ELIMINATION OF PART D COST-SHARING FOR 
CERTAIN 
NON-INSTITUTIONALIZED 
FULL- 
BENEFIT DUAL ELIGIBLE INDIVIDUALS. 
(a) IN GENERAL.—Section 1860D–14(a)(1)(D)(i) of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395w– 
114(a)(1)(D)(i)) is amended— 
(1) in the heading, by striking ‘‘INSTITU-
TIONALIZED
INDIVIDUALS.—In’’ 
and 
inserting 
‘‘ELIMINATION
OF
COST-SHARING
FOR
CERTAIN 
FULL-BENEFIT DUAL ELIGIBLE INDIVIDUALS.— 
‘‘(I) INSTITUTIONALIZED
INDI-
VIDUALS.—In’’; and 
(2) by adding at the end the following new sub-
clause: 
‘‘(II) CERTAIN
OTHER
INDIVID-
UALS.—In the case of an individual 
who is a full-benefit dual eligible indi-
vidual and with respect to whom there 
has been a determination that but for 
the provision of home and community 
based care (whether under section 
1915 or under a waiver under section 
1115) the individual would require the 
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level of care provided in a hospital or 
a nursing facility or intermediate care 
facility for the mentally retarded the 
cost of which could be reimbursed 
under the State plan under title XIX, 
the elimination of any beneficiary co-
insurance described in section 1860D– 
2(b)(2) (for all amounts through the 
total amount of expenditures at which 
benefits are available under section 
1860D–2(b)(4)).’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to drugs dispensed on or after 
January 1, 2009. 
SEC. 216. EXEMPTIONS FROM INCOME AND RESOURCES 
FOR DETERMINATION OF ELIGIBILITY FOR 
LOW-INCOME SUBSIDY. 
(a) IN GENERAL.—Section 1860D–14(a)(3) of the 
Social Security Act (42 U.S.C. 1395w–114(a)(3)), as 
amended by subsections (a) and (b) of section 213, is fur-
ther amended— 
(1) in subparagraph (C)(i), by inserting ‘‘and 
except that support and maintenance furnished in 
kind shall not be counted as income’’ after ‘‘section 
1902(r)(2)’’; 
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120 
(2) in subparagraph (D), in the matter before 
clause (i), by inserting ‘‘subject to the additional ex-
clusions provided under subparagraph (G)’’ before 
‘‘)’’; 
(3) in subparagraph (E)(i), in the matter before 
subclause (I), by inserting ‘‘subject to the additional 
exclusions provided under subparagraph (G)’’ before 
‘‘)’’; and 
(4) by adding at the end the following new sub-
paragraph: 
‘‘(I) ADDITIONAL EXCLUSIONS.—In deter-
mining the resources of an individual (and the 
eligible spouse of the individual, if any) under 
section 1613 for purposes of subparagraphs (D) 
and (E) the following additional exclusions shall 
apply: 
‘‘(i) LIFE
INSURANCE
POLICY.—No 
part of the value of any life insurance pol-
icy shall be taken into account. 
‘‘(ii) 
PENSION
OR
RETIREMENT 
PLAN.—No balance in any pension or re-
tirement plan shall be taken into ac-
count.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on January 1, 2009, and shall 
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121 
apply to determinations of eligibility for months beginning 
with January 2009. 
SEC. 217. COST-SHARING PROTECTIONS FOR LOW-INCOME 
SUBSIDY-ELIGIBLE INDIVIDUALS. 
(a) IN GENERAL.—Section 1860D–14(a) of the So-
cial Security Act (42 U.S.C. 1395w–114(a)) is amended— 
(1) in paragraph (1)(D), by adding at the end 
the following new clause: 
‘‘(iv) OVERALL LIMITATION ON COST- 
SHARING.—In the case of all such individ-
uals, a limitation on aggregate cost-sharing 
under this part for a year not to exceed 
2.5 percent of income.’’; and 
(2) in paragraph (2), by adding at the end the 
following new subparagraph: 
‘‘(F) OVERALL LIMITATION ON COST-SHAR-
ING.—A limitation on aggregate cost-sharing 
under this part for a year not to exceed 2.5 per-
cent of income.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply as of January 1, 2009. 
SEC. 218. INTELLIGENT ASSIGNMENT IN ENROLLMENT. 
(a) IN GENERAL.—Section 1860D–1(b)(1) of the So-
cial Security Act (42 U.S.C. 1395w–101(b)(1) is amend-
ed— 
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122 
(1) in the second sentence of subparagraph (C), 
by inserting ‘‘, subject to subparagraph (D),’’ before 
‘‘on a random basis’’; and 
(2) by adding at the end the following new sub-
paragraph:’’. 
‘‘(D) INTELLIGENT ASSIGNMENT.—In the 
case of any auto-enrollment under subpara-
graph (C), no part D eligible individual de-
scribed in such subparagraph shall be enrolled 
in a prescription drug plan which does not meet 
the following requirements: 
‘‘(i) FORMULARY.—The plan has a 
formulary that covers at least— 
‘‘(I) 95 percent of the 100 most 
commonly prescribed non-duplicative 
generic covered part D drugs for the 
population of individuals entitled to 
benefits under part A or enrolled 
under part B; and 
‘‘(II) 95 percent of the 100 most 
commonly prescribed non-duplicative 
brand name covered part D drugs for 
such population. 
‘‘(ii) 
PHARMACY
NETWORK.—The 
plan has a network of pharmacies that 
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123 
substantially exceeds the minimum require-
ments for prescription drug plans in the 
State and that provides access in areas 
where lower income individuals reside. 
‘‘(iii) QUALITY.— 
‘‘(I) IN
GENERAL.—Subject to 
subclause (I), the plan has an above 
average score on quality ratings of the 
Secretary of prescription drug plans 
under this part. 
‘‘(II) EXCEPTION.—Subclause (I) 
shall not apply to a plan that is a new 
plan (as defined by the Secretary), 
with respect to the plan year involved. 
‘‘(iv) LOW
COST.—The total cost 
under this title of providing prescription 
drug coverage under the plan consistent 
with the previous clauses of this subpara-
graph is among the lowest 25th percentile 
of prescription drug plans under this part 
in the State. 
In the case that no plan meets the requirements 
under clauses (i) through (iv), the Secretary 
shall implement this subparagraph to the great-
est extent possible with the goal of protecting 
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124 
beneficiary access to drugs without increasing 
the cost relative to the enrollment process under 
subparagraph (C) as in existence before the 
date of the enactment of this subparagraph.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect for enrollments effected on 
or after November 15, 2009. 
Subtitle C—Part D Beneficiary 
Improvements 
SEC. 221. INCLUDING COSTS INCURRED BY AIDS DRUG AS-
SISTANCE PROGRAMS AND INDIAN HEALTH 
SERVICE 
IN 
PROVIDING 
PRESCRIPTION 
DRUGS TOWARD THE ANNUAL OUT OF POCK-
ET THRESHOLD UNDER PART D. 
(a) IN GENERAL.—Section 1860D–2(b)(4)(C) of the 
Social Security Act (42 U.S.C. 1395w–102(b)(4)(C)) is 
amended— 
(1) in clause (i), by striking ‘‘and’’ at the end; 
(2) in clause (ii)— 
(A) by striking ‘‘such costs shall be treated 
as incurred only if’’ and inserting ‘‘subject to 
clause (iii), such costs shall be treated as in-
curred only if’’; 
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125 
(B) by striking ‘‘, under section 1860D– 
14, or under a State Pharmaceutical Assistance 
Program’’; and 
(C) by striking the period at the end and 
inserting ‘‘; and’’; and 
(3) by inserting after clause (ii) the following 
new clause: 
‘‘(iii) such costs shall be treated as in-
curred and shall not be considered to be 
reimbursed under clause (ii) if such costs 
are borne or paid— 
‘‘(I) under section 1860D–14; 
‘‘(II) under a State Pharma-
ceutical Assistance Program; 
‘‘(III) by the Indian Health Serv-
ice, an Indian tribe or tribal organiza-
tion, or an urban Indian organization 
(as defined in section 4 of the Indian 
Health Care Improvement Act); or 
‘‘(IV) under an AIDS Drug As-
sistance Program under part B of 
title XXVI of the Public Health Serv-
ice Act.’’. 
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126 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to costs incurred on or after 
January 1, 2009. 
SEC. 222. PERMITTING MID-YEAR CHANGES IN ENROLL-
MENT 
FOR 
FORMULARY 
CHANGES 
AD-
VERSELY IMPACT AN ENROLLEE. 
(a) IN GENERAL.—Section 1860D–1(b)(3) of the So-
cial Security Act (42 U.S.C. 1395w–101(b)(3)) is amend-
ed by adding at the end the following new subparagraph: 
‘‘(F) CHANGE IN FORMULARY RESULTING 
IN INCREASE IN COST-SHARING.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), in the case of an indi-
vidual enrolled in a prescription drug plan 
(or MA–PD plan) who has been prescribed 
a covered part D drug while so enrolled, if 
the formulary of the plan is materially 
changed (other than at the end of a con-
tract year) so to reduce the coverage (or 
increase the cost-sharing) of the drug 
under the plan. 
‘‘(ii) EXCEPTION.—Clause (i) shall 
not apply in the case that a drug is re-
moved from the formulary of a plan be-
cause of a recall or withdrawal of the drug 
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127 
issued by the Food and Drug Administra-
tion.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to contract years beginning on 
or after January 1, 2009. 
SEC. 223. REMOVAL OF EXCLUSION OF BENZODIAZEPINES 
FROM REQUIRED COVERAGE UNDER THE 
MEDICARE PRESCRIPTION DRUG PROGRAM. 
(a) IN GENERAL.—Section 1860D–2(e)(2)(A) of the 
Social Security Act (42 U.S.C. 1395w–102(e)(2)(A)) is 
amended— 
(1) by striking ‘‘subparagraph (E)’’ and insert-
ing ‘‘subparagraphs (E) and (J)’’; and 
(2) by inserting ‘‘and benzodiazepines, respec-
tively’’ after ‘‘smoking cessation agents’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to prescriptions dispensed on or 
after January 1, 2009. 
SEC. 
224. 
PERMITTING 
UPDATING 
DRUG 
COMPENDIA 
UNDER PART D USING PART B UPDATE PROC-
ESS. 
Section 1860D–4(b)(3)(C) of the Social Security Act 
(42 U.S.C. 1395w–104(b)(3)(C)) is amended by adding 
at the end the following new clause: 
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128 
‘‘(iv) UPDATING
DRUG
COMPENDIA 
USING PART B PROCESS.—The Secretary 
may apply under this subparagraph the 
same process for updating drug compendia 
that is used for purposes of section 
1861(t)(2)(B)(ii).’’. 
SEC. 225. CODIFICATION OF SPECIAL PROTECTIONS FOR 
SIX PROTECTED DRUG CLASSIFICATIONS. 
(a) IN GENERAL.—Section 1860D–4(b)(3) of the So-
cial Security Act (42 U.S.C. 1395w–104(b)(3)) is amend-
ed— 
(1) in subparagraph (C)(i), by inserting ‘‘, ex-
cept as provided in subparagraph (G),’’ after ‘‘al-
though’’; and 
(2) by inserting after subparagraph (F) the fol-
lowing new subparagraph: 
‘‘(G) REQUIRED INCLUSION OF DRUGS IN 
CERTAIN THERAPEUTIC CLASSES.— 
‘‘(i) IN
GENERAL.—The formulary 
must include all or substantially all covered 
part D drugs in each of the following 
therapeutic classes of covered part D 
drugs: 
‘‘(I) Anticonvulsants. 
‘‘(II) Antineoplastics. 
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129 
‘‘(III) Antiretrovirals. 
‘‘(IV) Antidepressants. 
‘‘(V) Antipsychotics. 
‘‘(VI) Immunosuppresessants. 
‘‘(ii) USE OF UTILIZATION MANAGE-
MENT TOOLS.—A PDP sponsor of a pre-
scription drug plan may use prior author-
ization or step therapy for the initiation of 
medications within one of the classifica-
tions specified in clause (i) but only when 
approved by the Secretary, except that 
such prior authorization or step therapy 
may 
not 
be 
used 
in 
the 
case 
of 
antiretrovirals and in the case of individ-
uals who already are stabilized on a drug 
treatment regimen.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply for plan years beginning on or 
after January 1, 2009. 
SEC. 226. ELIMINATION OF MEDICARE PART D LATE EN-
ROLLMENT PENALTIES PAID BY LOW-INCOME 
SUBSIDY-ELIGIBLE INDIVIDUALS. 
(a) INDIVIDUALS WITH INCOME BELOW 135 PER-
CENT OF POVERTY LINE.—Paragraph (1)(A)(ii) of sec-
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130 
tion 1860D–14(a) of the Social Security Act (42 U.S.C. 
1395w–114(a)) is amended to read as follows: 
‘‘(ii) 100 percent of any late enrollment penalties im-
posed under section 1860D–13(b) for such individual.’’. 
(b) INDIVIDUALS WITH INCOME BETWEEN 135 AND 
150 PERCENT OF POVERTY LINE.—Paragraph (2)(A) of 
such section is amended— 
(1) by inserting ‘‘equal to (i) an amount’’ after 
‘‘premium subsidy’’; 
(2) by striking ‘‘paragraph (1)(A)’’ and insert-
ing ‘‘clause (i) of paragraph (1)(A)’’; and 
(3) by adding at the end before the period the 
following: ‘‘, plus (ii) 100 percent of the amount de-
scribed in clause (ii) of such paragraph for such in-
dividual’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to subsidies for months beginning 
with January 2008. 
SEC. 227. SPECIAL ENROLLMENT PERIOD FOR SUBSIDY EL-
IGIBLE INDIVIDUALS. 
(a) IN GENERAL.—Section 1860D–1(b)(3) of the So-
cial Security Act (42 U.S.C. 1395w–101(b)(3)), as amend-
ed by section 222(a), is further amended by adding at the 
end the following new subparagraph: 
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131 
‘‘(G) ELIGIBILITY FOR LOW-INCOME SUB-
SIDY.— 
‘‘(i) IN GENERAL.—In the case of an 
applicable subsidy eligible individual (as 
defined in clause (ii)), the special enroll-
ment period described in clause (iii). 
‘‘(ii) APPLICABLE SUBSIDY ELIGIBLE 
INDIVIDUAL
DEFINED.—For purposes of 
this subparagraph, the term ‘applicable 
subsidy eligible individual’ means a part D 
eligible individual who is determined under 
subparagraph (B) of section 1860D– 
14(a)(3) to be a subsidy eligible individual 
(as defined in subparagraph (A) of such 
section), and includes such an individual 
who was enrolled in a prescription drug 
plan or an MA–PD plan on the date of 
such determination. 
‘‘(iii) SPECIAL ENROLLMENT PERIOD 
DESCRIBED.—The special enrollment pe-
riod described in this clause, with respect 
to an applicable subsidy eligible individual, 
is the 90-day period beginning on the date 
the individual receives notification that 
such individual has been determined under 
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132 
section 1860D–14(a)(3)(B) to be a subsidy 
eligible individual (as so defined).’’. 
(b) AUTOMATIC ENROLLMENT PROCESS FOR CER-
TAIN SUBSIDY ELIGIBLE INDIVIDUALS.—Section 1860D– 
1(b)(1) of the Social Security Act (42 U.S.C. 1395w– 
101(b)(1)), as amended by section 218(a)(2), is further 
amended by adding at the end the following new subpara-
graph: 
‘‘(E) SPECIAL RULE FOR SUBSIDY ELIGI-
BLE
INDIVIDUALS.—The process established 
under subparagraph (A) shall include, in the 
case of an applicable subsidy eligible individual 
(as defined in clause (ii) of paragraph (3)(F)) 
who fails to enroll in a prescription drug plan 
or an MA–PD plan during the special enroll-
ment period described in clause (iii) of such 
paragraph applicable to such individual, a proc-
ess for the facilitated enrollment of the indi-
vidual in the prescription drug plan or MA–PD 
plan that is most appropriate for such indi-
vidual (as determined by the Secretary). Noth-
ing in the previous sentence shall prevent an in-
dividual described in such sentence from declin-
ing enrollment in a plan determined appropriate 
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133 
by the Secretary (or in the program under this 
part) or from changing such enrollment.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to subsidy determinations made 
for months beginning with January 2008. 
Subtitle D—Reducing Health 
Disparities 
SEC. 231. MEDICARE DATA ON RACE, ETHNICITY, AND PRI-
MARY LANGUAGE. 
(a) REQUIREMENTS.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services (in this subtitle referred to as the 
‘‘Secretary’’) shall— 
(A) collect data on the race, ethnicity, and 
primary language of each applicant for and re-
cipient of benefits under title XVIII of the So-
cial Security Act— 
(i) using, at a minimum, the cat-
egories for race and ethnicity described in 
the 1997 Office of Management and Budg-
et Standards for Maintaining, Collecting, 
and Presenting Federal Data on Race and 
Ethnicity; 
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134 
(ii) using the standards developed 
under subsection (e) for the collection of 
language data; 
(iii) where practicable, collecting data 
for additional population groups if such 
groups can be aggregated into the min-
imum race and ethnicity categories; and 
(iv) where practicable, through self-re-
porting; 
(B) with respect to the collection of the 
data described in subparagraph (A) for appli-
cants and recipients who are minors or other-
wise legally incapacitated, require that— 
(i) such data be collected from the 
parent or legal guardian of such an appli-
cant or recipient; and 
(ii) the preferred language of the par-
ent or legal guardian of such an applicant 
or recipient be collected; 
(C) systematically analyze at least annually 
such data using the smallest appropriate units 
of analysis feasible to detect racial and ethnic 
disparities in health and health care and when 
appropriate, for men and women separately; 
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135 
(D) report the results of analysis annually 
to the Director of the Office for Civil Rights, 
the Committee on Health, Education, Labor, 
and Pensions and the Committee on Finance of 
the Senate, and the Committee on Energy and 
Commerce and the Committee on Ways and 
Means of the House of Representatives; and 
(E) ensure that the provision of assistance 
to an applicant or recipient of assistance is not 
denied or otherwise adversely affected because 
of the failure of the applicant or recipient to 
provide race, ethnicity, and primary language 
data. 
(2) RULES
OF
CONSTRUCTION.—Nothing in 
this subsection shall be construed— 
(A) to permit the use of information col-
lected under this subsection in a manner that 
would adversely affect any individual providing 
any such information; and 
(B) to require health care providers to col-
lect data. 
(b) PROTECTION OF DATA.—The Secretary shall en-
sure (through the promulgation of regulations or other-
wise) that all data collected pursuant to subsection (a) is 
protected— 
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136 
(1) under the same privacy protections as the 
Secretary applies to other health data under the reg-
ulations promulgated under section 264(c) of the 
Health Insurance Portability and Accountability Act 
of 1996 (Public Law 104–191; 110 Stat. 2033) re-
lating to the privacy of individually identifiable 
health information and other protections; and 
(2) from all inappropriate internal use by any 
entity that collects, stores, or receives the data, in-
cluding use of such data in determinations of eligi-
bility (or continued eligibility) in health plans, and 
from other inappropriate uses, as defined by the 
Secretary. 
(c) COLLECTION PLAN.—In carrying out the duties 
specified in subsection (a), the Secretary shall develop and 
implement a plan to improve the collection, analysis, and 
reporting of racial, ethnic, and primary language data 
within the programs administered under title XVIII of the 
Social Security Act, and, in consultation with the National 
Committee on Vital Health Statistics, the Office of Minor-
ity Health, and other appropriate public and private enti-
ties, shall make recommendations on how to— 
(1) implement subsection (a) while minimizing 
the cost and administrative burdens of data collec-
tion and reporting; 
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137 
(2) expand awareness that data collection, anal-
ysis, and reporting by race, ethnicity, and primary 
language is legal and necessary to assure equity and 
non-discrimination in the quality of health care serv-
ices; 
(3) ensure that future patient record systems 
have data code sets for racial, ethnic, and primary 
language identifiers and that such identifiers can be 
retrieved from clinical records, including records 
transmitted electronically; 
(4) improve health and health care data collec-
tion and analysis for more population groups if such 
groups can be aggregated into the minimum race 
and ethnicity categories; 
(5) provide researchers with greater access to 
racial, ethnic, and primary language data, subject to 
privacy and confidentiality regulations; and 
(6) safeguard and prevent the misuse of data 
collected under subsection (a). 
(d) COMPLIANCE WITH STANDARDS.—Data collected 
under subsection (a) shall be obtained, maintained, and 
presented (including for reporting purposes and at a min-
imum) in accordance with the 1997 Office of Management 
and Budget Standards for Maintaining, Collecting, and 
Presenting Federal Data on Race and Ethnicity. 
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138 
(e) LANGUAGE COLLECTION STANDARDS.—Not later 
than 1 year after the date of enactment of this Act, the 
Director of the Office of Minority Health, in consultation 
with the Office for Civil Rights of the Department of 
Health and Human Services, shall develop and dissemi-
nate Standards for the Classification of Federal Data on 
Preferred Written and Spoken Language. 
(f) TECHNICAL ASSISTANCE FOR THE COLLECTION 
AND REPORTING OF DATA.— 
(1) IN GENERAL.—The Secretary may, either 
directly or through grant or contract, provide tech-
nical assistance to enable a health care provider or 
plan operating under the Medicare program to com-
ply with the requirements of this section. 
(2) TYPES
OF
ASSISTANCE.—Assistance pro-
vided under this subsection may include assistance 
to— 
(A) enhance or upgrade computer tech-
nology that will facilitate racial, ethnic, and pri-
mary language data collection and analysis; 
(B) improve methods for health data col-
lection and analysis including additional popu-
lation groups beyond the Office of Management 
and Budget categories if such groups can be 
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aggregated into the minimum race and ethnicity 
categories; 
(C) develop mechanisms for submitting col-
lected data subject to existing privacy and con-
fidentiality regulations; and 
(D) develop educational programs to raise 
awareness that data collection and reporting by 
race, ethnicity, and preferred language are legal 
and essential for eliminating health and health 
care disparities. 
(g) ANALYSIS OF RACIAL AND ETHNIC DATA.—The 
Secretary, acting through the Director of the Agency for 
Health Care Research and Quality and in coordination 
with the Administrator of the Centers for Medicare & 
Medicaid Services, shall— 
(1) identify appropriate quality assurance mech-
anisms to monitor for health disparities under the 
Medicare program; 
(2) specify the clinical, diagnostic, or thera-
peutic measures which should be monitored; 
(3) develop new quality measures relating to ra-
cial and ethnic disparities in health and health care; 
(4) identify the level at which data analysis 
should be conducted; and 
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