tified by the chief actuary of the Centers for Medi-
care & Medicaid Services. 
‘‘(2) SUPPLEMENTAL PRESCRIPTION DRUG COV-
ERAGE.—Insofar as a medicare operated prescrip-
tion drug plan offers supplemental prescription drug 
coverage, the Secretary may adjust the amount of 
the premium charged under paragraph (1).’’. 
(b) AUTO-ENROLLMENT OF SUBSIDY ELIGIBLE IN-
DIVIDUALS
IN
MEDICARE
OPERATED
PRESCRIPTION 
DRUG PLAN.—Section 1860D–1(b)(1)(C) of such Act (42 
U.S.C. 1395w–101(b)(1)(C)) is amended— 
(1) by designating the matter beginning with 
‘‘The process established’’ as a clause (i) with the 
heading ‘‘AUTO-ENROLLMENT FOR DUAL ELIGIBLES 
AND CERTAIN OTHER SUBSIDY ELIGIBLE INDIVID-
UALS’’; 
(2) by inserting ‘‘or who is a subsidy eligible in-
dividual described in section 1860D–14(a)(1)’’ after 
‘‘section 1935(c)(6))’’; 
(3) by striking ‘‘for the enrollment in’’ and all 
that follows through ‘‘in the PDP region.’’ and in-
serting ‘‘for the enrollment in the medicare operated 
prescription drug plan (as defined in section 1860D– 
11A(c)).’’; and 
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(4) by adding at the end the following new 
clauses: 
‘‘(ii) APPLICATION IN CASE OF PRE-
MIUM
INCREASES
OR
PLAN
DISCONTINU-
ATION.—The process under subparagraph 
(A) shall also provide for enrollment de-
scribed in clause (i) in the case of such an 
individual who is enrolled in a prescription 
drug plan that has a monthly beneficiary 
premium that does not exceed the premium 
assistance available under section 1860D– 
14(a)(1)(A)) if such plan is discontinued 
or the premium under such plan is in-
creased so it exceeds such available pre-
mium assistance. 
‘‘(iii) NOTICE.— 
‘‘(I) IN
GENERAL.—The Sec-
retary shall provide for notice to each 
individual auto-enrolled under clause 
(i) or (ii) that the individual has the 
right and the opportunity to select an-
other prescription drug plan (or MA– 
PD plan) through which to obtain 
prescription drug coverage. 
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‘‘(II) ADDITIONAL
NOTICE.—In 
the case of an individual described in 
clause (ii), both the sponsor of the 
plan in which the individual is en-
rolled and the Secretary shall provide 
notice to the individual that enroll-
ment in the plan will be discontinued 
or have a premium above the bench-
mark and, as a result, the individual 
will be enrolled in the medicare oper-
ated prescription drug plan for the 
following year unless the individual af-
firmatively acts otherwise.’’. 
(c) APPLICATION OF MONTHLY PREMIUM FOR PRE-
MIUM SUBSIDY PURPOSES.—Section 1860D–14(b)(1) of 
such Act (42 U.S.C. 1395ww–114(b)(1)) is amended by 
striking ‘‘the amount specified in paragraph (3)’’ and in-
serting ‘‘the greater of the amount specified in paragraph 
(3) or the monthly premium amount specified in section 
1860D–11A(d)(1)’’. 
(d) CONFORMING AMENDMENTS, INCLUDING ELIMI-
NATION
OF UNNECESSARY PLAN REQUIREMENT
AND 
FALLBACK PLAN PROVISIONS.— 
(1) Section 1860D–3 of such Act (42 U.S.C. 
1395w–103) is repealed. 
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(2) Section 1860D–11 of such Act (42 U.S.C. 
1395w–111) is amended— 
(A) by striking subsection (f), (g), and (h); 
and 
(B) in subsection (i), by inserting ‘‘except 
as provided in section 1860D–11A(b),’’ after 
‘‘in carrying out this part,’’. 
(3) Section 1860D–12(b) of such Act (42 
U.S.C. 1395w–112(b)) is amended by striking para-
graph (2). 
(4) Section 1860D–13(c) of such Act (42 
U.S.C. 1395w–113(c)) is amended by striking para-
graph (3). 
(5) Section 1860D–15 of such Act (42 U.S.C. 
1395w–115) is amended by striking subsection (g). 
(6) Section 1860D–16(b)(1) of such Act (42 
U.S.C. 1395w–116(b)(1)) is amended by striking 
subparagraph (B) and inserting the following: 
‘‘(B) payments for expenses incurred with 
respect to the operation of medicare operated 
prescription drug plans under section 1860D– 
11A.’’. 
(7) Section 1860D–41(a) of such Act (42 
U.S.C. 1395ww–141(a)) is amended by striking 
paragraph (5) and inserting the following: 
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‘‘(5) 
MEDICARE
OPERATED
PRESCRIPTION 
DRUG PLAN.—The term ‘medicare operated prescrip-
tion drug plan’ has the meaning given such term in 
section 1860D–11A(c).’’. 
(8) Section 1860D–42(a) of such Act (42 
U.S.C. 1395w–142(a)) is amended by striking ‘‘, in-
cluding section 1860D–3(a)(1),’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall take effect as if included in the enact-
ment of section 101 of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 (Public Law 
108–173; 117 Stat. 2071). 
TITLE II—MEDICAID AND LOW- 
INCOME IMPROVEMENTS 
SEC. 201. CHANGE IN BASE USED IN COMPUTING STATE 
CLAWBACK PROVISION. 
(a) IN GENERAL.—Section 1935(c) of the Social Se-
curity Act (42 U.S.C. 1936u–5(c)) is amended— 
(1) in paragraph (2)(A)(ii), by inserting ‘‘, sub-
ject to paragraph (7),’’ after ‘‘increased for each 
year (’’; 
(2) in paragraph (3), by inserting ‘‘Subject to 
paragraph (7)—’’ after ‘‘DUAL ELIGIBLE INDIVID-
UALS.—’’ in the matter before subparagraph (A); 
and 
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(3) by adding at the end the following new 
paragraph: 
‘‘(7) USE OF 2005 AS BASE.—This subsection 
shall be applied by substituting ‘2005’ for ‘2003’ 
each place it appears in paragraph (3) if such sub-
stitution results in a reduced amount under para-
graph (1)(A) of this subsection and, in the case of 
such substitution, the reference in paragraph 
(2)(A)(ii) to ‘2004’ is deemed a reference to 
‘2006.’ ’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to payments for calendar quar-
ters beginning on or after January 1, 2007. 
SEC. 202. ELIMINATION OF COST-SHARING FOR CERTAIN 
FULL-BENEFIT DUAL ELIGIBLES. 
(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.—’’ 
and the following: 
‘‘(I) INSTITUTIONALIZED
INDI-
VIDUALS.—In’’; and 
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(2) by adding at the end the following new sub-
clauses: 
‘‘(II) CERTAIN
OTHER
INDIVID-
UALS.—In the case of an individual 
who is a full-benefit dual eligible indi-
vidual and who receives services from 
a facility or program described in sub-
clause (III), the elimination of any 
beneficiary coinsurance 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)). 
‘‘(III) FACILITY
DESCRIBED.— 
For purposes of subclause (II), a fa-
cility or program described in this 
subclause is a custodial care facility or 
group home (as such terms are de-
fined by the Secretary) or any other 
facility or program that the Secretary 
determines provides services without 
which the individual would require 
long-term care in a medical or mental 
health institution or nursing facility.’’. 
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(b) EFFECTIVE DATE.— 
(1) IN GENERAL.—The amendments made by 
subsection (a) shall take effect as if included in the 
enactment of section 101 of the Medicare Prescrip-
tion Drug, Improvement, and Modernization Act of 
2003 (Public Law 108–173). 
(2) REIMBURSEMENT
OF
COST-SHARING
PAY-
MENTS.—The Secretary shall provide for reimburse-
ment of any beneficiary coinsurance described in sec-
tion 1860D–2(b)(2) of the Social Security Act (42 
U.S.C. 1395w–102(b)(2)) paid by or on behalf of an 
individual 
described 
in 
section 
1860D– 
14(a)(1)(D)(i)(II) of such Act, as added by sub-
section (a), during the period beginning on January 
1, 2006, and ending on the date of enactment of this 
Act. 
SEC. 203. ELIMINATION OF THE INDEXING ON THE PRICE- 
SHARING FOR DUAL-ELIGIBLES AND QUALI-
FYING LOW INCOME BENEFICIARIES. 
(a) IN GENERAL.—Section 1860D–14(a) of the So-
cial Security Act (42 U.S.C. 1395w–114(a)) is amended 
by striking paragraph (4). 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect on enactment and apply 
to cost-sharing incurred on or after January 1, 2007. 
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SEC. 204. EXPEDITING LOW-INCOME SUBSIDIES UNDER THE 
MEDICARE PRESCRIPTION DRUG PROGRAM. 
(a) IN GENERAL.—Section 1860D–14 of the Social 
Security Act (42 U.S.C. 1395w–114) is amended by add-
ing at the end the following new subsection: 
‘‘(e) EXPEDITED APPLICATION
AND ELIGIBILITY 
PROCESS.— 
‘‘(1) EXPEDITED PROCESS.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
provide for an expedited process under this sub-
section for the qualification for low-income as-
sistance under this section through a request by 
the Secretary to the Secretary of the Treasury 
as provided in subparagraphs (B) and (C) for 
information sufficient to identify whether the 
individual involved is likely eligible for subsidies 
under this section based on such information 
and the amount of premium and cost-sharing 
subsidies for which they would qualify based on 
such information. Such process shall be con-
ducted in cooperation with the Commissioner of 
Social Security. 
‘‘(B) OPT IN FOR NEWLY ELIGIBLE INDI-
VIDUALS.—Not later than 60 days after the 
date of the enactment of this subsection, the 
Secretary shall ensure that, as part of the 
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