I
106TH CONGRESS
1ST SESSION
H. R. 2925
To amend the Public Health Service Act to finance the provision of outpatient
prescription drug coverage for low-income medicare beneficiaries and
to provide stop-loss protection for outpatient prescription drug expenses
under qualified medicare prescription drug coverage.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 23, 1999
Mr. BILIRAKIS (for himself, Mr. PETERSON of Minnesota, and Mr. FLETCH-
ER) introduced the following bill; which was referred to the Committee
on Commerce, and in addition to the Committee on Ways and Means,
for a period to be subsequently determined by the Speaker, in each case
for consideration of such provisions as fall within the jurisdiction of the
committee concerned
A BILL
To amend the Public Health Service Act to finance the
provision of outpatient prescription drug coverage for
low-income medicare beneficiaries and to provide stop-
loss protection for outpatient prescription drug expenses
under qualified medicare prescription drug coverage.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Medicare Beneficiary Prescription Drug Assistance and
Stop-Loss Protection Act of 1999’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Promoting prescription drug coverage for medicare beneficiaries.
‘‘TITLE XXVIII—PROMOTING PRESCRIPTION DRUG COVERAGE
FOR MEDICARE BENEFICIARIES
‘‘PART A—PRESCRIPTION DRUG COVERAGE ASSISTANCE FOR LOW-INCOME
MEDICARE BENEFICIARIES
‘‘Sec. 2801. Purpose; methods of providing assistance.
‘‘Sec. 2802. Beneficiary eligibility.
‘‘Sec. 2803. Coverage requirements for prescription drug coverage.
‘‘Sec. 2804. Payments to States.
‘‘Sec. 2805. State plan, data collection, records, audits, and reports.
‘‘Sec. 2806. Definition of prescription drug assistance and other terms.
‘‘PART B—MEDICARE OUTPATIENT PRESCRIPTION DRUG STOP-LOSS
PROTECTION
‘‘Sec. 2811. Medicare outpatient prescription drug stop-loss protection.
‘‘PART C—ACCESS TO PRESCRIPTION DRUG COVERAGE UNDER MEDIGAP
POLICIES
‘‘Sec. 2821. Permitting medicare beneficiaries to adjust medigap coverage.
SEC. 2. PROMOTING PRESCRIPTION DRUG COVERAGE FOR
MEDICARE BENEFICIARIES.
The Public Health Service Act is amended by adding
at the end the following new title:
‘‘TITLE 
XXVIII—PROMOTING 
PRESCRIPTION
DRUG COVERAGE FOR MEDICARE BENE-
FICIARIES
‘‘PART A—PRESCRIPTION DRUG COVERAGE ASSISTANCE
FOR LOW-INCOME MEDICARE BENEFICIARIES
‘‘SEC. 2801. PURPOSE; METHODS OF PROVIDING ASSIST-
ANCE.
‘‘(a) IN GENERAL.—The purpose of this part is to
provide funds to States to enable them, at their option,
to establish programs, separate from their medicaid plans,
that provide assistance to low-income medicare bene-
ficiaries in obtaining qualified prescription drug coverage
using the following methods in a manner consistent with
the provisions of this part:
‘‘(1) PREMIUM SUBSIDY FOR INDIVIDUALS OB-
TAINING COVERAGE THROUGH ENROLLMENT IN A
MEDICARE+CHOICE
PLAN
OR
A
GROUP
HEALTH
PLAN.—In the case of a low-income medicare bene-
ficiary enrolled in Medicare+Choice plan or a group
health plan that provides qualified prescription drug
coverage, payment of the portion of the beneficiary
premium (if any) of such plan that is attributable to
the cost of furnishing such coverage to such bene-
ficiary.
‘‘(2) OTHER METHODS.—Any other method for
the provision of, or payment for, qualified prescrip-
tion drug coverage that meets the requirements of
this part and that is separate from its medicaid
plan.
The Secretary shall provide guidance to States in estab-
lishing reasonable procedures to determine the portion of
the premium described in paragraph (1).
‘‘(b) 
REQUIRING
PROVISION
OF
ASSISTANCE
THROUGH
MEDICARE+CHOICE
PLANS
OR
GROUP
HEALTH PLANS IN CASE OF INDIVIDUALS ENROLLED IN
SUCH PLANS.—If a low-income medicare beneficiary is en-
rolled in a Medicare+Choice plan or in a group health
plan that provides qualified prescription drug coverage—
‘‘(1) a State drug assistance program shall pro-
vide for assistance under this part to be provided in
the form of a premium subsidy described in sub-
section (a)(1); and
‘‘(2) the beneficiary is deemed to have assigned
the right to such subsidy to the organization or
sponsor offering such plan.
Nothing in this part shall be construed as providing for
any premium subsidy described in subsection (a)(1) to the
extent such subsidy exceeds the amount of the beneficiary
premium applicable to qualified prescription drug cov-
erage.
‘‘(c) STATE ENTITLEMENT.—This part constitutes
budget authority in advance of appropriations Acts and
represents the obligation of the Federal Government to
provide for the payment to States of amounts provided
under section 2804.
‘‘SEC. 2802. BENEFICIARY ELIGIBILITY.
‘‘(a) IN GENERAL.—In order for a State to receive
payments under section 2804 with respect to a State drug
assistance program, the program must provide prescrip-
tion drug assistance to each individual residing in the
State who applies for such assistance and establishes that
the individual is a low-income medicare beneficiary (as de-
fined in subsection (b)). In applying the previous sentence,
residency rules similar to the residency rules applicable
under medicaid plans shall apply.
‘‘(b) LOW-INCOME MEDICARE BENEFICIARY DE-
FINED.—
‘‘(1) IN GENERAL.—For purposes of this part
with respect to a State drug assistance program, the
term ‘low-income medicare beneficiary’ means an in-
dividual who—
‘‘(A) is entitled to benefits under part A of
title XVIII of the Social Security Act or en-
rolled under part B of such title, or both, in-
cluding 
an 
individual 
enrolled 
in 
a
Medicare+Choice plan under part C of such
title;
‘‘(B) is not entitled to medical assistance
with respect to prescribed drugs under a med-
icaid plan;
‘‘(C) is determined by the State under the
program to have family income (as determined
under section 2806(6)) which does not exceed a
percentage of the applicable poverty line (as de-
fined in section 673(2) of the Community Serv-
ices Block Grant Act, including any revision re-
quired by such section), for a family of the size
involved, specified by the State, which percent-
age may not be less 120 percent nor more than
200 percent; and
‘‘(D) at the option of the State, is deter-
mined by the State under the program to have
resources (as determined under section 1613 of
the Social Security Act for purposes of the sup-
plemental security income program) that do not
exceed a level specified under the program,
which level shall not be less than the level used
by the State under section 1905(p)(1)(C) of
such Act.
‘‘(2) EXCLUSION.—Such term does not include
an individual who is—
‘‘(A) an inmate of a public institution or a
patient in an institution for mental diseases; or
‘‘(B) a member of a family that is eligible
for health benefits coverage under a State
health benefits plan on the basis of a family
member’s employment with a public agency in
the State if such coverage includes outpatient
prescription drug coverage.
‘‘SEC. 2803. COVERAGE REQUIREMENTS FOR PRESCRIP-
TION DRUG COVERAGE.
‘‘(a) QUALIFIED PRESCRIPTION DRUG COVERAGE
DEFINED.—For purposes of this part, the term ‘qualified
prescription drug coverage’ means prescription drug cov-
erage that—
‘‘(1) provides for a scope and quality of cov-
erage that is not less than the scope and quality of
coverage described in subsection (b);
‘‘(2) imposes any cost-sharing (including enroll-
ment fees, premiums, deductibles, copayments, coin-
surance, and similar costs) only consistent with sub-
section (c); and
‘‘(3) meets the requirements of subsection (d)
(relating to miscellaneous provisions).
‘‘(b) MINIMUM SCOPE AND QUALITY OF COVERAGE
REQUIRED.—
‘‘(1) IN GENERAL.—The scope and quality of
coverage described in this subsection is the scope
and quality of coverage for outpatient prescription
drugs and biologicals equivalent to any of the fol-
lowing:
‘‘(A) MEDICAID COVERAGE.—Coverage of
outpatient prescribed drugs under the State
medicaid plan.
‘‘(B) COMPREHENSIVE BENCHMARK COV-
ERAGE.—Comprehensive outpatient prescription
drug coverage if included in a benchmark ben-
efit package described in paragraph (2).
‘‘(C) 
OTHER
COMPREHENSIVE
COV-
ERAGE.—Outpatient prescription drug coverage
that the Secretary determines, upon application
by a State, provides comprehensive outpatient
prescription drug coverage, which may be such
coverage typically available in large group
health plans or in the large group market (as
such term is defined in section 2791(e)(3)).
Nothing in subparagraph (C) shall be construed as
authorizing the Secretary to require any particular
type of formulary or pricing structure.
‘‘(2) BENCHMARK
BENEFIT
PACKAGES.—The
benchmark benefit packages are as follows:
‘‘(A) FEHBP-EQUIVALENT
HEALTH
IN-
SURANCE
COVERAGE.—The 
standard 
Blue
Cross/Blue Shield preferred provider option
service benefit plan, described in and offered
under section 8903(1) of title 5, United States
Code.
‘‘(B) STATE
EMPLOYEE
COVERAGE.—A
health benefits coverage plan that is offered and
generally available to State employees in the
State involved.
‘‘(C) 
COVERAGE
OFFERED
THROUGH
HMO.—The health insurance coverage plan
that—
‘‘(i) is offered by a health mainte-
nance organization (as defined in section
2791(b)(3)), and
‘‘(ii) has the largest insured commer-
cial, non-medicaid enrollment of covered
lives of such coverage plans offered by
such a health maintenance organization in
the State involved.
‘‘(3) SCOPE AND QUALITY OF COVERAGE DE-
FINED.—In this subsection, the term ‘scope and
quality of coverage’ means the extent of prescription
drugs covered (including any exclusions or limita-
tions and the application of any formulary, including
exceptions to the application of such a formulary)
and provisions that assure access to, and the quality
of, covered prescription drugs, but not including
terms and conditions relating to cost-sharing or
other matters described in subsection (c) or (d).
‘‘(4) CONSTRUCTION.—Nothing in this sub-
section shall be construed as requiring qualified pre-
scription drug coverage—
‘‘(A) to provide for the same cost-sharing
as that provided under the State medicaid plan
or under a benchmark benefit package, respec-
tively; or
‘‘(B) to provide coverage for items or serv-
ices for which payment is prohibited under this
part, notwithstanding that any benchmark ben-
efit or other package includes coverage for such
an item or service.
‘‘(c) LIMITATIONS ON COST-SHARING.—
‘‘(1) NO PREMIUM AND NO DEDUCTIBLE.—
‘‘(A) IN GENERAL.—There shall be no pre-
mium or enrollment fee and no deductible im-
posed under the program.
‘‘(B) CONSTRUCTION.—Nothing in sub-
paragraph (A) shall be construed as preventing
the imposition of a premium, enrollment fee, or
similar charge or the application of a deductible
for coverage of benefits other than outpatient
prescription drugs under a Medicare+Choice
plan or group health plan to the extent other-
wise permitted under law.
‘‘(2) LIMITATIONS ON COPAYMENTS AND COIN-
SURANCE.—
‘‘(A) NO COPAYMENTS AND COINSURANCE
FOR LOWEST INCOME BENEFICIARIES.—There
shall be no copayments or coinsurance in the
case of a low-income medicare beneficiary whose
family income does not exceed 120 percent of
the applicable poverty line described in section
2802(b)(1)(C).
‘‘(B) OTHER BENEFICIARIES.—
‘‘(i) IN GENERAL.—In the case of a
low-income medicare beneficiary whose
family income exceeds 120 percent of such
poverty line, any cost-sharing in the form
of a copayment or coinsurance imposed
with respect to coverage under the pro-
gram does not exceed—
‘‘(I) a copayment of $5 per pre-
scription unit (such a unit being de-
termined consistent with reasonable
rules established under the program
that reflect common industry prac-
tice), or
‘‘(II) coinsurance of 20 percent,
whichever is greater. Any such cost-sharing
may not exceed, in the aggregate in any
year, $1,500 with respect to a low-income
medicare beneficiary.
‘‘(ii) SLIDING SCALE PERMITTED.—In
the case of such beneficiaries, a program
may vary the cost-sharing based on family
income, but only in a manner, consistent
with clause (i), so that the cost sharing in-
creases as family income increases.
‘‘(iii) PUBLICATION.—Any cost-shar-
ing imposed under this subparagraph shall
be imposed pursuant to a public schedule.