pendent contractor appeal or other appeal process 
that would be applicable to determinations by such 
a pharmacy contractor consistent with section 
1860D–5(c)(5).’’. 
(f) 
LIMITATION
ON
COST-SHARING.—Section 
1854(e) (42 U.S.C. 1395w–24(e)) is amended by adding 
at the end the following new paragraph: 
‘‘(5) LIMITATION
ON
COST-SHARING.—In no 
event may a MA organization include a requirement 
that an enrollee pay cost-sharing in excess of the 
cost-sharing otherwise permitted under part D.’’. 
SEC. 103. MEDIGAP REVISIONS. 
(a) REQUIRED COVERAGE OF COVERED OUTPATIENT 
PRESCRIPTION
DRUGS.—Section 
1882(p)(2)(B) 
(42 
U.S.C. 1395ss(p)(2)(B)) is amended by inserting before 
‘‘and’’ at the end the following: ‘‘including a requirement 
that an appropriate number of policies provide coverage 
of drugs which complements but does not duplicate the 
drug benefits that beneficiaries are otherwise eligible for 
benefits under part D of this title (with the Secretary and 
the National Association of Insurance Commissioners de-
termining the appropriate level of drug benefits that each 
benefit package must provide and ensuring that policies 
providing such coverage are affordable for beneficiaries;’’.
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect on January 1, 2006. 
(c) TRANSITION PROVISIONS.— 
(1) IN GENERAL.—If the Secretary of Health 
and Human Services identifies a State as requiring 
a change to its statutes or regulations to conform its 
regulatory program to the amendments made by this 
section, the State regulatory program shall not be 
considered to be out of compliance with the require-
ments of section 1882 of the Social Security Act due 
solely to failure to make such change until the date 
specified in paragraph (4). 
(2) NAIC STANDARDS.—If, within 9 months 
after the date of enactment of this Act, the National 
Association of Insurance Commissioners (in this 
subsection referred to as the ‘‘NAIC’’) modifies its 
NAIC Model Regulation relating to section 1882 of 
the Social Security Act (referred to in such section 
as the 1991 NAIC Model Regulation, as subse-
quently modified) to conform to the amendments 
made by this section, such revised regulation incor-
porating the modifications shall be considered to be 
the applicable NAIC model regulation (including the 
revised NAIC model regulation and the 1991 NAIC 
Model Regulation) for the purposes of such section.
(3) SECRETARY
STANDARDS.—If the NAIC 
does not make the modifications described in para-
graph (2) within the period specified in such para-
graph, the Secretary of Health and Human Services 
shall make the modifications described in such para-
graph and such revised regulation incorporating the 
modifications shall be considered to be the appro-
priate regulation for the purposes of such section. 
(4) DATE SPECIFIED.— 
(A) IN
GENERAL.—Subject to subpara-
graph (B), the date specified in this paragraph 
for a State is the earlier of— 
(i) the date the State changes its stat-
utes or regulations to conform its regu-
latory program to the changes made by 
this section; or 
(ii) 1 year after the date the NAIC or 
the Secretary first makes the modifications 
under paragraph (2) or (3), respectively. 
(B) ADDITIONAL LEGISLATIVE ACTION RE-
QUIRED.—In the case of a State which the Sec-
retary identifies as— 
(i) requiring State legislation (other 
than legislation appropriating funds) to
conform its regulatory program to the 
changes made in this section; but 
(ii) having a legislature which is not 
scheduled to meet in 2006 in a legislative 
session in which such legislation may be 
considered; 
the date specified in this paragraph is the first 
day of the first calendar quarter beginning after 
the close of the first legislative session of the 
State legislature that begins on or after Janu-
ary 1, 2006. For purposes of the previous sen-
tence, in the case of a State that has a 2-year 
legislative session, each year of such session 
shall be deemed to be a separate regular session 
of the State legislature. 
SEC. 104. ASSISTANCE FOR LOW INCOME BENEFICIARIES. 
(a) QMB COVERAGE
OF COST-SHARING.—Section 
1905(p)(3) (42 U.S.C. 1396d(p)(3)) is amended— 
(1) in subparagraph (A)— 
(A) by striking ‘‘and’’ at the end of clause 
(i), 
(B) by adding ‘‘and’’ at the end of clause 
(ii), and 
(C) by adding at the end the following new 
clause:
‘‘(iii) premiums under section 1860D–5(d).’’; 
and 
(2) in subparagraph (B), by inserting ‘‘(i)’’ 
after ‘‘(B)’’ and by adding at the end the following 
new clause: 
‘‘(ii) A reduction in coinsurance under sub-
paragraphs (B) and (C)(i) of section 1860D– 
5(c)(3) to the amounts specified in section 
1860D–5(e)(1).’’. 
(b) REDUCTION
IN COST SHARING
FOR BENE-
FICIARIES WITH INCOME BELOW 185 PERCENT OF THE 
POVERTY LEVEL.—Section 1902(a)(10)(E) (42 U.S.C. 
1396a(a)(10)(E)) is amended—— 
(1) by striking ‘‘and’’ at the end of clause (iii); 
(2) by adding ‘‘and’’ at the end of clause (iv); 
and 
(3) by adding at the end the following new 
clause: 
‘‘(v)(I) for making medical assistance 
available, subject to section 1905(p)(4), for a 
reduction in medicare cost-sharing described in 
section 1860D–5(e)(1) for individuals (other 
than qualified medicare beneficiaries) who are 
enrolled under part D of title XVIII and are de-
scribed in section 1905(p)(1)(B) or would be so