I 
109TH CONGRESS 
1ST SESSION 
H. R. 152 
To amend part D of title XVIII of the Social Security Act to improve 
the coordination of prescription drug coverage provided under retiree 
plans and State pharmaceutical assistance programs with the prescription 
drug benefit provided under the Medicare Program, and for other pur-
poses. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 4, 2005 
Mr. MENENDEZ introduced the following bill; which was referred to the Com-
mittee on Energy and 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 part D of title XVIII of the Social Security 
Act to improve the coordination of prescription drug 
coverage provided under retiree plans and State pharma-
ceutical assistance programs with the prescription drug 
benefit provided under the Medicare Program, and for 
other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Preserving Access to 
Affordable Drugs Act of 2005’’. 
SEC. 2. ELIMINATION OF DISCRIMINATORY TREATMENT OF 
EMPLOYER PLANS. 
(a) ELIMINATION OF TRUE OUT-OF-POCKET LIMI-
TATION.—Section 1860D–2(b)(4)(C) of the Social Secu-
rity Act (42 U.S.C. 1395w–102(b)(4)(C)) is amended to 
read as follows: 
‘‘(C) APPLICATION.—In applying subpara-
graph (A), incurred costs shall only include 
costs incurred with respect to covered part D 
drugs for the annual deductible described in 
paragraph (1), for cost-sharing described in 
paragraph (2), and for amounts for which bene-
fits are not provided because of the application 
of the initial coverage limit described in para-
graph (3).’’. 
(b) EQUALIZATION OF SUBSIDIES.—Notwithstanding 
any other provision of law, the Secretary of Health and 
Human Services shall provide for such increase in the spe-
cial subsidy payment amounts under section 1860D– 
22(a)(3) of the Social Security Act (42 U.S.C. 1395w– 
132(a)(3)) as may be appropriate to provide for payments 
in the aggregate equivalent to the payments that would 
have been made under section 1860D–15 of such Act if
the individuals were not enrolled in a qualified retiree pre-
scription drug plan. In making such computation, the Sec-
retary shall not take into account the application of the 
amendments made by section 1202 of the Medicare Pre-
scription Drug, Improvement, and Modernization Act of 
2003 (Public Law 108–173; 117 Stat. 2480). 
SEC. 3. DIRECT SUBSIDY FOR CERTAIN STATE PHARMA-
CEUTICAL ASSISTANCE PROGRAMS. 
Part D of title XVIII of the Social Security Act (42 
U.S.C. 1395w–101 et seq.) is amended by inserting after 
section 1860D–23 the following new section: 
‘‘DIRECT SUBSIDIES FOR CERTAIN STATE 
PHARMACEUTICAL ASSISTANCE PROGRAMS 
‘‘SEC. 1860D–23A. (a) DIRECT SUBSIDY.— 
‘‘(1) IN GENERAL.—The Secretary shall provide 
for the payment to a State offering a State pharma-
ceutical assistance program described in section 
1860D–23(b)(1) for each individual who is eligible 
for, but not enrolled in, a prescription drug plan or 
MA–PD plan under this part, and who is enrolled in 
such program for each month for which such indi-
vidual is so enrolled. 
‘‘(2) AMOUNT OF PAYMENT.— The amount of 
the payment under paragraph (1) shall be an 
amount equal to the special subsidy payment 
amount determined under section 1860D–22(a)(3)
for a qualifying covered retiree for a coverage year 
enrolled with the sponsor of a qualified retiree pre-
scription drug plan. 
‘‘(b) ADDITIONAL SUBSIDY.— 
‘‘(1) IN GENERAL.—The Secretary shall provide 
for the payment to a State offering a State pharma-
ceutical assistance program described in section 
1860D–23(b)(1) for each applicable low-income indi-
vidual enrolled in the program for each month for 
which such individual is so enrolled. 
‘‘(2) AMOUNT OF PAYMENT.— 
‘‘(A) IN
GENERAL.—The amount of the 
payment under paragraph (1) shall be the 
amount the Secretary estimates would have 
been made to a prescription drug plan or MA– 
PD plan under section 1860D–14 with respect 
to the applicable low-income individual if such 
individual was enrolled in such a plan. 
‘‘(B) MAXIMUM
PAYMENTS.—In no case 
may the amount of the payment determined 
under subparagraph (A) with respect to an ap-
plicable low-income individual exceed, as esti-
mated by the Secretary, the average amount 
paid in a year under section 1860D–14 on be-
half of a subsidy eligible individual (as defined
in section 1860D–14(a)(3)(A)) with income 
that is the same as the income of the applicable 
low-income individual. 
‘‘(3) APPLICABLE LOW-INCOME INDIVIDUAL.— 
For purposes of this subsection, the term ‘applicable 
low-income individual’ means an individual who— 
‘‘(A) is eligible for, but not enrolled in, a 
prescription drug plan or MA–PD plan under 
this part, and who is enrolled in a State phar-
maceutical assistance program described in sec-
tion 1860D–23(b)(1); and 
‘‘(B) would be a subsidy eligible individual 
(as defined in section 1860D–14(a)(3)(A)) if 
the individual were enrolled in such a plan. 
‘‘(c) PAYMENT METHODS.— 
‘‘(1) IN GENERAL.—Payments under this sec-
tion shall be based on such a method as the Sec-
retary determines. The Secretary may establish a 
payment method by which interim payments of 
amounts under this section are made during a year 
based on the Secretary’s best estimate of amounts 
that will be payable after obtaining all of the infor-
mation.
‘‘(2) SOURCE OF PAYMENTS.—Payments under 
this section shall be made from the Medicare Pre-
scription Drug Account. 
‘‘(d) CONSTRUCTION.—Nothing in this section, sec-
tion 1860D–23, or section 1860D–24 shall be construed 
as requiring a prescription drug plan or MA–PD plan to 
coordinate coverage provided under such plan with cov-
erage provided under a State pharmaceutical assistance 
program described in section 1860D–23(b)(1) that is op-
erated by a State which receives a payment under this sec-
tion.’’. 
SEC. 4. FACILITATION OF COORDINATION. 
Section 1860D–24(c)(1) of the Social Security Act 
(42 U.S.C. 1395w–134(c)(1)) is amended by striking ‘‘all 
methods of operation’’ and inserting ‘‘its own methods of 
operation, except that a PDP sponsor or MA organization 
may not require a State Pharmaceutical Assistance Pro-
gram or an RX plan described in subsection (b) to apply 
such tools when coordinating benefits’’. 
SEC. 5. ALLOWING MEDICAID WRAP. 
Section 1935 of the Social Security Act (42 U.S.C. 
1396u–5) is amended by striking subsection (d).
SEC. 6. REPEAL OF COMPARATIVE COST ADJUSTMENT 
PROGRAM. 
Subtitle E of title II of of the Medicare Prescription 
Drug, Improvement, and Modernization Act of 2003 (Pub-
lic Law 108–173) is repealed and any provisions of law 
amended by such subtitle are restored as if such subtitle 
had not been enacted. 
SEC. 7. PROVISION OF WRAP-AROUND PRESCRIPTION 
DRUG COVERAGE THROUGH MEDIGAP. 
Section 1882(v) of the Social Security Act (42 U.S.C. 
1395ss(v)) is amended as follows: 
(1) In paragraph (1)(A), by inserting ‘‘, other 
than such a policy that provides wrap-around pre-
scription drug coverage included within a range of 
such 
coverage 
approved 
under 
subparagraph 
(D)(ii),’’ after ‘‘paragraph (6)(A))’’. 
(2) Add at the end of paragraph (1) the fol-
lowing new subparagraph: 
‘‘(D) WRAP-AROUND PRESCRIPTION DRUG 
COVERAGE.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
any other provision of this subsection, a 
medigap Rx policy that provides wrap- 
around prescription drug coverage included 
within a range of such coverage approved
by the Secretary under clause (ii) may be 
offered to part D enrollees. 
‘‘(ii) 
DEVELOPMENT
OF
STAND-
ARDS.—The Secretary shall approve a 
range of wrap-around prescription drug 
coverage that may be offered under this 
subparagraph to part D enrollees.’’. 
SEC. 8. EFFECTIVE DATE. 
The amendments made by this Act, and the repeal 
made by section 6, shall take effect as if included in the 
enactment of the Medicare Prescription Drug, Improve-
ment, and Modernization Act of 2003 (Public Law 108– 
173). 
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